Here is my story further explained. I work in minnesota but live in Wisconsin. In 2007, I was paying MN state taxes from my paycheck and not WI. So, my tax accountant says I will get all of my MN taxes I paid back BUT I have to pay over $1000 in WI state taxes since I was living in WI and paying MN state taxes. Is there anything I can do now to not pay the WI tax this year? I already changed my W-2 to start deducting WI state tax for 2008 and not MN anymore since I live in WI still. Any advice? Do you understand what I am even saying? THANKS!!
Your accountant is correct.
I see a few of these each year. MN and WI have a reciprocity agreement. The basically means that you only have to pay taxes in the state you live; not the state you work in. Either you didn’t tell your employer that you were living in WI or they withheld incorrectly. Either way, you will get everything back from MN but have to pay WI. Taxes are a little higher in MN than WI so you should come out a little ahead.
I understand what you’re saying, but it doesn’t make a lotta sense. If you work in MN, then you will pay tax to MN. If you live in WI, then you also pay tax to WI. But, WI will give you a credit for taxes paid to MN.
Probably, MN rates are higher, so after the credit for WI taxes is applied, you still owe. That would explain the situation.
Based on what you say you did, at the end of 2008, you should be overpaid in WI and owe a bunch to MN.
If MN and WI have a reciprocity agreement, then my conclusions may need to be modified. My assumption is they do not.
Minnesota and Wisconsin have reciprocity, which means that the 2 states agree to let the employee only pay the state tax in which they live in. Your employer should have never taken out Minnesota tax. They should have taken out Wisconsin tax.
Cover your butt in 2008. Get on the internet and find Minnesota form MW-R. It’s a form that is completed by non-residents of Minnesota, but work in Minnesota. It states that you are exempt from Minnesota state taxes. Complete the form and give it to your employer.
Review your next paycheck….make sure the state withholding is for Wisconsin.
I work for a company in PA and they take taxes for the county that the company is registered in however; my company gives its employees that reside outside of the county a Wage Tax Refund Petition so that I can claim back those taxes. Check your states website in regards to their procedures.