Find W-2 Forms for Bigger State Refunds
Take a look at this IRS form W2.
Most of us know that this form is important when preparing and filing your tax return. Every year the information from this form is included within your tax return. But also, attach this form to your federal and state returns.
Tax preparers know that for unfiled tax returns from earlier years, you can request a transcript of Forms W-2 from the IRS. These transcripts provide most of the information found on the W2 Forms. However, not all the information from the W-2 is on the IRS transcript.
Pay special attention to the information on lines or in boxes, 15, 16, and 17. This information for state income tax, withheld and paid by the employer, is not on the IRS transcript.
Why Does This Matter for State Tax?
When we file our federal returns, we usually file our state tax returns. Those returns often have a liability, or tax due. But even if there is a refund due, we need to include the state income tax withheld to be credited for the payments. If you have not located your W-2 forms, contact your employers from those years. This is YOUR MONEY.
When we file our state tax returns, we need to include the state taxes withheld. Most states do not have a system for tracking the state income taxes withheld from your paycheck, except by collecting the IRS W-2 form. With the W-2 Forms, your refunds are just bigger!
How Do I “Unlock” This Extra Cash?
This information for your state payments is only available when the W-2 is attached to the state tax return. Even with electronically filed returns, an electronic version of the W-2 form is attached. However, your return preparer must have the W-2 form to create an electronic version to include with your state tax return.
If the return preparer does not have the W-2 Form when preparing your state tax return, you’ll get no credit for your taxes paid to the state when they were withheld from your paycheck. This is important to you because (again) this is your money.
Always try to keep and organize your annual W-2 forms. Otherwise, that part of your wages that were withheld and paid to your state could be lost forever. Remember, the W-2 Form is the only tracking system that most states have for your taxes, withheld, and paid.