Tax situation involving multiple states

[LouisEly]

Wondering if there are any tax accountants or attorneys that can help. My position in MO was eliminated effective 6/1; 5/31 was my last day of work. I was living in MO at the time when I was working there, but moved out of MO on 6/3. My former employer didn't process my severance check until 7/15, and when I received it this week they took out full state withholding for both MO and WI - to the tune of a combined 12.1%. When I inquired they said they take out withholding for both states.

 

I understand that this is the case when you live in one state and work in another, but usually that situation is known and you file the appropriate forms with your employer to take out the right amounts; you are not fully taxed in both states. Also, there was no point in time that I was living in WI and working in MO.

 

I could understand if they split it, but it just doesn't seem right to take out full withholding for both states, especially when I have not been given the opportunity to file a W-2 for WI. And it shouldn't be up to my accountant to figure this out eight months from now (and get the correct amount eight months from now).

 

Anyone know what the law is in cases like these?

[CheezWizHed]

No help for your particular situation. But I live in WI and work in MN. My employer will only withhold MN taxes and makes me manage the WI side.

 

But I agree that they shouldn't have even touched WI taxes for this. Nice severance gift.

[Outlander]

It is an interest free loan to the state of Wisconsin now. You will get it all back pending what additional income you end up with in Wisconsin. Not sure why they did it that way though.

[BallFour]

Outlander is correct, if you get a job in Wisconsin maybe be very aggressive on your WI withholding when filling out your W-4 for this next 5 months as in claiming a lot of dependents depending on how hefty the severance was.

 

You will have to have a part year resident for both states anyway, so don't fret on getting double taxed or anything.

 

-Senior Level Account, 5 years of tax experience

 

PM me if you need anything, can always ask my shareholders.

[LouisEly]

Outlander is correct, if you get a job in Wisconsin maybe be very aggressive on your WI withholding when filling out your W-4 for this next 5 months as in claiming a lot of dependents depending on how hefty the severance was.

 

You will have to have a part year resident for both states anyway, so don't fret on getting double taxed or anything.

 

-Senior Level Account, 5 years of tax experience

 

PM me if you need anything, can always ask my shareholders.

The fun part is that my next job is very likely going to be in state #3.