itonewbie
Level 15

Before you allocate state wages based on the YTD amounts on the paystub, you should examine the details of his year-end payslip also as compensation paid during residency in one state could have been earned and, therefore, sourced to other other state.  Performances bonus, stock options, and relocation payments are prime examples.

Where compensation was received during residency period in one state but accrued in part to the other state for services performed there, it must still be reported as compensation to the other state and credit would then be claimed, generally in the resident state, for taxes paid to the other state.

You should also ask your client to have the employer issue a W-2C to correct the state wages - SIT will remain as is though, so they'd expect to owe on the PA return, possibly subject to ES-tax penalty, and be out of pocket for a while until they receive the refund from MD.

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