State taxes paid on a lawsuit settlement

[muel87]

I received a W-2 for a class-action lawsuit settlement. Half of it was considered "wages" on the W-2. The lawsuit applied to a time when I was employed and living in NY, but I'd since moved to MD. My MD address is listed on the W-2, yet NY state taxes were withheld from the settlement. Is this correct? Shouldn't I pay taxes to the state I lived in when I received the income?

[Silk McCue]

I certainly wouldn’t pay taxes in two states. It seems to me that the income is associated with NY and that they should receive the taxes that would have been due had you been compensated properly and timely. The authority that made this decision certainly thought so.

Just my two cents.

Cheers

[jebmke]

I certainly wouldn’t pay taxes in two states. It seems to me that the income is associated with NY and that they should receive the taxes that would have been due had you been compensated properly and timely. The authority that made this decision certainly thought so.

Just my two cents.

Cheers

yes; I had a claim from WI for some options I exercised. Once I was able to demonstrate that the options were under water the entire time I worked in WI the issue went away.

As a practical matter, if one has sufficient other tax liability in MD, the NY tax would be credited against MD income tax.