W2 shows incorrect state income allocation - Can this be fixed?
I need some advice on a state tax allocation problem with my W2. My employer has allocated roughly 90% of my income to State A (which has a higher tax rate) and only 10% to State B (with the lower tax rate). The problem is I actually split my time pretty evenly between both states last year - about 6 months in each. I know this mistake happened because I didn't notify HR about my address change until several months after I actually moved. When I calculated the difference, I'm looking at paying about $320 more in state taxes than I should. Is there any way to correct this allocation after the W2 has already been issued? Can I file my taxes with a different allocation than what's on my W2? Or am I just stuck paying the higher amount since the error was technically my fault?
24 comments


Kiara Fisherman
You're not stuck with the W2 allocation just because the error originated from your delayed address change notification. You have a few options to address this issue: First, you can request a corrected W2 (Form W-2c) from your employer. Contact your payroll department, explain the situation, and provide documentation of your actual residence timeline in each state. This is the cleanest solution if your employer is willing to help. If your employer won't issue a W2c, you can still file your state tax returns based on your actual time spent in each state rather than the W2 allocation. You'll need to include an explanation with your tax returns and potentially fill out a separate schedule showing the correct allocation between states. Be prepared to provide documentation supporting your physical presence in each state (rental agreements, utility bills, etc.). Also keep in mind that each state has its own rules for determining residency and income allocation. Some states use a "physical presence" test while others look at your "domicile" (primary home). Check both states' specific rules before proceeding.
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Liam Cortez
•Thanks for the info. If I file based on my actual time in each state rather than what's on the W2, will this trigger an audit? I'm worried about getting flagged since my filing wouldn't match what the employer reported.
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Kiara Fisherman
•Filing with amounts that differ from your W2 might increase the chance of questions from tax authorities, but it doesn't automatically trigger an audit. The key is having proper documentation to support your position. When filing with a different allocation than your W2 shows, include a clear explanation statement with your returns. Most state tax forms have a section for explaining discrepancies. Also, keep documentation that proves your physical presence in each state - lease agreements, utility bills, bank statements showing local transactions, and even receipts from regular activities in each location.
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Savannah Vin
Had a similar problem last year with incorrect state allocations on my W2. After getting nowhere with my company's overwhelmed HR department, I used taxr.ai (https://taxr.ai) and it was seriously helpful. They analyzed my situation, helped me understand exactly what documentation I needed to safely file with a different allocation than my W2 showed, and even gave me language to use in my explanation to the state tax authorities. Saved me about $400 in wrongly allocated state taxes!
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Mason Stone
•How exactly does taxr.ai work? Do they just give advice or do they actually help with the filing process? I'm dealing with a similar situation but between three different states and I'm totally lost.
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Makayla Shoemaker
•I'm a bit skeptical about these online tax services. Did you have any issues with your return after using their advice? Did either state come back with questions?
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Savannah Vin
•They don't file for you - they analyze your specific situation, review your documentation, and provide detailed guidance. You upload your tax documents and they give you specific advice tailored to your situation, including the exact forms you need and language to use when explaining discrepancies. It's more like having a tax pro review your unique situation rather than generic advice. No issues at all with my return. I followed their documentation recommendations exactly, included the explanation they suggested with my filing, and both states processed my returns without any questions. They were really clear about what proof I needed to keep on hand in case of questions later, but I haven't heard anything from either state tax department.
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Mason Stone
Just wanted to update - I tried taxr.ai for my three-state allocation mess and it was incredibly helpful! I was going to pay an accountant $600+ but decided to try this first. They reviewed all my documentation and created a customized allocation worksheet showing exactly how to properly split my income across the three states based on my actual work locations. They even identified a reciprocity agreement between two of my states that my employer had missed completely! Ended up saving nearly $700 in incorrectly allocated state taxes.
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Christian Bierman
If you've already tried getting a corrected W2 from your employer with no luck, consider using Claimyr (https://claimyr.com) to get through to your state tax department directly. I was in a similar situation last year and spent WEEKS trying to get through to my state's tax department for guidance. Claimyr got me connected to an actual human at the state tax office in about 20 minutes instead of the usual 2+ hour wait. They have a video showing how it works here: https://youtu.be/_kiP6q8DX5c. The state tax representative walked me through exactly how to file with the correct allocation despite my incorrect W2, and what documentation I needed to include.
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Emma Olsen
•How does this Claimyr thing actually work? I don't understand how they can get you through faster than just calling yourself. Sounds like they just charge you for something you could do yourself?
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Lucas Lindsey
•Yeah right. Nothing gets you through to government agencies faster. I've tried everything and still wait hours every time I call. This sounds like a scam to me.
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Christian Bierman
•Claimyr uses an automated system that continuously redials and navigates the IRS/state tax phone trees until it gets a human, then it calls you and connects you. You don't have to sit there listening to hold music for hours - they call you when they get a person. I was skeptical too, but after spending multiple days trying to get through on my own (and getting disconnected twice after 90+ minutes of waiting), I was desperate. It's not a scam - they don't ask for any personal tax info and you still talk directly with the actual tax agency representative yourself. The service just handles the frustrating waiting game for you.
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Lucas Lindsey
Hate to admit it but I was completely wrong about Claimyr. After my skeptical comment, I decided to try it since I was getting nowhere with my state tax department. Got connected to a real person at the state tax office in 17 minutes after trying unsuccessfully for days on my own. The agent confirmed I can file based on my actual residence time rather than the W2 allocation, but said I need to include their state's schedule for "allocation and apportionment" with specific documentation. Would never have known that without speaking to them directly. Sometimes being wrong is worth it if you learn something useful!
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Sophie Duck
Just an alternative approach - many states have a "nonresident credit" on their tax forms. If you file as a resident in State B (lower tax) and nonresident in State A (higher tax), you might be able to claim a credit on your State B return for taxes paid to State A. Not ideal since you're still paying the higher rate on that portion, but it might be easier than trying to get a corrected W2.
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Austin Leonard
•How do I know if my states offer this nonresident credit? Is this something all states do?
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Sophie Duck
•Not all states offer nonresident credits, and the rules vary significantly. Most states with income taxes do offer some form of credit to avoid double taxation, but the formulas and limitations differ. To find out, go to each state's tax department website and search for "credit for taxes paid to another state" or "nonresident credit." The credit is typically on a specific schedule or line of your resident state return. Some states have reciprocity agreements that make the process even easier, but those only apply to specific pairs of neighboring states.
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Anita George
Don't forget you'll need to track your days in each state carefully! I went through this last year and the state auditor wanted me to provide a day-by-day log of where I was physically located for work. Ended up having to go through my calendar, email timestamps, and even credit card statements to prove my whereabouts. Such a headache!
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Abigail Spencer
•Is a simple count of days enough or do they want to see actual proof for each day? My situation is even more complicated because I sometimes work remotely while traveling to a third state to visit family.
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Reina Salazar
•@Abigail Spencer For the day count, most states want to see reasonable documentation rather than proof for every single day. Your main work location, hotel receipts, flight itineraries, and rental agreements usually suffice for the bulk of your time. The remote work while visiting family in a third state can definitely complicate things! Generally, if you re'working remotely while temporarily visiting another state, that work is usually attributed to your primary work state rather than where you happened to be physically located. But this varies by state - some have convenience "of employer rules" that might treat it differently. I d'recommend documenting your travel dates and work patterns, then checking each state s'specific rules about temporary work locations. You might also want to consult with a tax professional since three-state situations can get really complex with all the different allocation rules.
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Fiona Gallagher
Another thing to consider - if you're filing with a different allocation than your W2 shows, make sure you understand how each state defines "resident" vs "non-resident" status. Some states use a simple day count (like 183 days), while others look at where your "domicile" is (permanent home, voter registration, driver's license, etc.). I had a friend who split time evenly between two states but was considered a resident of both because he maintained homes and voter registration in each! He ended up owing more than if he'd just been a resident of the higher-tax state. The rules can be really tricky, so definitely research both states' residency requirements before you file. You might find that your actual legal status is different from what you'd expect based on just time spent in each location.
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Vanessa Chang
•This is such an important point about residency definitions! I learned this the hard way when I moved mid-year between states. Even though I physically lived in State A for 8 months and State B for 4 months, State A still considered me a resident because I kept my driver's license and voter registration there initially. What made it even more confusing was that the two states had completely different rules - one used the 183-day test while the other focused on "intent to remain permanently." I ended up having to file as a part-year resident in both states and provide documentation showing my intent to establish domicile in the new state (lease agreement, utility transfers, DMV records, etc.). @Jason Brewer - definitely check both states residency' rules before you decide how to file. The physical presence test might not be the determining factor, and you want to make sure your filing approach aligns with how each state actually defines residency status.
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Evan Kalinowski
One more option to consider - if your employer won't issue a corrected W2 and you're worried about filing with different allocations, you could also try contacting the IRS directly about the W2 error. They have a process for handling incorrect W2s where you can file Form 4852 (Substitute for Form W-2) if your employer refuses to correct it. The IRS can actually contact your employer on your behalf to request the correction. This might carry more weight than your direct request, especially if your HR department has been unresponsive. You'd still need to provide documentation of your actual time in each state, but having the IRS involved might make your employer take the issue more seriously. Keep in mind this route can take longer to resolve, so if you're close to filing deadlines, the other approaches mentioned (filing with proper documentation and explanations) might be more practical. But it's worth knowing you have this option if the employer correction route isn't working out.
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Isabella Santos
•That's really helpful to know about Form 4852! I had no idea the IRS could actually contact employers on your behalf for W2 corrections. How long does that process typically take? I'm wondering if it's worth trying this route first before filing with my own allocation calculations, or if I should just go ahead and file with documentation since we're getting close to tax season. Also, does using Form 4852 create any red flags or complications for your return? I want to make sure I'm not making things more complicated than they need to be, especially since this whole situation started from my own delay in updating my address with HR.
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Jayden Reed
•@Isabella Santos The IRS employer contact process through Form 4852 typically takes 6-8 weeks, which might be too long if you re'trying to file soon. The IRS generally recommends trying to get the correction directly from your employer first, and only using Form 4852 if they refuse or don t'respond within a reasonable time. Using Form 4852 doesn t'necessarily create red flags, but it does signal to the IRS that there s'a discrepancy with your employer s'reporting. You ll'need to attach documentation supporting your position, similar to what you d'do if filing with your own allocation calculations. Given that we re'in tax season, I d'suggest trying one more direct approach with your employer maybe (escalating beyond HR to payroll or accounting while) simultaneously gathering your documentation for the self-filing approach. If your employer responds quickly, great. If not, you can proceed with filing based on your actual allocation with proper documentation - that s'probably faster and just as legitimate as waiting for the IRS process to play out. The key is having solid documentation either way, so start collecting those rental agreements, utility bills, and work records now regardless of which route you choose.
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