W-2 for home state but I mostly worked in another state

Fiddlehead Member Newcomer

Hello, I'm new to this and I'm sorry if my wording is incorrect.

I only received one W-2 and the state listed is VT, which is my state of residence. The amount in box 17 was taken out for VT income tax. BUT I worked only two days in VT and the rest in NY. Do I file both a nonresident NY return and a resident VT return and figure out how much I made in each state? How will I ensure the income tax goes to the correct state?



  • Henry
    Henry FreeTaxUSA Agent

    Hi Fiddlehead, this is a great question. Taxes can definitely get more complicated when more than one state is involved.

    Here's how it works: Generally, the state where you lived (VT) will tax all of the income that you earned while living there. If you had income from a source within another state (NY), then that state will also tax that income. In that case, you would probably want to file a resident VT return and a nonresident NY return to report your income, and you will likely end up with some income that is getting taxed by both VT and NY. The good news is that in this situation you can usually claim a credit for taxes paid to another state on your resident return.

    To claim that credit, you will be asked to enter 1-the adjusted gross income from your NY return, 2-the amount of tax paid to NY, and 3-the amount of tax withheld as shown on your NY return.

    First, you'll want to prepare your nonresident NY return to make sure the credit is calculated correctly. When you get to the NY Summary screen, you should make note of the three amounts listed above. Then you can go back to your VT return and claim the credit for taxes paid to NY.

    When it comes to preparing your NY return, the software will prompt you to allocate your NY wages if you indicate that you worked at a job where you worked some days in NY and some days in a different state. That way you can account for those two days that you worked in VT for this employer.