Withholding in more than one state

Special Note: Dear readers, Thanks for your patience last week. There were two problems with the blog. Due to a configuration issue, it was down for a few days. Also, I was unable to post due to a very remote cabin for a week-long vacation. Things will return to normal now will at least weekly posts on Wednesday.
———

Q. I worked in Arizona for the first quarter of this year. I moved to another state after point. How do I collect the Arizona withholding that was taken from my check during the time I worked there?

A. Normally, I would not answer a question as specific as this, but the underlying issue here is important and can be applied in most states. The general rule is that when you work in a state, you incur tax liability in that state. Certain states have agreements called reciprocity that allows out-of-state residents to have tax liability only in their resident state. However, not all states follow that thinking. Arizona is one of them. When you work in Arizona, you will have Arizona withholding. The state you live in when you ultimately file your tax return may give you credit for taxes paid to Arizona. Arizona is not likely to refund your money, but this is based on your actual tax liability and the income tax rates that apply to you.

The short answer is….you can’t get your money back until you file and tax return with Arizona to see how much you actually owe. At that point, you can request a refund. States don’t just send checks to individuals. They don’t operate like normal businesses that buy and sell and will refund your money if you overpaid. Any refunds for overpayment of state taxes will occur when you file a tax return with the state in question.

No Comments

No comments yet.

RSS feed for comments on this post. TrackBack URI

Leave a comment

You must be logged in to post a comment.