State tax filing

Student in NC- first issue, where your parents live vs your residency. If your parents do not live in NC, you probably were never a NC resident. Residency is the place you call home and where you intend to return after school. Maybe you had a NC license, registered to vote, car tags, etc.

File either a nonresident or part-year resident NC return for the time there. Income earned while in NC is taxed to NC on either return.

As you go through the NC return, it asks about the wages and NC source. You need the correct wages and tax to pull over. Follow these steps:

1. Open to federal income
2. Edit the W2 (employer already notified federal and states)
3. Scroll down to the state section of the W2
4. Enter the correct wages for while you were a NC resident. 
   • If zero was earned while in NC, mark zero wages and zero tax. (Put all of the income under PA) 
   • If you did earn something while in NC, enter the wages and tax.
5. Continue
6. If you had zero wages, you need to enter the $1,000 tax paid.
   1. Go to federal deductions and credits
   2. Scroll down to Estimates and Other Taxes Paid
   3. Select Other Income Taxes
   4. Scroll down to Other Income Taxes Paid in 2025
   5. Select withholding not already entered on a W2
   6. Select yes to withholding not yet entered
   7. Select the state and enter the tax paid
7. continue through to state return

Next, complete PA - a part-year or resident return (if that was your residency all year).

• If part-year, list only the income earned while in PA.
• If full year, list all income and claim a credit for the tax paid to NC.

You need to do the states in this order, if you are claiming a credit. The credit will be the lower of the state tax liabilities on the same gross income. You may owe your resident state,  if they have a higher tax rate along with differences in how the taxable income is calculated.