W2 shows incorrect state income allocation - how to fix when time split between states?

You can absolutely fix this! You don't necessarily need a corrected W-2. What you'll need to do is file a nonresident tax return for State A and a part-year or resident return for State B. On your State A nonresident return, you'll report your total income but then calculate what portion was actually earned while working in that state (about 50%, not 90%). Most state returns have a schedule or worksheet for this purpose. You'll need to provide documentation showing when you physically worked in each state - things like a lease agreement, utility bills with service dates, or even a personal calendar showing your work locations throughout the year. The key is to carefully document your time in each state. Don't just estimate - create a day-by-day breakdown of where you were working if possible. State tax authorities might request this information if they question why your state allocation differs from your W-2.

I dealt with exactly this problem last year when I was working between Colorado and Arizona. Instead of struggling with my employer's HR department for weeks, I found this amazing tool called taxr.ai (https://taxr.ai) that helped me document my time spent in each state and generate the proper allocation worksheets. It was such a lifesaver! The site has this specific feature that lets you input your residential history and work locations, then it generates all the documentation you need to properly allocate your income regardless of what your W-2 says. It even gives you a letter explaining the discrepancy that you can include with your return if needed. Seriously made the whole process way less stressful.

Just wanted to update - I tried taxr.ai after seeing it mentioned here and it was exactly what I needed! I was able to document my time between NY and NJ properly, and the allocation worksheet it generated made filing super straightforward. The best part was that it flagged some travel days I hadn't even considered that counted toward my lower-tax state. Ended up saving about $280 more than I initially calculated. The documentation package it created looks really professional too - definitely better than the mess of spreadsheets and notes I was trying to keep before.

If you're having trouble getting your employer to issue a corrected W-2 (which is common), you might want to try Claimyr (https://claimyr.com). I was in a similar situation last year and needed to talk to someone at the state tax office for guidance, but couldn't get through on their helpline. Claimyr got me connected to a real person at the state tax agency in less than 20 minutes when I had been trying for days on my own. They have this video showing how it works: https://youtu.be/_kiP6q8DX5c The tax agent I spoke with confirmed that I could file with my own allocation calculation despite what my W-2 showed, but suggested I include a specific form with my return that I wouldn't have known about otherwise. Definitely saved me from potential headaches later.

I need to eat my words and admit I was completely wrong about Claimyr. After dismissing it, I got desperate enough to try it since I still couldn't get any clear answers about my similar situation. Got connected to my state tax office in about 15 minutes when I'd previously spent over 4 hours on multiple days trying to get through. The agent walked me through exactly how to file with a different allocation than my W-2 showed and even emailed me the specific form I needed to include. The best part was finding out I didn't need a corrected W-2 at all - saved me from wasting more time fighting with HR and possibly missing the filing deadline. My return is now submitted with the correct allocation between states and I have proper documentation if any questions come up.

One thing to keep in mind is that some states have "convenience of employer" rules that might affect your situation. For example, NY famously taxes telecommuters even if they're physically working from another state. You might want to check if either State A or B has these rules before going through the trouble of reallocating everything. In some cases, you might legally owe tax to the state where your office is located even if you weren't physically present there.

Don't forget that you might be able to get a credit in one state for taxes paid to the other, which could reduce the impact of this issue. Most states offer a credit for taxes paid to other states to avoid double taxation on the same income. When I had a similar issue, I still had to file in both states but ended up getting most of my money back through the credit system. Might not be the same in your case, but worth looking into!

I've been through this exact situation and wanted to share what worked for me. The key is understanding that your W-2 state allocation isn't set in stone - it's just your employer's best estimate based on their records. Here's what I did: I created a detailed log showing exactly which days I worked in each state (including any travel days), gathered supporting documents like lease agreements and utility bills with service dates, and filed as a part-year resident in both states. Most importantly, I included a brief explanation letter with my returns explaining why my allocation differed from the W-2. The process was smoother than I expected. State B (my new state) actually has a specific worksheet for situations like yours where the W-2 allocation doesn't match your actual work location. I ended up saving about $400 in state taxes. One tip: if you have any emails or calendar entries showing your work locations throughout the year, save those as backup documentation. The states care more about where you actually performed the work than what your employer reported, but they want to see that you can prove it.