topic Re: Working in a different state in State tax filing

Working in a different state

lucreciagarcia75 — Sat, 14 Sep 2019 21:42:40 GMT

Hi, I just started working in a company located in PA but I live in MD, I’m working from home. I just received my first paycheck and they are taking my federal taxes, PA state taxes and Lower Merion TWS taxes, what’s going to happen with my Maryland taxes and Montgomery County taxes??? Am I going to have to pay them too??

Re: Working in a different state

Critter — Sat, 14 Sep 2019 22:15:18 GMT

Your employer should have talked to you about this already ... a form REV-419 should have been filled out ... talk to the employer asap to get this corrected quickly...

https://ttlc.intuit.com/community/state-taxes/help/which-states-have-reciprocal-agreements/00/25576

Re: Working in a different state

TomD8 — Mon, 16 Sep 2019 13:55:36 GMT

ALL your income is taxable by your home state of MD. Submitting Form REV-419 to your PA employer as described by @Critter should cause them to cease withholding PA taxes (and hopefully to start withholding MD taxes).

If no MD taxes have been withheld for you this year, and/or if your employer cannot or will not withhold MD taxes, you should consider making quarterly estimated tax payments to MD. Here's a link to MD's page on estimated taxes: https://taxes.marylandtaxes.gov/Individual_Taxes/Individual_Tax_Types/Income_Tax/Payment_Information/Estimated_Tax_Payments/

Re: Working in a different state

Hal_Al — Sun, 15 Sep 2019 15:34:14 GMT

The answers provided by Critter and TomD8 are basically & usually correct.

But PA has a special rule on out-of-state telecommuters. So, don't be surprised if your employer says he can't change it. If you work outside the state as a job requirement, you are only subject to PA State income tax on the days you work in PA. But if you work outside PA for your own convenience, you are subject to PA State & local income (Lower Merion TWS) tax on all your PA income. New York, Nebraska, Delaware and New Jersey have the same rule. For guidance see: http://www.journalofaccountancy.com/issues/2009/jun/20091371.html

If your are subject to PA taxes, you still have to file the income on your MD return, but MD will give you a credit for what you pay PA

Re: Working in a different state

TomD8 — Mon, 16 Sep 2019 14:09:42 GMT

@Hal_Al is correct. If you want to read PA's official rule on this, scroll down to the section headed "The Convenience of the Employer Doctrine" on this website: https://www.revenue.pa.gov/FormsandPublications/PAPersonalIncomeTaxGuide/Pages/Gross-Compensation.aspx#Nonres-AllocPAComp