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I was helping a friend with the taxes, and she has a nasty problem. She lived in NY state in 1997, and in late December moved to New Jersey. She was on maternity leave at the time. When she came back, she changed her address with Employer. By the time company processed that, it was late spring.

She only worked in NJ. But the company withheld both NY and NJ taxes, and more than that, the box for stage wages shows both NY and NJ amounts, and sum is 30% greater than the total income. I guess the company should correct W-2, right? What is the right way to handle this situation? If she can not resolve this very soon with the company, can she file NY state nonresident return with the NY wages of ZERO, even though her W-2 amount is 12K+?
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I had something similair occur when I started working, the company didn't update their records before my first paycheck went out, so there were unnecessary state witholdings. My solution was to talk to HR and get them to refund the witholdings and square the problem with the state.

Assuming your friend's HR dept. isn't as nice as mine,I'd do just what you propose as far as filing a non-resident return. I'd attach a note explaining the snafu with copies of some supporting documentation (i.e. NJ lease, etc.) Calling the NJ tax people might also be a good idea as they would know what sort of documentation would be helpful.
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