topic Multiple homes and state residency (PA and NJ) in State tax filing

Multiple homes and state residency (PA and NJ)

jp127 — Mon, 07 Feb 2022 20:25:22 GMT

My GF and I work in NJ but now often telecommute from home (also in NJ). The NJ house is owned entirely by her.

I bought a house in PA (entirely owned by me) and we use it as a second home. Since we are both hybrid we will also at times telecommute from PA.

What is our tax obligation with regards to filing in PA? I think because of the reciprocal agreement, we don't need to file a PA return for our NJ wages?

Also, if I have investment income and am a partial PA resident, does that change the scenario?

Re: Multiple homes and state residency (PA and NJ)

Vanessa A — Mon, 07 Feb 2022 20:51:30 GMT

If you are going to be a part year PA resident, then your investment income and employment income will both be taxable as a PA resident. You would need to track your days in PA and your days in NJ. Your income will be prorated for each state based on the time you spend in each state.

Re: Multiple homes and state residency (PA and NJ)

jp127 — Mon, 07 Feb 2022 21:30:08 GMT

OK, thank you. So in TurboTax I trigger that by noting that I earned income in two different states? When I do that it specifies my PA state return as Nonresident and NJ as resident but as I understand it I should be filing both as resident?

Let me also make sure I am clear that this is a second house and we live in both. The TurboTax "lived in another state" seems to suggest only the "moved to another state" usage.

I assume I allocate my W2 by allocating business days, while investment income is allocated by percentage of calendar days?

Re: Multiple homes and state residency (PA and NJ)

Vanessa A — Mon, 07 Feb 2022 21:31:16 GMT

You will trigger the second state if you answer yes in the Personal Info section to the question, Tell us the state(s) you lived in. Select yes, then enter PA and NJ.

Re: Multiple homes and state residency (PA and NJ)

jp127 — Mon, 07 Feb 2022 21:48:20 GMT

So, do I file as Part Year Resident in both PA and NJ then? Since my income is still from a NJ company do I need to file both a resident and non-resident return?

Re: Multiple homes and state residency (PA and NJ)

ErnieS0 — Mon, 07 Feb 2022 22:04:27 GMT

You cannot file a part-year return for either state if you did not permanently move into one house or the other and have taken steps to establish residency in the other state.

Even if you use your PA home as a "second home", you may still be a PA resident if you have have a PA driver's license, vote in PA, list PA and/or use your PA address for your banks, doctors, etc,

In that case, you have not abandoned PA residency regardless of the amount of time you spend in PA. It's the same as if you spent 8 months in a Jersey shore home.

Your must first decide where your permanent home is.

If your permanent home is in NJ, then you will file as a NJ resident and report all your income to NJ.

If the PA home is in your name only, it sounds like you are a PA resident and your GF is a NJ resident.

Is your employer withholding PA tax? If you are a PA resident working in NJ, your employer should be withholding PA tax because the two states have a reciprocal agreement so you only have to file a PA resident return and report all your income to PA.

Re: Multiple homes and state residency (PA and NJ)

jp127 — Tue, 08 Feb 2022 15:10:48 GMT

Thank you @ErnieS0

Yes, I have not abandoned living in NJ. Still have NJ driver's license, registration, voting, etc. and will likely still spend more than half the time there.

I was concerned telecommuting from PA might change that equation.

Thank you