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cunn1986
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Doing NJ. Earnings less than $10K but Phila wage taxes should be refunded. TT shows 0 taxable wages & says there is no tax credit for the Phila wage tax. Is TT correct?

Live in NJ, but work in Philadelphia, PA.  PA has a reciprocity agreement with NJ, so I know that I don't need to file with PA, but the Philadelphia city wage tax should be refunded. The gross earnings were less than $10,000.  But I don't understand why Turbo Tax is calculating taxable earnings as 0.  TT also says that there we are not eligible for the Philadelphia tax credit.  I don't believe that to be true, but I am not sure since TT says I am not correct.  Thoughts/ help please...

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Doing NJ. Earnings less than $10K but Phila wage taxes should be refunded. TT shows 0 taxable wages & says there is no tax credit for the Phila wage tax. Is TT correct?

Your NJ credit for the Philadelphia Wage Tax cannot be more than the amount you would have paid if you earned the income in New Jersey.

http://www.state.nj.us/treasury/taxation/njit14.shtml

Because your NJ gross income is less than $10,000, you do not need to file a NJ return. Since your NJ taxes are zero, your credit for Philadelphia taxes paid is also zero.

http://www.state.nj.us/treasury/taxation/njit23.shtml

You cannot get a refund from the City of Philadelphia, since you did indeed work there.

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2 Replies

Doing NJ. Earnings less than $10K but Phila wage taxes should be refunded. TT shows 0 taxable wages & says there is no tax credit for the Phila wage tax. Is TT correct?

Your NJ credit for the Philadelphia Wage Tax cannot be more than the amount you would have paid if you earned the income in New Jersey.

http://www.state.nj.us/treasury/taxation/njit14.shtml

Because your NJ gross income is less than $10,000, you do not need to file a NJ return. Since your NJ taxes are zero, your credit for Philadelphia taxes paid is also zero.

http://www.state.nj.us/treasury/taxation/njit23.shtml

You cannot get a refund from the City of Philadelphia, since you did indeed work there.

Doing NJ. Earnings less than $10K but Phila wage taxes should be refunded. TT shows 0 taxable wages & says there is no tax credit for the Phila wage tax. Is TT correct?

Because you are filing a New Jersey tax return, TurboTax does not do the Philadelphia tax credit.  You can apply for it by sending a copy of your New Jersey tax return to Philadelphia.  Because you do not have taxable income in New Jersey, you may have to mail your return (you may not efile with zero taxable income)

The City Wage Tax is a tax on salaries, wages, commissions, and other compensation. The tax applies to payments that a person receives from an employer in return for work or services. All Philadelphia residents owe the City Wage Tax, regardless of where they work. Non-residents who work in Philadelphia must also pay the Wage Tax.

If you’re approved for tax forgiveness under Pennsylvania 40 Schedule SP, you may be eligible for an income-based Wage Tax refund. People who meet the criteria can receive a refund of up to 0.5% on City Wage Taxes that their employer withheld from their paychecks.  Non-Pennsylvania residents who work in Philadelphia but do not file a Pennsylvania income tax return must include a signed copy of their state income tax return to be eligible for the income-based rates.

Income-based Wage Tax refund.



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