COVID19 work from home different state

Forum|Forum|5 years ago
April 4, 2021
1 reply
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My wife and kids live in NC and I work in PA (used to live in NC as well but moved to PA late 2019). Since March 2020, I came back to NC and stayed with my family while working from "home". I plan to use NC as my residency because that's where I stayed in most of 2020. A few questions:

1. For federal return, we will file jointly (MFJ). For state return, my wife only need to file NC return, but I need to file both PA and NC return, right? Shall I file PA state return as non-resident or part-year resident?

2. I've reviewed past questions regarding this topic. It has been suggested that we prepare a mock MFS for each of us and then file state return based on each mock MFS. Do I have to do that?

3. I had some excess contribution to both HSA and 401k during 2019. So at the beginning of 2020, I got some distributions from both HSA and 401k. For 401k distribution, I got 1099-R. For HSA, it's a 1099-SA. Question: shall I count them as income? If so, where shall I put them in the TurboTax?

Thank you very much!

MaryK4

Level 15

Since you will be using North Carolina as your domicile for 2020, you can file a Nonresident Pennsylvania tax return. You can then file North Carolina jointly with your wife and get a credit for the taxes paid to Pennsylvania. This way you do not have to do the state separate/mock returns at all.

Yes, you will have to enter your 1099-R and 1099-SA in TurboTax. You can find them on the list under Income.

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yz493Author

Level 4

Thanks! One more question: how can I get a credit for the taxes paid to Pennsylvania? Is there any specific tax code/rule for the credit you mentioned? Thanks!

MaryK4

Level 15

You will want to prepare the Pennsylvania tax return first (so you know how much tax you pay to PA). In the North Carolina state tax return section of TurboTax, look under Credits- Other state tax credits. (see below)