Nonresident State Tax Return for Error Correction

[Anonymous]

Hi all - In October 2018 my wife and I moved from Illinois to Wisconsin and I began working from home. However, I stupidly forgot to update my addresses with work until early January. Because of this, while I was living in Wisconsin, there are four 2018 paychecks where I was getting taxed in Illinois but not in Wisconsin. This means I'll have to pay all those missed Wisconsin taxes on my tax return, about $1000 - not the end of the world, but I've heard about filing nonresident tax returns for taxes withheld in error, and wanted to see if I could do that here. If that's an option, how would I go about filling for those four pay periods where I was getting taxed in Illinois? As that amount would more or less balance out the lump sum I now owe Wisconsin.

[DaveInAZ]

Well, you shouldn't have to pay state income tax for the same income in two states. In Arizona you can get credit for taxes paid in other states, if WI allows that this would be the easier route to go, declare the income and claim credit for the IL tax paid on it. If not then the harder route to go would be to file for a refund in IL for the tax withheld there while you were a resident of WI, no doubt proof will be required, such as rent receipt, utility bills for your WI residence.

[Anonymous]

Cool, good to know. If we do have to take the latter option we'll be in good shape as we bought a house here, so we have a ton of documentation on when exactly we moved in, etc.

[Anonymous]

You'll owe what you owe regardless of what was withheld and for whom.

Each state return will ask you for the months that you were a resident of that state . . prepare them accordingly and you'll likely end up with a small refund from your old state that you will put towards the taxes owed in your new.

Also note the relationship the states have with each other as Dave mentioned here . . sometimes there are offsetting credits. 

[FlaDude]

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@Anonymous wrote:

You'll owe what you owe regardless of what was withheld and for whom. 

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Exactly. You can look at withholding as a mandatory, non interest bearing savings account. When you file your return, the actual tax due is determined, and you will either owe more money or get a refund depending on whether the withholding was less or more than the taxes due. Hopefully you will be due a refund from IL that will cover the WI tax.