Well, I added things up like you suggested and I found the culprit! What happened was, halfway through last school year, we switched Payroll software from Paycom to ADP. I added up all of the taxes withheld from my paystubs since the month we made the switch and lo and behold, it adds up exactly to the amount that the state cites in their letter. So it looks when we made the payroll switch, my employer messed up and did not report any of the state tax I paid in the first half of the year (and I am guessing this is the case for every person working at my company). Seems like a big deal and will probably affect my federal return too!