Moved states halfway through year and sort of employers

Question

I'm confused about my tax situation this year. I started 2016 living and working in WA state. In May I moved to CO state but continued to be employed by my WA state employer. However, the employer also has an office in CO and I worked remotely in that office for the WA state group. My boss and person who signed my timesheets was in WA state through the end of 2016.

I did not have any CO state taxes taken out of my paycheck. When the year changed I became a member of the CO office officially and now there are CO taxes taken out of my pay check. (So it would seem my employer is handling this for me and correctly, maybe?)

Does it sound like I owe taxes for May through Dec to CO state? Is it possible to file as a non-resident in WA (even though WA has not income tax)?

Additionally, I am married and bought a house but made no mortgage payments in 2016.

Answer 1

When you moved to your new state (Colorado) you were essentially telling Colorado I want to be a resident of your state. You also performed work in that state.

Generally where you live and where you work are important to determining which states can tax your income. Sometimes if the the two states are neighbors they have an agreement to only tax you where you live (DC, MD, and VA do that, and others do also).

Of course in your case once you moved to CO, your work state and living state were the same.

You should have told payroll that you now wanted to submit a Colorado state version of a W-4.

So now you will have to file taxes for 2016 claiming that you were a part year resident of Colorado.