I Am A Resident Of Ca And I Worked In Ca And Have N
Q: If Box 16 of my W-2 indicates "CO" do I have to file a State Return in CO? I am a resident of CA, and I worked in CA, and have never resided in CO. Did my employer withhold state taxes for CO instead of CA for 2000? Background: My former employer, a consulting agency, was based in TN in 1998, CO in 1999 and 2000, but I worked in CA for all 3 years for that employer. For 1998 and 1999, the employer had the same State Employer ID, and Box 16 of my W-2 was "CA", and I filed State Returns (540A) in CA. In 2000, the employer issued me a W-2 with a different Federal Employer ID from 1998 and 1999, and Box 16 was "CO". The Employer State ID was different too, and so was the company name. I am not on speaking terms with that employer, and would prefer not to talk to them for legal reasons.
A: It sounds like the employer paid you through a different corporate entity in 2000, probably one that is not registered as an employer in California. The employing entity is based in Colorado and they treated you as a Colorado employee. The result is that they withheld CO tax, and not California tax, as they should have done. This puts you in a difficult position because you must file a California resident return reporting all of your income, regardless of source. But you have no withholding to offset your liability. As a result, you will owe tax to California and probably a penalty for underpayment of estimated taxes as well. The estimated tax penalty is essentially an interest charge and runs from the date the payment was due (quarterly) to the date it is paid; therefore, you could reduce the penalty somewhat by making an estimated tax payment to California as soon as possible. If you spent any time working for your employer in Colorado during 2000, a prorata portion of your earnings is subject to CO tax. Otherwise, you do not owe any tax to CO, but you will have to file a nonresident return to get the CO tax refunded. Unfortunately there is no way to transfer your CO withholding to CA. You just have to pay CA and wait for a refund from CO. Ideally you would file your CO nonresident return ASAP, so that the refund might arrive (with luck) before you have to file your CA return on April 15. Even if you extend your CA return, you have to pay the tax by April 15. If you have legal issues with this former employer, you may want to calculate the economic cost to you arising from this error on their part and add it to any other claims you may have against them. .