TAXES. LIVE IN NC taxes only taken out from PA

[Danbold86]

So I live in NC and always have. I've worked from home for the past 6 years. And each Job was located in a different state(ex. Florida, Nebraska). But now I'm working still from home in NC but the employer is based in PA. This company is Taxing me from PA, but NO NC taxes are being taken out. Are they supposed to take out PA taxes bc everything i read they arent supposed to. And am i gonna get in trouble bc they havent taken out NC taxes on my last 5 checks(thats how long ive been here). Ive reached out to them from day one asking about my taxes and still not fixed, ive field out al the right info for my tax stuff. main questions are about my NC not getting taxed and why am i paying PA taxes when i dont live ther nor have i ever

[SteamTrain]

@Danbold86 

Others may be more knowledgeable about the "details" than I am...

BUT, briefly:

PA is one of 5(?)  states that tax telecommuting workers that are working from another state, remotely from the PA jobsite,  Thus the PA company may have no choice but to withhold PA taxes.  Seems like the PA company's HR people should be able to explain this to you if this is the situation for them/you.

.An exception would be...unless the employee (you) is "required" to work in the out-of-state site.  An example, would be being employed by a PA company, but you have to be physically in NC to monitor work at an NC construction site........and not for a situation where it's just convenient for you, and your employer, for you to be working from home(?) in NC.

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Certainly, there can be exceptions to this of which I may not aware.

Thus, unless there are details you havn't explained...with you appearing to be in a telecommuter situation, it is possible that PA can tax that income, and the withholding would be appropriate.   You would end up filing a PA non-resident tax return for the PA job income, and NC Resident tax return where NC calculates a tax on all you income, but  then NC lets you take a credit for the taxes you had to pay to PA  (you need to prepare the PA non-resident tax return first to calculate the exact PA tax liability...because the PA withholding is just a pre-paid estimated amount).

Since it appears that NC tax rates (~5%) are higher than PA (~3%), you may well end up owing the difference  (~2% ) to NC, but that would depend on your total income for the year, along with a bunch of differences between the two states in what they allow for their Std Deduction...or what they allow to be used for itemized deductions.

If you expect the 2% difference to be substantial at the end of the year, it might be a good idea to pay some NC Q3 & Q4 estimated taxes in Early Sept 2024 or early Jan 2025 (before the 15th of each month) to make up the difference so that you don't get penalized by NC for owing too much.   It might be possible that you can get the PA employer to start doing some NC withholding, along with their PA withholding.....but to do that they would have to be registered in NC, and they aren't usually required to do that unless they have an actual office (nexus) in NC with employees working in and out of that site. 

If the company does have an actual NC office site/division in NC (i.e. NOT your home)....you might be able to get assigned to their NC site, and then there should only be NC withholding once you are assigned there.....(but likely too late for what has already been designated as PA income & withholding).

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Again, Others may have some more details about nonresidents of PA, telecommuting to a PA company site.....I let your Q sit all day in case someone more knowledgeable would pipe in.