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Hybrid tax situation NYC & PA

I split work week with 40% based out of NYC and 60% based in PA. Taxed for NYC in W2. Residence in PA. Would I be eligible for a tax credit as PA taxes are significantly lower.

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5 Replies
TomK2023
Expert Alumni

Hybrid tax situation NYC & PA

Maybe.  You will need to file a New York nonresident tax return and a Pennsylvania resident tax return.

 

In most cases, if you live in state that has income tax, you will get a credit on your tax return for the state you live in for part or all of the tax that you pay to the other state. 
 

Once you've determined that you need to file a nonresident state return, the first thing you want to do is make sure you've filled out the Personal Info section correctly:

  1. With your return open, select My Info in the menu.
  2. On the Personal info summary screen, scroll down to Other State Income, and select Edit.
  3. At the Did you make money in any other states? question, answer Yes and make sure your nonresident state(s) are selected from the drop-down.
  4. Select Continue to return to your Personal info summary.

After you finish your federal return, you'll automatically move to the State tab, where you'll see your nonresident state(s) listed in addition to your resident state.

 

Tip: To ensure accurate calculations, always complete the nonresident return first if filing in multiple states because your resident state might give you a credit for any taxes paid in that situation.

 

TurboTax FAQ: How do I file a nonresident state return?

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Hybrid tax situation NYC & PA

Thanks, how do the New York City taxes work ? Should I follow the same procedure or do they have different implications 

Vanessa A
Employee Tax Expert

Hybrid tax situation NYC & PA

You would follow the same procedure to file your NYC taxes, however, PA only gives the credit for taxes paid to another state, not taxes paid to a city.  So you will not get a credit on your PA return for taxes paid to NYC only to NYS.  

 

Also, be aware, that the credit you see on your PA return will be less than you actually paid to NYS as PA has a 3.07% flat rate tax and NY taxes are generally higher.  The credit for taxes paid to the other state is limited to the 3.07% flat rate on the income you are claiming. 

 

PA Deductions and Credits

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Hybrid tax situation NYC & PA

Thanks for elaborating, one final question would the NYC tax situation remain the same irrespective of county/township taxes in PA state.

Vanessa A
Employee Tax Expert

Hybrid tax situation NYC & PA

Possibly.  There are MANY jurisdictions  in PA and many different rules.  Philadelphia, is one that does give you a tax credit for taxes paid to other local jurisdictions.  Depending on where you live, you may want to contact your local taxing authority to find out if they give credits for taxes paid to other jurisdictions. 

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