Is this a mistake on my W2?

Submitted by _kkkkkttttt_ t3_11e9m89 in personalfinance

I live in DC and work in VA. I paid DC taxes all year. I got my W2 and in box 1 for wages and tips it says $70k, which is exactly what I was expecting and how much I made. But then in Box 15 for the states, both DC and VA are there and in box 16 for DC it says $70k, but then in VA it says $22k. I know for sure I only made $70k last year per my paystubs. Is this a mistake, or am I misunderstanding something?

Thanks for your help!

Edit: the helpful commenters below pointed out that dc has a reciprocity tax. Its odd my employer was withholding taxes for 2 states. But I think the big question remains: why would the sum of box 16 be greater than box 1 ?

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jimmyvluv4u t1_jad11wz wrote

DC-MD-VA all have reciprocity with each other. OP should be paying taxes based on where they live, not work. Employer should be withholding DC taxes, OP should have to file in DC only. Source - My wife and I live in VA, and have worked variously in DC, VA, and MD over the years.

More source (https://www.tax.virginia.gov/reciprocity) -
District of Columbia and Kentucky residents who:
Are taxed in their home states, commute to Virginia every day, and receive only wage or salary income in Virginia are exempt from taxation in Virginia.

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jimmyvluv4u t1_jad1pej wrote

That being said, I have no idea why your employer is withholding both DC and VA for you. Given that, you will have to file in both and claim your DC tax paid in VA to get your money back. I would get that fixed ASAP for future years.

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_kkkkkttttt_ OP t1_jad2asv wrote

yeah it’s kinda weird bc in 2021 I noticed they had me paying VA income taxes even though I lived in DC, it was a mistake that I flagged and got it fixed. Now all my paystubs for this entire year say I paid DC taxes, so I have no clue where the VA withholding came from. Maybe they never corrected the issue on their end last year? not even sure if that makes sense lol I really don’t know a lot about taxes

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_kkkkkttttt_ OP t1_jad6lk0 wrote

so, is my W2 saying I made $92k (70k in DC and 22k in VA)? because I know I for sure did not make that much via my paystubs

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jimmyvluv4u t1_jad6ur4 wrote

Yeah, sorry I don't know. You'll have to ask your employer what happened there. I've never had any of my various VA employers withhold anything other than VA for me, regardless of where I physically worked.

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jimmyvluv4u t1_jad2bm9 wrote

More from VA's tax site, if your employer withheld for you in both DC and VA:

Nonresidents:

If you are a resident of a reciprocity state, accept employment in Virginia, and meet the criteria for exemption, complete Form VA-4 to certify your exemption and give the form to your employer. You will need to re-certify your exemption every year.

If your employer withholds Virginia income tax and you find out that you are exempt, correct your withholding information with your employer for the future, and file Form 763-S to claim a refund.

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Werewolfdad t1_jacuq3m wrote

You’re misunderstanding something.

You lived in DC, so you’re income for DC will be your full income. You also worked in Virginia for part of the year (I’m assuming you’re mostly remote?) so you had some income in Virginia as well.

You’ll file taxes in virginia, then file taxes in DC where you’ll get a credit for the taxes paid to Virginia.

See the discussion on reciprocity

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jimmyvluv4u t1_jad1avj wrote

Wrong, DC-VA have reciprocity agreements, all tax should be withheld for DC and OP should (*normally) file in DC only. If your employer withheld for both you will have to file both and fix it up.

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Werewolfdad t1_jad1h10 wrote

I figured someone would chime in if that was the case for those specific locales.

Thanks!

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_kkkkkttttt_ OP t1_jacv4nw wrote

I worked in VA for the entire year, commuted there between 2 and 4 days a week. Not sure if that changes anything

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Werewolfdad t1_jacv9u9 wrote

> commuted there between 2 and 4 days a week.

So not the full year then?

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_kkkkkttttt_ OP t1_jacvm86 wrote

my bad, I meant working for a VA a company the whole year. I didn’t realize I was being taxed differently for working at home vs in the office

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Werewolfdad t1_jacwimu wrote

> I didn’t realize I was being taxed differently for working at home vs in the office

Yup. That’s the way it’s supposed to be done.

If DC has higher income taxes than VA, it doesn’t actually matter except you have to fill out two state tax returns. You just end up paying whichever has the highest rate

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lovemoonsaults t1_jacyn6y wrote

Yes. You pay taxes to the state you perform work in. You're also protected by the states' employment laws in which you perform work. Stuff to keep in mind as someone going between jurisdictions!

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SkyliteBlueSnake t1_jaduw1w wrote

Because of the tax reciprocity agreements between DC and VA it doesn't matter.

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_kkkkkttttt_ OP t1_jadv89j wrote

thanks. The question is still out there though as to why it’s saying I made $22k in VA income and $70k in DC income when it says my total income is $70k.

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nothlit t1_jad1ean wrote

I thought DC and VA have a reciprocity agreement so OP should only owe tax (and have tax withheld) where they live (DC) not where they work.

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_kkkkkttttt_ OP t1_jad67hm wrote

So knowing the reciprocity thing, is my W2 saying i made $92k instead of $70k?

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Werewolfdad t1_jad6cw0 wrote

I would direct that to /u/jimmyvluv4u as I've demonstrated I can't be trusted when it comes to state taxes in the DC/MD/DC area

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