Are Massachusetts Unemployment Benefits Received taxable income for Pennsylvania State Taxes on PA-40 return?

Forum|Forum|1 year ago
March 15, 2025
1 reply
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I have unemployment compensation from the state of Massachusetts but I am a resident of the state of Pennsylvania.

Are the Massachusetts Unemployment benefits taxable income on the Pennsylvania form PA-40?

Also, can I take an out of state tax credit for the taxes I paid to Massachusetts for the Massachusetts Unemployment benefits on Pennsylvania Schedule G-L?

Thanks

MaryK4

Level 15

Pennsylvania does not tax unemployment compensation. See Income Items Never Taxable as Pennsylvania Compensation.

See Unemployment Compensation.

Because Pennsylvania does not tax Unemployment Compensation, you cannot get a credit for the taxes you paid on the Unemployment Compensation income to Massachusetts.

A Pennsylvania resident taxpayer who has non-Pennsylvania sourced income subject to both Pennsylvania personal income tax (“PA PIT”) and the income or wage tax of another state (according to Pennsylvania sourcing rules) on the same income during the same taxable year, can claim a credit for the tax paid to the other state as a credit against his or her Pennsylvania personal income tax, subject to certain limitations. See Resident Credit for Tax Paid to Another State.

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