I live in PA, work only in DE & have different taxable incomes in because of before tax IRA contributions. After finishing DE taxes & adding PA, how do I get PA credit?

[DanielV01 · Accepted solution]

It's a double-entry in the PA return.  The credit for taxes paid to DE should calculate automatically, but first you must make sure that the Delaware and the PA income lines are not being combined on your PA return.  This will happen because of reporting and programming requirements that makes TurboTax add together any state income boxes.  However, the program allows you to eliminate the double-reported lines.  The instructions in the screenshots I provide below will help you to get the correct entries. 

Once you have eliminated the double-reported income, you will get (eventually) to the screen that talks about out-of-state tax credit.  If Delaware does not show, then you will need to manually enter the information.  For a manual entry, the double-taxed income is what shows on the Delaware line of your W-2.  The tax paid to Delaware will be the DE tax withheld, minus any DE refund or plus any additional amount owed.  TurboTax will adjust the credit amount for what PA will allow.  If information does show, review it to make sure it matches what is reported on the Delaware return.  As you mention, PA includes income for state taxation that Delaware does not, so your Delaware credit may not cover all of your income.  

Again, though, you will want to eliminate the double-reported income.  While the example in the screenshots below feature New York, the principle is the same for the Delaware income reported on your W-2:  

[ESE1959]

There are no screen shots to reference.  Other advice referenced a form I don't see.  Using Delux, how do I get PA to credit taxes paid id DE?

[JotikaT2]

You will be able to input your information to generate Form PA-40 Schedule G-L which is used to claim a credit for taxes paid to another state by following the steps below.  

1. You can get back into the input by going into the state tax interview section
2. Select Continue/Edit to the right of PA
3. Proceed through the screens until you see the page titled You've Finished your Pennsylvania Return:
4. Select Taxes and Credits.
5. Continue through the screens until you see Taxes Paid to Other States Summary

 

You will be able to edit your information in this section for any taxes paid to Delaware.