How to calculate double-taxed income NY and PA?

[butimnotachef]

There is a form to calculate the amounts taxed by both Pennsylvania and New York and the tax due on that income and I am completely lost in terms of how to fill it out. The context is that I worked in NYC and was a resident up until 8/1/22 when I moved to Philadelphia (so I think I was a partial resident in both NY/PA this year). I stayed at the same job in NYC through the move. I've heard that we are suppose to get a credit on the state tax paid in NY on the PA return, but am at a lost for how to fill out this form. Would greatly appreciate any guidance. 

[LindaS5247]

You should be filing a resident (PA) and a nonresident tax return (NY).  You should enter your nonresident state tax return first.

It is recommended to prepare the nonresident state first because your resident state will provide you a credit for the tax you pay to the nonresident state.  By preparing the nonresident state first, TurboTax can transfer the credit information to your resident state to return.  

So this should be calculated for you.

Click here for instructions on how to file your nonresident return.

Click here for information regarding filing multiple states returns.
 

[butimnotachef]

Thanks for the information! It doesn't look like Turbotax calculated this for me. And wouldn't I be a part-year resident in both NY and PA and need to file as such?

[HopeS]

Since there is no reciprocal agreement between PA and New York, you will have to file 2 part-year resident returns. 

New York handles part-year resident returns a little differently from other states.  

If you're a part-year resident of New York and want to enter different allocations for income earned inside or outside New York State, follow these instructions:

Entering these amounts into TurboTax

1. Sign into your TurboTax account
2. Continue to your return
3. Select State from the menu
4. Select Your State Returns from the menu
5. Select Continue or Edit next to your New York return
6. On the screen, Date of Last Move, enter the date you moved in or out of New York
   • Also, enter the description that best describes your situation as of December 31
7. On the screen, New York Income Allocation, answer No to the question, Were all of your wages and/or self-employment income earned in New York State?
8. On the screen, Form W-2 Summary, select Edit next to each W-2 you need to allocate
9. On the screen, Allocate Wages to New York, you can choose one of the following allocation methods:
   • 100% New York State income
   • Allocate by the number of days
   • Allocate by percentage
   • Don’t allocate this employer
   • Allocate over multiple years
10. On the Form W-2 Summary screen, select Done
11. On the screen, Tell us about your New York ReResident Income, and enter the amount of wages earned while living in New York. If none, enter 0 
12. On the New York Resident Income screens, enter any federal income received as a resident of New York State. If none, enter 0
13. On the New York Resident Deductions screen, enter any federal deductions attributable to the time you were a New York resident. If none, enter 0 
14. On the Tell us about your New York Nonresident Income screen, enter the amount you received from New York sources while living outside New York. If none, enter 0
15. On the New York Nonresident Period screens, enter any federal income received as a nonresident of New York. If none, enter 0 
16. On the New York Nonresident Deductions screen, enter any federal deductions attributable to the time you were a nonresident. If none, enter 0
17. Follow the remaining on-screen instructions to complete your return

See the link below as well for more detailed information:

New York State Income Part-Time Resident

@butimnotachef 

[butimnotachef]

Thanks so much for this! Helpful for filing out the NY tax return. Do you have any guidance on filing at the PA one? I followed instructions to fill out NY and some comments in other thread made it seem like the tax credit for tax paid in other state would be automatically calculated by Turbotax but its not the case for me and having hard time manually filling it out. 😥

[HopeS]

You should have received a W-2 that shows your income for PA from 8/2/2022 - 12/31/2022 and a separate one for NY. If you did not receive a separate W-2 for PA you should follow up with your job since this will be the easiest way to allocate the income.

The income and taxes withheld reported on your PA return should mirror your W-2 for PA. Since you continue to work for the same job, review the allocation methods suggested below:

As mentioned above some companies will send you a W-2 with the state totals listed, Others will send you two separate W-2s for each state. If not or they didn't change the withholding to the second state, then you’ll have to estimate how much income you earned as a resident of one state versus the other. Here are a few ways to do that:

Method 1: This is the simplest method of all and the most accurate if your income fluctuates from paycheck to paycheck (as mentioned above)

Find a pay stub with the pay period ending around the time of your move. The YTD (year-to-date) amount on the pay stub is how much you earned while residing in your former state.

Method 2: This method is pretty accurate as long as your income is more or less the same from paycheck to paycheck.

Estimate the number of weeks/months you worked at that job while a resident of one state and divide it by the total of the number of weeks/months you worked at that job to come up with a factor. Apply the factor to your total income from that job to come up with the allocation for that state.

For example, if you worked at that same job the entire year and moved in early May, you earned roughly 4 months' worth of income (1/3 or 33% of your total income) in your old state. Multiply the total income from that job by .33 to obtain the allocation for your former state. The remainder gets allocated to your new state.

Review the link provided below for additional guidance:

Allocate income for part-year state return

@butimnotachef