DanielV01
Expert Alumni

After you file

The fact that you had taxes withheld in PA does not mean your income is automatically taxable there.  For instance, if the company is located in PA, but you work in a NY office of the company, you are only taxed in NY.  In a case like this, if they've mistakenly withheld PA tax, then you will file a PA nonresident tax return with $0 of income (there is a way to mark your income as nontaxable in Pennsylvania in the state return), and then your PA withholdings are refunded.

 

On the other hand, if the income is telecommuting (working remotely from home), then PA will consider your income as taxable there.  And if your promotion was because of a change in circumstances involving remote work, then this could be why they began to withhold PA tax.  If this is the case, however, New York (who will tax all of your income regardless) will give you a credit for tax you pay to PA for any income earned there.

 

And none of this has any bearing on your previous withholdings, unless your company indicates otherwise.  In the unlikely event that were to be the case, you would then file PA returns for the affected year(s), and amended NY returns to claim the credit for taxes you would then have to pay to PA.  (You also might have an argument with the state to have any penalties and interest waived also).  But, again, this is the least likely scenario.

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