Not sure I understand. Say My pension and SS is $50K and my wifes SS is $15K. You are saying we would file a joint return for $65K in BOTH states then apply the Amount we paid to each state as a credit to the other states taxes? I believe PA TAXES are higher. Couldnt that wipe out the taxes owed to AZ? (say PA tax was 4k and Az tax was 3k. 4k minis 3k = -1k
