How can a PA homeowner and (w2) employee working in PA uses an SD address for state income tax purpose? How will domicile work in this case? Is there any proof of address needed for that SD address?
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"...(w2) employee working in PA..."
Any income you earn by working in PA is taxable by PA, regardless of your state of residence. Since you are a W2 employee working in PA, you must file a PA tax return.
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