PA resident working for a Kentucky company

Forum|Forum|4 years ago
August 23, 2022
11 replies
64 views

Hi,

I would appreciate some advice on how to fill W4 for both and whether to file return jointly or separately with spouse. If filed jointly how is out of state income credited in home state?

Me: income:155k, living in PA, working in KY

Wife: income:59K, living and working in PA

Best regards

NCperson

Level 15

@krash16_

this is for the State return:

you will file as a non-resident in KY and it will only assess YOUR KY earned income....

when you jointly complete the PA return, you will get a credit for the taxes paid to KY so that your are not paying taxes twice on the same dollar of income.

As far as federal tax return, the IRS doesn't care about working in one state and living in another.... fille out the W-4 as you would as if you worked in PA.

and just to confirm - because in this virtual world, this confuses many - you are PHYSICALLY working in KY, right? it's not a situation where you are physically working in PA but the company is located in KY.

krash16_Author

Level 2

thanks for the clarification @NCperson

As to your question, I am physically present in PA and working remotely for the KY based company. The company mentioned I would need to visit KY some times in a year just to meet the team, but the majority of work will be done whilst I am physically present in PA.

I have some follow up questions. I just moved to the US so all this is new for me. As to the filling of W4, as I have the higher paying job, I was thinking of filling section 4(c) for extra withholding based on the tables for my W4 and will leave my spouses w4 empty apart from personal info.

Is my understanding correct that we will jointly file in PA stating both of our incomes earned and I will have the taxes paid in KY credited. Actually it seems for PA credit I can only credit the lower tax liable amongst the home and other state. As PA has lower taxes I guess I will be able to credit the complete PA tax that I would have to pay for my income? Thanks

NCperson

Level 15

@krash16_ - let's go back and start over.... you pay state tax based on where you PHYSICALLY live and PHYSICALLY work. The fact that your employer is in KY does not matter. So you will have PA taxes withheld from your paycheck and only file PA state taxes.

the W-4 is for FEDERAL tax withholdings. Use this tool to help determine how much to withhold for FEDERAL taxes

https://www.irs.gov/individuals/tax-withholding-estimator