Question

Which state do I pay taxes to? In 2023 I lived and physically worked in RI. My office was in HI. My work withheld HI state taxes. Should I get those back and pay RI, or?

Forum|Forum|1 year ago
August 14, 2024
3 replies
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My W-2 only has HI state taxes withheld on it.
I never set foot in Hawaii the whole year.

TurboTax Deluxe Online

All of your income earned is reported on your resident Rhode Island state tax return.

You will need to file an Hawaii nonresident state tax return. On the HI return you will enter 0 income and HI taxes withheld to get a HI state tax refund. You need to complete the HI nonresident return before completing the RI resident return so that you can get a credit for the HI state taxes withheld on the RI return.

You need to contact your employer to have them stop withholding HI income taxes from your wages. They should be withholding RI state taxes from your wages. If your employer cannot withhold RI state taxes then you will need to start paying RI estimated taxes on a quarterly basis going forward after the employer stops withholding HI taxes.

If you need to start RI estimated tax payments, go to this RI website for how to start - https://tax.ri.gov/online-services/make-payment-online

DoninGA

If you are using the TurboTax online editions for your tax returns, in the My Info section of the program you need to enter Rhode Island as your resident state. You will be asked if you earned money in any other state and you need to answer Yes and then select Hawaii as the other state.

rjs

Why do you say "My office was in HI"? Do you mean that your employer's headquarters is in Hawaii? That doesn't make it your office. You lived and worked in Rhode Island. It doesn't matter where your employer's headquarters is. You should pay only Rhode Island tax, and not Hawaii tax.

You will have to file a Hawaii nonresident tax return showing zero Hawaii income to get a refund of the Hawaii tax that was withheld. And you are going to have a big Rhode Island tax bill, including penalties and interest, because no Rhode Island tax was withheld. You cannot get credit on your Rhode Island tax return for the Hawaii tax that was withheld because the employer already paid it to Hawaii. Rhode Island has not gotten any tax from you. There is probably a place on the Rhode Island resident tax return for a credit for tax paid to another state. But after you file your Hawaii nonresident tax return for a refund, the net tax that you will have paid to Hawaii is zero.

Since your W-2 shows Hawaii income, you will probably get a letter from the Hawaii Department of Taxation saying that your Hawaii tax return is wrong and that you are not entitled to the full refund. You will have to convince them that the Hawaii withholding was a mistake, and that you did not work or live in Hawaii. A letter from your employer would be a big help.

Frankly, it would have been much better if you had noticed the Hawaii withholding on your first paycheck and questioned it immediately. Your employer could have easily corrected it and your W-2 would not show any Hawaii income. By waiting until after the end of the year, and after your W-2 was issued, you have a much bigger problem.

P

pjflyer-fallingwAuthor

I mean my office that I used to physically work out of is in Hawaii. All my coworkers are in Hawaii. I've been given approval to work remotely from RI. My employer has employees in all 50 states.

That's exactly how I filed my taxes. I put zero in for Hawaii income, and put all my income in the RI state tax return. Hawaii is now fighting me on it, and doesn't want to return the money that was withheld from my paycheck. (My inept HR lady told me she couldn't change my withholding.) I have a form from my employer that officially changed my home address and place of work to RI, but Hawaii says they can't take that. They want an amended W-2, but I don't understand what would be amended? It has my RI address on it, but in box 15 the only state that shows is RI. I don't know what to do next...?

rjs

@pjflyer-fallingw wrote:

in box 15 the only state that shows is RI.

Is that a typo? Did you mean that the only state that shows in box 15 is HI?

If your W-2 has RI in box 15, why do you say they withheld Hawaii tax? If box 15 is RI then the state wages in box 16 are Rhode Island wages and the state tax in box 17 is Rhode Island tax. Does your W-2 in TurboTax have RI in box 15? If the only state information on your W-2 is for RI you should not have had to file a Hawaii tax return at all. You should have told TurboTax that you did not make money in any other state.

If your W-2 has HI in box 15, what would be amended is to change the state wages in box 16 to zero for HI, and add another line of state information with RI in box 15, your total wages in box 16, and zero in box 17.

The HR lady is probably right that it's too late to change the withholding now for last year (2023). They already withheld the tax and sent it to Hawaii. As I said earlier, it would have been easy for them to correct it if you had pointed it out right away, or at least before the end of the year.