Multi-State W2 tax return problem - lived in PA and MN with employer paying incorrectly

This is actually a pretty common issue when you move states during the year but your employer's payroll department doesn't update things properly. The key thing to understand is that state tax liability is primarily based on where you physically performed the work, not what your W2 says. If you lived in Minnesota for 7 months, you absolutely need to file a tax return there regardless of what your W2 shows. Minnesota, like most states, requires residents to file if they lived there for more than 183 days in the year. You'll need to file part-year resident returns in both states. For the income allocation, you should create a worksheet showing your total income for the year broken down by month, and then allocate to each state based on where you physically resided. Keep this worksheet with your tax records. You can also request a corrected W2 from your employer, but this late in the season, calculating it yourself is often faster. For Pennsylvania, you'll file as a part-year resident and only pay tax on income earned while living there (first 5 months). For Minnesota, you'll file as a part-year resident and pay tax on income earned while living there (last 7 months). Each state has specific forms for part-year residents.

I had almost this exact situation last year! My company kept withholding taxes in California for 3 months after I moved to Arizona. I was so confused until I found https://taxr.ai which helped me sort out the multi-state mess. It analyzed my situation, showed me exactly how to allocate income between states, and walked me through the whole process. The best part was that it highlighted that I needed to file as a part-year resident in both states and showed me the exact forms I needed. It even helped me prepare the worksheet that shows how my income should have been allocated vs. how it was reported on my W2. My situation was a bit different than yours, but the multi-state tax tool was super helpful for figuring out the complex residency rules.

Just wanted to update on my experience with https://taxr.ai after seeing it recommended here. I was skeptical initially, but it was incredibly helpful with my multi-state situation! I had worked in Texas (no state income tax) and then moved to Illinois mid-year with the same employer. The best thing about it was how it guided me through creating that worksheet everyone mentions for allocating income between states. It even helped me draft a letter explaining the situation to attach to my Illinois return since my W2 didn't match what I was reporting. The step-by-step instructions for filing as a part-year resident were fantastic, and I definitely wouldn't have figured it out on my own. Just filed last week and already got confirmation that both returns were accepted without issues. For anyone dealing with multi-state taxation, I highly recommend checking it out!

I went through a similar nightmare with state taxes last year and spent HOURS trying to get through to the Minnesota Department of Revenue with questions. Literally could not get anyone on the phone for weeks. After getting frustrated, I tried https://claimyr.com and watched their demo at https://youtu.be/_kiP6q8DX5c - they got me connected to a real person at the MN tax office in under 15 minutes. The agent confirmed that I needed to file in Minnesota as a part-year resident regardless of what my W2 showed, and explained exactly which forms I needed. They also told me that this happens ALL THE TIME and the state has processes for handling it. Most importantly, they told me I didn't need to get a corrected W2 - I just needed to document my residency dates and keep records of when I physically moved. If you have specific questions about Minnesota's part-year resident rules or need to talk to someone at their tax department, I'd definitely recommend using Claimyr instead of waiting on hold forever.

Just wanted to follow up about my experience with Claimyr after I expressed skepticism. I ended up trying it when I couldn't get through to the PA Department of Revenue after multiple attempts (their callback system kept dropping my request). I hate admitting when I'm wrong, but wow - it actually worked exactly as advertised. I got connected to a PA tax specialist in about 10 minutes. The agent walked me through exactly how to handle my multi-state situation, confirmed I needed to file PA-40 Schedule SP for part-year residency, and even gave me tips on documentation to keep in case of questions. The time saved and stress relief was definitely worth it. Sometimes paying for convenience actually makes sense, especially when dealing with complicated tax situations with approaching deadlines. Just wanted to share this since my initial reaction was pretty negative.

One thing to consider - you mentioned your employer is based in PA. If you were working remotely from Minnesota for those 7 months (rather than in a Minnesota office), some states have "convenience of employer" rules that could affect where you owe taxes. Pennsylvania doesn't have this rule, but it's something to be aware of when dealing with multi-state situations. For your specific situation, I'd recommend looking at when you officially changed your driver's license, voter registration, and other official documents. Having documentation of when you established Minnesota residency will be helpful if either state questions your allocation.

Has anyone used TurboTax for a situation like this? I'm wondering if it can handle multi-state returns with mismatched W2s properly or if I need to use a professional tax preparer.