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bsbksul
New Member

A person is a PA resident, worked in DE. Does the DE income have to be picked up on the PA local income tax return?

 
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re2boys
Level 9

A person is a PA resident, worked in DE. Does the DE income have to be picked up on the PA local income tax return?

Your municipality has the right to tax the earned income of its residents regardless of where earned.

Any unused "credit for taxes paid to another state" can be used as a credit on your Berkheimer local earned income tax return.

Say you paid $100 to DE.  Your PA Schedule GL  allows you a credit of $80 on your PA tax return.  The remaining $20 difference can be used as a credit on your Berkheimer return.  This credit can not be used to obtain a refund of local taxes.

See line 12 of the Berkheimer form   https://www.hab-inc.com/wp-content/uploads/FinalWEBDCEDFPM.pdf

and line 12 instructions.

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4 Replies
re2boys
Level 9

A person is a PA resident, worked in DE. Does the DE income have to be picked up on the PA local income tax return?

Your municipality has the right to tax the earned income of its residents regardless of where earned.

Any unused "credit for taxes paid to another state" can be used as a credit on your Berkheimer local earned income tax return.

Say you paid $100 to DE.  Your PA Schedule GL  allows you a credit of $80 on your PA tax return.  The remaining $20 difference can be used as a credit on your Berkheimer return.  This credit can not be used to obtain a refund of local taxes.

See line 12 of the Berkheimer form   https://www.hab-inc.com/wp-content/uploads/FinalWEBDCEDFPM.pdf

and line 12 instructions.

CarolynM
Level 1

A person is a PA resident, worked in DE. Does the DE income have to be picked up on the PA local income tax return?

Unfortunately, yes. 

As a Pennsylvania resident you are taxed on the income you earn in Delaware. 

However, if you complete the Delaware Non-Resident Tax Return first, you will receive credit on the Pennsylvania Resident Tax Return for the taxes paid to the other state.

For more information, follow this link: PA Who Must File 

bsbksul
New Member

A person is a PA resident, worked in DE. Does the DE income have to be picked up on the PA local income tax return?

I understand that the income has to be picked up on the PA resident return, and I will receive a credit for taxes paid to DE, but PA also requires a local earned income tax return.  Berkheimer is the agency that the return would be filed with.  Is income earned in DE included on this local earned income tax return, or are just wages earned in PA included on this return?
CarolynM
Level 1

A person is a PA resident, worked in DE. Does the DE income have to be picked up on the PA local income tax return?

Yes. As a resident of your locality, you are taxed on this income
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