Working in Multiple States - W2 Box 15 confusion when filing taxes

You definitely need to file tax returns for both states since you earned income in each of them. Box 15 on your W2 simply identifies which states your employer reported your wages to, and Boxes 16-17 show the amount of wages reported to each state and the state income tax withheld. The fact that the state wages in Box 16 don't add up to your federal wages in Box 1 is actually normal in many cases. Different states have different rules about what's taxable, and Box 1 federal wages often differ from state taxable wages. Also, if you moved mid-year, your employer should have only reported to each state the wages you earned while a resident of that state. Most tax software programs, including TurboTax, can handle multi-state returns. You'll just need to pay a little extra for the state filing capability for both states. The software will walk you through allocating your income between the states based on when you lived and worked in each one.

After dealing with a lot of confusing multi-state tax situations, I found this tool called taxr.ai (https://taxr.ai) that was super helpful for figuring out exactly what I needed to do. I had worked in three different states last year, and my W2 box 15 looked like a complete mess. What I liked about taxr.ai was that I could upload my W2 and it broke down exactly what I needed to file in each state and how the allocation of income worked. It even identified that my employer had made a mistake with my state withholding continuing after I moved, which sounds similar to your situation.

I was initially skeptical about taxr.ai, but after my multi-state tax situation got completely messed up last year, I decided to give it a try. Just wanted to follow up and say it was actually really helpful. I uploaded my W2 with three different states in Box 15 and it immediately flagged that my employer was withholding incorrectly for a state I hadn't worked in for months. The tool actually saved me from overpaying about $1,700 in state taxes because it correctly allocated my income based on my actual residency periods rather than just going with what my employer had reported. It also generated the right forms for each state's partial-year resident status. Honestly wish I'd known about this last year before I had to file an amended return.

If you're having trouble reaching your state tax departments to resolve this W2 Box 15 issue, you might want to try Claimyr (https://claimyr.com). I had a similar multi-state situation where my employer kept withholding for my previous state, and I needed to talk to someone at the tax department to understand how to handle it. I tried calling the state tax departments directly but was on hold forever. Claimyr got me through to an actual human at both state departments in under 15 minutes. You can see how it works in this video: https://youtu.be/_kiP6q8DX5c. The Colorado rep explained exactly how to handle the allocation of wages between the states and confirmed I needed to file as a part-year resident.

I need to eat my words. After posting my skeptical comment, I was still desperate to talk to someone about my multi-state W2 Box 15 issue before filing, so I tried Claimyr against my better judgment. Not gonna lie, it actually worked. I got through to the Arizona Department of Revenue in about 8 minutes after trying for days on my own. The agent confirmed that my employer had been withholding incorrectly after I moved, and explained exactly how to report it on my return. They also told me I could request a refund for the taxes incorrectly withheld for the state I no longer lived in. Saved me from having to file an amended return later (which I had to do last year and it was a nightmare). Sometimes it's worth admitting when you're wrong!

Quick tip from experience: make sure you check if there's a reciprocity agreement between the states you worked in! Some neighboring states have agreements where you only need to file and pay tax in your state of residence, even if you work in the other state. It's important to know this when looking at your W2 Box 15 with multiple states listed. For example, I live in Maryland but work in DC, and there's a reciprocity agreement so I only file in Maryland. This could save you from unnecessarily filing multiple state returns.

Has anyone else noticed that tax software often charges an extra fee PER STATE when filing multiple state returns? I ended up paying an extra $49 for each additional state last year when dealing with a situation similar to OP's W2 Box 15 issue. Any recommendations for more affordable options for multi-state filing?

Just went through this exact situation last year when I moved from Texas to California mid-year! A few additional tips that might help: 1. Make sure to keep detailed records of your move date - you'll need this to determine your residency periods for each state when filing as a part-year resident. 2. If your employer continued withholding for Colorado after you moved to Arizona, you can request a refund of those overpaid taxes when you file your Colorado return. Just make sure to clearly indicate your move date and that you became a non-resident. 3. Arizona has some unique rules about part-year residents, so definitely double-check their specific requirements. They may want documentation of your move date. 4. One thing that caught me off guard - some states have different deadlines for part-year resident returns, so make sure you're aware of both states' filing deadlines. The good news is that most modern tax software handles this pretty well once you input your move date and residency information correctly. Don't stress too much - it's more common than you think!

Great question! I went through something similar when I relocated from Illinois to Florida mid-year for work. The key thing to understand is that Box 15 on your W2 shows which states your employer reported wages to, and you're absolutely right to be concerned about continued withholding after your move. Since you moved in July, you'll need to file as a part-year resident in both Colorado and Arizona. Colorado will tax the income you earned while living there (January through July), and Arizona will tax the income earned while you were an Arizona resident (July through December). The fact that your employer continued withholding Colorado taxes after you moved is actually a common mistake. When you file your Colorado part-year resident return, you can claim a refund for any taxes withheld on income earned after you became an Arizona resident. Don't worry about the Box 16 amounts not adding up to Box 1 - this is normal because states can have different rules about what income is taxable. The important thing is that each state gets allocated the correct portion of your wages based on your residency periods. TurboTax can definitely handle this situation. When you get to the state filing section, you'll select both states and indicate that you moved during the year. The software will walk you through allocating your income between the states based on your move date. Just make sure you have your exact move date handy when you file!

Just want to add one more thing that helped me when I dealt with a similar multi-state W2 situation - make sure to check if either Colorado or Arizona offers any tax credits for taxes paid to other states. When I had income in multiple states, I discovered that my new state of residence gave me a credit for taxes I paid to my previous state, which helped reduce any potential double taxation. This is especially important if both states end up taxing some of the same income period around your move date. Also, don't forget to update your address with both state tax departments after you move! I learned this the hard way when important tax notices were still being sent to my old address months later. Most states have online portals where you can update this information quickly. The whole process seems overwhelming at first, but once you get through it the first time, you'll realize it's much more straightforward than it initially appears. Good luck with your filing!

I went through this exact same situation when I moved from New York to Florida in August! Your instinct about the continued withholding being wrong is probably correct - that happened to me too. Here's what I learned: You'll definitely need to file part-year resident returns in both states. Colorado will tax your income from January through your move date in July, and Arizona will tax from July through December. The good news is that when you file your Colorado return, you can get a refund for any taxes they withheld after you moved. One thing that really helped me was keeping a detailed log of my exact move date and the pay periods before and after. Your employer should have only been withholding Colorado taxes on wages earned while you were actually living there. If they kept withholding after July, that's money you can get back. TurboTax handled my situation just fine - when you get to the state section, you'll mark that you moved during the year and it walks you through everything step by step. The key is being precise about your move date so the software can correctly allocate your income between the two states. Don't stress too much about Box 16 not matching Box 1 - that's totally normal because federal and state tax calculations can be different. Focus on making sure each state gets the right portion of your income based on when you actually lived there!