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My company withholds state income taxes and I disagree. What can I do?
Posted on 10/2/14 at 3:07 pm
Posted on 10/2/14 at 3:07 pm
Long story short, I live and work in Houston, but work for a company that is HQ'd and registered in another state. I work out of a small satellite local office here in Houston, and visit the HQ maybe 20-25 days total throughout the year.
They currently withhold state income taxes for the state where the company is located, and claim its because "that's where I get direction from", and the fact that I'm on Corporate payroll (which I'm one of the few that are on Corporate payroll that does not work at HQ).
Any tax experts know if this is accurate? Any recourse I can do to get a refund on the taxes withheld and paid to the other state?
They currently withhold state income taxes for the state where the company is located, and claim its because "that's where I get direction from", and the fact that I'm on Corporate payroll (which I'm one of the few that are on Corporate payroll that does not work at HQ).
Any tax experts know if this is accurate? Any recourse I can do to get a refund on the taxes withheld and paid to the other state?
7
Posted on 10/2/14 at 3:10 pm to Htown Tiger
Trying for that Texas no payroll tax bump ehh
Posted on 10/2/14 at 3:12 pm to Htown Tiger
Are there others in the satelite office? Are they being withheld too? And what state are they withholding in?
Also, are they withholding on your full salary, or only on a portion of it?
Also, are they withholding on your full salary, or only on a portion of it?
This post was edited on 10/2/14 at 3:13 pm
Posted on 10/2/14 at 3:16 pm to LSUFanHouston
quote:
Are there others in the satelite office? Are they being withheld too? And what state are they withholding in?
There are no other Corporate people here. The rest work for the subsidiary that is located/registered here in Houston, in which there is no state income tax.
quote:
Also, are they withholding on your full salary, or only on a portion of it?
Full salary
Posted on 10/2/14 at 3:21 pm to Htown Tiger
N/M
This post was edited on 10/2/14 at 3:23 pm
Posted on 10/2/14 at 3:23 pm to Htown Tiger
We are based in La. but have several people who work for us that live and work in other states. We withhold taxes from the state in which they live if that state has income taxes. Sounds like your getting the shaft. Your not required to file income taxes in a state you don't live or work. It's not like your an NBA player or NFL player getting a 500,000 game check when you travel to your HQ.
This post was edited on 10/2/14 at 3:25 pm
Posted on 10/2/14 at 3:27 pm to lsufan1971
From my limited experience with working out of my home state, I always had taxes withheld. I filed state taxes for that state and always received a full refund as a non resident.
Granted I just worked summers out of state, but I did the same thing in SC twice and in CT.
Granted I just worked summers out of state, but I did the same thing in SC twice and in CT.
Posted on 10/2/14 at 3:35 pm to eng08
quote:
I filed state taxes for that state and always received a full refund as a non resident.
My next thought is to file a NR 1040. The only problem is, on the instruction sheet, it says that you have to provide a letter from your company saying you are not a resident and they withheld this in error. I don't know if they will do that.
Posted on 10/2/14 at 3:50 pm to Htown Tiger
That doesn't sound right as state income taxes are based on where you actually work, but I guess if they have you as a corporate employee they consider that working in the corporate office. My payroll tax knowledge is back in the nether regions of my brain though.
You can file a non-resident return for the state they're withholding the tax for and you should get most, if not all, of it back. You don't need any type of letter for that.
You can file a non-resident return for the state they're withholding the tax for and you should get most, if not all, of it back. You don't need any type of letter for that.
Posted on 10/2/14 at 4:09 pm to Htown Tiger
Why not just call the state dept of revenue and ask them?
Posted on 10/2/14 at 4:10 pm to Htown Tiger
At most, they should only withhold for the days that you are actually at the HQ.
You can get a refund for the taxes withheld by filing a nonresident return for the state that has the withheld taxes.
You can get a refund for the taxes withheld by filing a nonresident return for the state that has the withheld taxes.
Posted on 10/2/14 at 4:18 pm to Htown Tiger
quote:
My company withholds state income taxes and I disagree. What can I do?
Quit
Posted on 10/2/14 at 4:23 pm to lsufan_26
Posted on 10/2/14 at 4:35 pm to Htown Tiger
Ahh yes. So you are the only employee of the "company" (i.e. the corproate entity) that works in Texas.
If they classify you as a Texas employee, then they have to set up an account with the Texas Workforce Commission to pay unemployment tax on your wages. They also have to set adjustments on their payroll service to treat you differently than the other employees (especially if all the other corp people are in the same home office).
What you are dealing with, my friend, is a lazy arse HR department. I've seen it many times before. Normally, it's not a big deal, you just file taxes in the other state, and then you take a credit in your actual state. But you live in Texas, so the credit does you no good.
I'd take a look at the rules for working in the state where the corp HQ is. If you are spending some time there, my guess is you will have to pay some tax, based on a pro-rated salary for the number of days you are there. Then, you can get the rest back as a refund at the end of the year.
If they classify you as a Texas employee, then they have to set up an account with the Texas Workforce Commission to pay unemployment tax on your wages. They also have to set adjustments on their payroll service to treat you differently than the other employees (especially if all the other corp people are in the same home office).
What you are dealing with, my friend, is a lazy arse HR department. I've seen it many times before. Normally, it's not a big deal, you just file taxes in the other state, and then you take a credit in your actual state. But you live in Texas, so the credit does you no good.
I'd take a look at the rules for working in the state where the corp HQ is. If you are spending some time there, my guess is you will have to pay some tax, based on a pro-rated salary for the number of days you are there. Then, you can get the rest back as a refund at the end of the year.
Posted on 10/2/14 at 5:42 pm to LSUFanHouston
quote:
LSUFanHouston
Thanks, good stuff. I completely agree, it seems like the "easy way out."
Sure, I'm fine paying a prorated amount. Here's the problem though: to file a refund, you need a letter from your company stating that they withheld this amount in error. I just asked our tax guy if they would provide this and he said he cannot. He said this is the position they took for 2013. He stated they are re-evaluating this position for 2014, since it seems there are "more of me" out there, but for 2013 that's the position they took.
Is that even legal (assuming its incorrect)?
Posted on 10/2/14 at 5:51 pm to Htown Tiger
State income taxes should be withheld based on your state residency. Thus, since you are a resident of the state of Texas, no state or local income taxes should be withheld.
Posted on 10/2/14 at 6:04 pm to Htown Tiger
quote:
He stated they are re-evaluating this position for 2014, since it seems there are "more of me" out there, but for 2013 that's the position they took.
Tell him his "position" sounds like "bullshite". Ask him if the company would prefer to reimburse you for the taxes. LSUfanhouston nailed it, sounds like a lazy arse HR department.
This post was edited on 10/2/14 at 8:33 pm
Posted on 10/2/14 at 9:24 pm to Htown Tiger
Where did you read that you needed a letter? Do you mind telling us what state? Different states have different rules.
And are we talking about 2013 or 2014?
And are we talking about 2013 or 2014?
Posted on 10/2/14 at 10:01 pm to LSUFanHouston
It's for 2013. And Illinois.
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