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Caesar_ta
Level 1

State Taxes Witholdings

I moved to a new company that allows me to work remotely. I noticed that in my bi-weekly paycheck, they continue to withhold state tax for the state that the company headquarters is in (Pennsylvania) but not the state where I currently live (Georgia). Will that have any impact on my tax filing at the end of the year? Should I ask them to change the withholding to GA to avoid future headaches?

5 Replies
STaxLady
Employee Tax Expert

State Taxes Witholdings

@Caesar_ta 

 

Thanks for this question. Many people currently find themselves in a situation where they are working remotely from one state, for a company in another state, and it can be confusing.

 

You stated that you currently live and work remotely in GA, and that the company headquarters is in PA. To accurately answer your question, I would need to know if the company also has locations in GA, and whether you had been transferred to a GA office. If you are working remotely and there is no change of location for your employer, PA would be the proper state withholding. 

 

The income would be taxed by PA and then, when filing your GA return, you would claim a credit for taxes paid to another state. 

 

Here is a link to an article that may be of help, depending on your particular circumstances: 

https://ttlc.intuit.com/community/file-taxes/help/do-i-need-to-file-taxes-in-each-state-if-i-worked-... 

 

If you have further questions, reply here and we will be happy to help.

 

Best regards,

STaxLady

 

 

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Caesar_ta
Level 1

State Taxes Witholdings

@STaxLady Thank you for the response. This topic is indeed confusing.

My current company does not have any office or location in GA. I'm working remotely in GA. From your response, it sounds like the proper withholding is with PA and I would claim a credit for taxes paid to another state.

 

STaxLady
Employee Tax Expert

State Taxes Witholdings

@Caesar_ta 

 

Yes Caesar! It seems that you understood this correctly. You will report the income to both PA and to GA, and then you will claim the credit for taxes paid to another state (PA) on your GA tax return.

 

Thanks for the follow-up!

STaxLady

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SundayInSalem
Level 7

State Taxes Witholdings

Your employer should not withhold Pennsylvania income tax if you are a non-resident. They should withhold Georgia income tax. Contact your payroll department. 

 

The Pennsylvania Department of Revenue says: A non-resident employee who is required to telework full-time from home in another state should treat his compensation as non-Pennsylvania source income even if his employer is located in Pennsylvania. In those situations, the employer is not required to withhold on the employee’s compensation.

See: Telework Guidance

 

You can file Form REV-419 to opt out of PA withholding and file Form G-4 to opt in to GA withholding.

STaxLady
Employee Tax Expert

State Taxes Witholdings

@Caesar_ta 

 

While what SundayInSalem stated, is often true of many states, I lend a word of caution here. The following link may provide some clarity to this for you:

https://www.revenue.pa.gov/COVID19/Telework/Pages/default.aspx 

 

Read the section titled "Personal Income Tax and Employer Withholding" and determine how this pertains to your situation. If you have further questions, don't hesitate to reach out.

 

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