I live in PA but work in Delaware . When I do my taxes in Turbo Tax, it is only crediting part of the taxes that I pay to Delaware towards my PA taxes. This is because it is only including a part of my income because DE deducts 401K and HSA contributions, but taxes at a higher rate, so total taxes are higher than PA. For example if I make $100,000, and contribute 40,000 to my 401k and HSA, my DE taxes only use 60,000 to get their taxes of roughly $3200. The G/L form in Turbo Tax only credits the PA tax on 60,000 to get roughly $1800 in credits rather than the full $3200, but then I get taxed again on the remaining $40,000 at the PA rate. Should Turbo tax really be using the full amount,100,000, so that the full DE tax is credited? Is there a mistake? My DE tax entry on the W2 does show the subtracted value but my full salary is a DE salary not a PA salary. I feel like this is wrong and I am double taxed on state.
