state tax

[tejas5]

Hello,

please respond to my question about state tax. My employer is from newjersey(NJ) and has been deducting my state tax for NJ all the years. I work for a client in michigan(MI), and was requesting my employer to change the state tax to MI, as its getting complicated during filing of taxes. He was postponing giving some lame excuses. Could anyone of you tell if its that difficult to change the state tax to an other state? Can I complain somewhere my plight. Thanking you in anticipation.

[knowledgeable]

Your employer ...

... is doing the right thing. Since the employer's offices are in NJ and you're only on a temporary project in MI, the employer's accountant will definitely deduct your NJ state taxes.

You may want to talk to your CPA and see how you can legally get it worked out to your benefit.

There are certain sub-clauses that will affect you. These indicate that if you're on a project at a specific location for so much period, then it becomes a sort of permanent location and your taxes will be effective accordingly.

Good luck.

[txh1b]

You file the state tax for Michigan as a resident depending on the residency requirements of that state and claim Non resident status for NJ and get everything back from NJ.

[tejas5]

state tax

Thank you for your responses. As txh1b suggest I can go that route but I feel it might be an administrative overhead, and also I may have to keep waiting until NJ pays my taxes back, meanwhile they might comeup with some kind of questions which myself or my company shud be take care of. I want to avoid all these kind of difficulties and hence wanted to get the state changed.

Knowledgeable:
I had to pay few thousand dollars as fine and interest last year to the state of California, as my CPA did not advise the right thing to do.I didnot pay the state tax for CA though I wokred there for 6 months. I filed the tax only for the state of NJ, for the reason that my CPA suggested that I dont have to, as Iam paying for NJ. I argued with FTB the same, but they didnot buy it, eventually I had to pay them. So, even if your employer is in an other state than your client location, you have to pay for the state where you are residing.I got what you are trying to say, but just letting you know what I had to face coz of this.

[txh1b]

You just have to deal with the administrative overhead. Small companies do not want to get a tax id for every state they have an employee working in to reduce their administrative overhead and pass it on to their employee.

California has the rule for non-residents also to pay taxes based on number of days they spend in the state. It was not a good idea for you to not pay the tax in california as they have rules clearly stating how to calculate their state tax if you are a NR.