Do I Need to File In a State Where I Lived But Made No Money?

[nicolocke]

In 2020, I was a college student, going to school and working in Indiana. However, I was an official resident (based on drivers license and permanent location) of Pennsylvania. I did spend some time (about 3 months) living in PA after school was closed due to COVID-19. However, while living in PA, I did not make any money at all. All of the money I made was from an Indiana employer, while I was living in Indiana at school. I also did not collect any unemployment at all while in Pennsylvania.

Do I need to file taxes in Pennsylvania at all, if I made no money in this state, but lived there for a few months?

[TomD8]

Yes, as a legal resident of PA you must file a PA tax return.  PA can tax all your income, regardless of where you earned it.

Also, Indiana and Pennsylvania have tax reciprocity for W-2 earnings.  If your only income from Indiana was W-2 earnings, you do not have to file an Indiana tax return.  Note though, that if Indiana income tax was withheld from your pay, you'd have to file a non-resident IN return, showing zero Indiana income, in order to receive a refund of those taxes.

If you return to work in IN in future, you should file IN Form WH-47 with your IN employer.  This will exempt you from IN withholding as a resident of a reciprocal state.  You can download that form here:

https://www.in.gov/dor/tax-forms/withholding-tax-forms/

[nicolocke]

Thank you for the help!

So just to clarify, because all of my IN earnings were W-2 earnings, I should not file an Indiana Tax return? Also, I should file a Pennsylvania tax return where I include the Indiana W-2 on this return?

[TomD8]

Yes, you must file a PA tax return in which you include the IN W-2.

If you want a refund of the withheld IN taxes, you'll have to file a non-resident IN return to get it.  On the IN return, you would allocate zero dollars to IN.  You'll be able to do this as you go thru the TurboTax questions for the IN return.

[nicolocke]

Thank you!

[nicolocke]

Also, I have a friend who is in the exact same scenario, except her home state was Ohio, and not Pennsylvania.

To reiterate, she made no money in Ohio, and only made money from an Indiana employer while going to school in Indiana. Does she also need to file an OH return like PA, or are the laws different in Ohio?

Thanks!

[TomD8]

Assuming her income from IN is entirely W2 earnings, she MUST file an OH return and include her income from IN.

She files in IN only to obtain a refund of withheld IN taxes.

IN has tax reciprocity with OH as well as with PA.