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Message
1
Posted on 10/3/14 at 7:35 am to LSUFanHouston
So I found Publication 130 for the state of Illinois, which defines when an employer should withhold state income taxes. You must meet one of the tests for "being paid in Illinois". I, however, do not meet any of them.
LSUFanHouston, I'm pretty sure you hit the nail on the head: they are not registered in Texas and thus cannot claim to have an employee there, else they will be liable for certain employer taxes here. So I get screwed as a result. I dont know what my next steps are (I certainly dont want to jeopardize my job by causing a stink), but this is entirely unfair.
LSUFanHouston, I'm pretty sure you hit the nail on the head: they are not registered in Texas and thus cannot claim to have an employee there, else they will be liable for certain employer taxes here. So I get screwed as a result. I dont know what my next steps are (I certainly dont want to jeopardize my job by causing a stink), but this is entirely unfair.
Posted on 10/3/14 at 10:04 am to Htown Tiger
HTown, do you have your 2013 W-2? In Box 15, is Illinois listed? And in Box 16, is it the same number as Box 1?
Posted on 10/3/14 at 11:55 am to PrettyLights
quote:
quote:Incorrect. Please expound on your position in relation to this topic.
You are just simply incorrect. I don't think he needs to explain.
But I will. You don't withhold based on your residence. It is where the work is performed.
Posted on 10/3/14 at 12:18 pm to LSUFanHouston
Yes, Illinois is listed and income amount in Box 16 is the same as Box 1. Basically, they are saying all of my income was earned in Illinois.
Posted on 10/3/14 at 12:58 pm to krehn11
Ok. So lets say a construction company is headquartered in Atlanta and it has ongoing construction projects in both Georgia and Alabama. Employees commute everyday from their home in Georgia to the construction site in Alabama.
Youre telling me that an employee that is a resident of Georgia should have Alabama state income taxes withheld while they are working on the project in Alabama even though they are a resident of Georgia and commute to work everyday?
Youre telling me that an employee that is a resident of Georgia should have Alabama state income taxes withheld while they are working on the project in Alabama even though they are a resident of Georgia and commute to work everyday?
This post was edited on 10/3/14 at 1:01 pm
Posted on 10/3/14 at 1:07 pm to Htown Tiger
It makes no sense. You are a TX resident working in TX. Your income was earned in TX, not IL, and it doesn't matter where they are incorporated. If you were a TX resident working for a TX registered company, working in IL, they would be correct to withhold IL tax. They are probably in violation of TX labor law and trying to cover their arse.
It probably varies on the nature of the work performed and the type of employee, construction may be an exception, but generally yes. I have spent a few weeks working in Kentucky every year, as a TX resident, and would have KY state and local tax withheld from my check for those weeks. I'd have to file non-resident state/local returns each year to get most, if not all, of that money back.
quote:
Youre telling me that an employee that is a resident of Georgia should have Alabama state income taxes withheld while they are working on the project in Alabama even though they are a resident of Georgia and commute to work everyday?
It probably varies on the nature of the work performed and the type of employee, construction may be an exception, but generally yes. I have spent a few weeks working in Kentucky every year, as a TX resident, and would have KY state and local tax withheld from my check for those weeks. I'd have to file non-resident state/local returns each year to get most, if not all, of that money back.
This post was edited on 10/3/14 at 1:11 pm
Posted on 10/3/14 at 1:27 pm to sneakytiger
quote:
I'd have to file non-resident state/local returns each year to get most, if not all, of that money back.
If you didnt live in Texas that state and local tax money would still be due to your home state, correct?
Posted on 10/3/14 at 1:47 pm to PrettyLights
quote:
So lets say a construction company is headquartered in Atlanta and it has ongoing construction projects in both Georgia and Alabama. Employees commute everyday from their home in Georgia to the construction site in Alabama. Youre telling me that an employee that is a resident of Georgia should have Alabama state income taxes withheld while they are working on the project in Alabama even though they are a resident of Georgia and commute to work everyday?
In this case, the individual would have Alabama wages and Alabama withholding. They would file an Alabama nonresident return. They would then claim those same wages on their Georgia return (where they are indeed resident) but they would take a credit - in the amount of the taxes paid to Alabama - against their Georgia return.
Posted on 10/3/14 at 1:48 pm to PrettyLights
Can't say, I've only worked in TX and there's no state tax here
Posted on 10/3/14 at 1:52 pm to Htown Tiger
This is water under the bridge at this point, but did you not notice IL tax being withheld from all of your paychecks in 2013?
IL is one of the worst states to deal with on NR issues, along with NY and CA. At least NY has a reasonable allocation method that you can use on your tax return. IL takes what your employer says as gospel, and only your employer can fix it.
At this point, man, I don't know what else to say. Your employer f'd this one up. You can certainly try to file an IL return and ask for a refund, but my guess is without the employer signing off on it, IL will deny the refund.
You said they were going to "revisit" the issue for 2014. I assume the TX subsidiary is indeed registered in TX. Could the company just put you, for payroll purposes, as an employee of the subsidiary? If the subsidiary has different fringe benefits, that might be an issue.
Based upon what you have said, though, I just don't see how you are an IL employee the entire year. 20-25 days, sure. Not the entire year.
IL is one of the worst states to deal with on NR issues, along with NY and CA. At least NY has a reasonable allocation method that you can use on your tax return. IL takes what your employer says as gospel, and only your employer can fix it.
At this point, man, I don't know what else to say. Your employer f'd this one up. You can certainly try to file an IL return and ask for a refund, but my guess is without the employer signing off on it, IL will deny the refund.
You said they were going to "revisit" the issue for 2014. I assume the TX subsidiary is indeed registered in TX. Could the company just put you, for payroll purposes, as an employee of the subsidiary? If the subsidiary has different fringe benefits, that might be an issue.
Based upon what you have said, though, I just don't see how you are an IL employee the entire year. 20-25 days, sure. Not the entire year.
Posted on 10/3/14 at 1:58 pm to PrettyLights
quote:
If you didnt live in Texas that state and local tax money would still be due to your home state, correct?
I have several clients that work out at Stennis in MS and live in Slidell. Their wages are taxed in Mississippi. They pay tax in Mississippi. But, due to state credits, they don't have to pay that amount of tax in LA on those same dollars (that's an overly simple view of it, but, it's usually true). Basically, MS is getting the money instead of LA.
I also have clients that live in the Orange/Beaumont TX area, and work in Lake Charles. Their wages are LA wages. They file a Louisiana non-resident tax return, and pay LA tax. They then get to take a credit for those taxes paid on their TX income tax return. However, TX doesn't have a personal income tax. So the Texas residents end up paying state income tax on those wages (to LA) even though they live in Texas. If they were to work in say Orange and live in Beaumont, there would be no state taxes at all.
What sucks is when you legitmately live in a non income tax state and work in an income tax state. In the OP's situation, it seems he also works in the non income tax state, but, his employer screwed up the payroll to make it look like he works in an income tax state (IL).
Posted on 10/3/14 at 3:52 pm to LSUFanHouston
I've actually seen companies issue multiple W2s based on different states.
You couldn't imagine the stuff people put on their LA Income Tax Return.
You couldn't imagine the stuff people put on their LA Income Tax Return.
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