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Unless the spouse and child were included in the lawsuit, they expenses can't be deducted from the settlement, but they can still be taken on SCH A as long as the expenses were incurred by a licensed medical professional, and not paid by insurance.

Thanks for all of the replies and advice. Client finally did get Clickworker to reply and they closed the account. Client is following up with credit agencies with credit report and freeze, IRS fraud hot line, getting a transcript from the IRS, and identity theft pin, ect. We will attach 8275 to the return to disclose the fraudulent 1099-NEC.

Best to file an extension.

Spoke with ATX technical support today. She says this isn't an option this year, the removed it. I asked her to pass on to the powers that be that this was a really dumb move on their part and is wasting our time.

I should add; and envelopes with windows for the Uni-forms

I keep a small supply of ATX Uni-forms for just this reason. Few and far between. Only a handful each year.

OP said that only 26 days were work performed in MA. Still need a MA non resident return but only for 26/280 days.

@JohnH I will not be worried about employee living in NC or employer headquartered in MA. I will be looking at where end client work is being performed & that is exactly what respective states will look for. If in fact work is performed in MA then employee will be filing MA non resident & would take MA NR tax credit in NC resident tax return. I believe this is the safest approach based on facts stated. You should also check if NC & MA has any reciprocal agreement.

Thanks, John, good discussion. I learned some useful things since my posts make it readily apparent that I don't have any clients in this particular situation.

In this specific case, since the employer is in MA, probable more delicate than difficult. I suspect an oversight, maybe belief the pandemic rules were still in place, maybe new payroll person. Normally, I would pass. But this case, I would share the options with the potential client and let them adult. If they want to do it right, I would take it on.

If the employee is a NC resident, doesn't he report ALL wages on his NC resident income tax return? Then, can't he take a NC credit for any taxes paid on the same income to MA or any other jurisdiction? (I have only one NC client, so those are questions and NOT facts.) You said your client worked IN MA, also. KPMG NOTE: Beginning September 15, 2021, employees working remotely outside of Massachusetts should have wages reported and taxes withheld to the state where they are physically performing services. Employers will want to make sure they are registered for payroll in the states their employees are working remotely, and able to handle the complexity of compliance for a mobile workforce. From the 2022 MA NRPY instructions: What Is Massachusetts Source Income for Nonresidents? The term “Massachusetts source income” is used throughout this booklet to describe the types of income which are taxable to a nonresident. A nonresident is only subject to tax on items of income derived from or effectively connected with:◗ Any trade, business, or employment carried on in Massachusetts (see the following section);...◗ All wages, salaries, tips, bonuses, fees and other compensation which relate to activities carried on in Massachusetts, regardless of where or when the compensation is paid;... I've had decent luck calling the MA DOR.

That’s the rub we have gone over here more than once. In this case, ot may be an oversight since the employer is based in MA.

How do you file a NC return with less wages than shown on the W 2? So are you going to have your client ask his employer to amend his W 2?

It is the reverse of the usual. The usual is an employee not providing accurate work location. indeed, the employee should file their return properly. the employee must carefully consider the ramifications of enlightening the employer. But, it may just be an oversight since the employer likely already has MA payroll nexus. Another case of lifetime employment (dealing with these things) as there is zero chance all states will agree to any common sense rules for mobile employees. My usual advice is to assume each state taxes for one millisecond or all of them (in state) unless there is an exception. Even this can be sketchy in the case where more than one entity wants a bite.

If it was my client I would follow the W 2. I don't know if NC does W 2 matching but my state does.

On quick look, the answer appears to be yes, MA wants their bite. I did not see any allowance for a certain number of days per year to be ignored. Pandemic created some exceptions, so look into those if they apply.

What does his W 2 say with respect NC and MA Wages and SWH?

A lot of east coast states use "convenience of the employer" to determine tax home, but I don't know about NC. MA has survived at least one court challenge to it's telecommuter tax rule: https://www.twrblog.com/2021/06/supreme-court-denies-new-hampshires-challenge-to-massachusetts-telecommuter-tax-rule-convenience-of-the-employer-lives-to-see-another-day/

Both states will want personal and business income tax, as much as they can get. likely the employer did not consider the ramifications first, so it may require much back digging to apportion. The recent discussion on MTC’s suggestions for modern take on 86-272 is going to be a long lasting nightmare.

I'd rather blow $3.49 each and get EFileMyForms to take care of it all. I know for certain-sure that their system works.

"Company seems to be a complete SCAM. I received a FAKE 1099 from them and NEVER worked for them. Good luck getting an account setup. Good luck getting a hold of any PERSON. It's so terrible I have to report them to the IRS, Better Business Bureau." Date of experience: January 25, 2023 Reply from clickworker "We are really sorry to hear that you have become the victim of identity theft on our platform and that someone is fraudulently using your personal data. Unfortunately, such cases happen from time to time, although we try our best to verify newly registered users. But if they know all your required personal data including your name, address and SSN, it is hard to catch them before they do harm (or in this case, earn money using your identity). Please contact us at https://supportworkplace.clickworker.com/support/tickets/new about this and send us the userID mentioned on the 1099 you have received from us. Once we have that number, we can locate the matching fraudulent account and suspend it permanently. If you need any further assistance regarding communication with the IRS, etc., please let us know., too. We will do anything we can to support you in solving this issue. Kind regards, Clickworker Community Support." Well your client has company. :(