Confusion with W-2 for multiple states and gambling income/loss

[Max957]

Hello.  I live in Pennsylvania and work remotely for a company based in Delaware.  I received a W-2 for PA which lists the employers number as 1234, state wages (box 16) which match my federal amount and zero (0) state income tax box 17). 

I also received a W-2 for Delaware  which lists a different employer number, box 16 again lists the same as box 1, but box 17 lists a non-zero amount.  I also have gambling winnings (but no W-2G) from PA.  When completing the DE state tax, the amount listed is wages + winnings.  The PA state tax lists the same numbers as the DE.  Double tax, or what am I doing wrong? 

[Vanessa A]

Delaware is one of the states that tax remote workers as if you are working in the state.  This means, that your wages will be taxed by both DE and PA.  Your gambling winnings should only be taxed by PA, so as you walk through the DE return, you will need to adjust your income and remove the gambling winnings from DE.

In general, your home state will tax all in come from all sources.  What you will do is you will file a nonresident return for the states that you do not reside in, but you visit for work and earn money in.  When you file, you will fille out your nonresident states first.  Then you will fill out your resident state, claiming a credit for taxes paid to the nonresident states on your home state return.  You may or may not still end up owing money to your resident state depending on whether or not their tax rate is higher or lower than your nonresident state.  If the non resident state had a higher tax rate than your resident state, your credit will be limited to the amount of tax you would have paid to your resident state.  They will not give you a refund of the taxes you paid to the nonresident state. 

Multiple States

File Non Resident State Return