Up until last year I was living in Texas but started a new job in Maryland in mid January. My new employer agreed to a delayed relocation until my kids' finished the school year, so I flew to Maryland every week, and flew back home to Texas for the long weekend (Fri-Sun). Kept up with this schedule until my family was finally able to move with me to Maryland in June.
What complicates matters is that my employer claimed to not have "business dealings" with Texas and therefore automatically had Maryland state income tax deducted from my first 1 or 2 paychecks without my knowledge and consent until I caught on. Since Texas has no state income tax, I was hoping not to pay into Maryland until I officially moved. In response my employer said the only other options were to pay Virginia or Pennsylvania taxes so I chose the latter since taxes are considerably lower than MD and I have a sister-in-law there with a mailing address I could use. I then started paying taxes to Maryland in June to coincide with my finalized relocation.
Questions:
1. Do I even need to pay taxes to Pennsylvania, or could all or most of that be given back as a refund? I lived in Texas during that time, but worked in Maryland, and didn't even step foot in PA during that time period.
2. How should I allocate my income then?
- Option 1: Texas (Jan-May or 41.67%) and Maryland (June-Dec or 58.33%); or
- Option 2: Texas (1st half of Jan or 4.17%); Maryland (2nd half of Jan to Dec or 95.83%)
since I worked in MD from mid-January through end of December - Option 3: Texas (1s of Jan or 4.17%); Pennsylvania (mid-Jan - May or 37.50%) and Maryland (June-Dec or 58.33%)?
3. Based on my W2 statement, allocation for state income tax determination should be based on which of the following?
- Box 1 - Wages, tips, other comp
- Box 3 - Social security wages
- Box 5 - Medicare wages and tips
