I and my husband live in PA. I worked all year in PA, but my husband worked in New Jersey

[ermatiasfranco]

I and my husband live in PA. I worked all year in PA, but my husband worked in New Jersey. His employer withheld his New Jersey state taxes, so now my husband will have to file his NJ taxes even though we live in PA. Is it correct that we fill out the federal and PA state taxes together and he fills out the NJ state taxes as married and filing separately? Also, in the PA taxes option it says Any special Pennsylvania W-2 situations? We select the options *You earned income in another state.* and *You were a resident of PA working in another state or country and your employer did not withhold PA income tax.* Are these the correct options and what should we put in (form or schedule to which this statement relates) and (statement information)?

[Vanessa A · Accepted solution]

Are you seeing these statements in the PA return?  What did you select in the federal section?

When you file his NJ return, you will enter his wages as $0 but leave the amount of taxes withheld as they are.  PA and NJ have reciprocal agreements meaning you only pay taxes in the state you live in, not the state you work in.  You will then include all of his income on your PA return. This will likely leaving you owe PA state taxes, but you should get a full refund from NJ. 

This should be also be updated with his employer so they only withhold PA taxes. 

[ermatiasfranco]

 Also, in the PA taxes option it says Any special Pennsylvania W-2 situations? We select the options *You earned income in another state.* and *You were a resident of PA working in another state or country and your employer did not withhold PA income tax.* Are these the correct options and what should we put in (form or schedule to which this statement relates) and (statement information)?. Thank you

[Vanessa A]

You do not really need to select that you were a resident of PA working in another state as NJ income is taxed as PA income.  Basically, the only issue is the employer did not withhold for the correct state.  

You would not be entitled to any credits for taxes paid to another state, so select that you were a resident of PA working in another state or country and your employer did not withhold PA income tax may or may not apply.

When I create a PA/NJ return and go through the questions I am not seeing this particular question or answers. I do get one statement that says "based on what we know from your federal return, in addition to making money in PA, you also made money in NJ"  This money gets taxed twice by both PA and the other state, but don't worry if you see double taxed income as you go through your PA return.  Later on we'll help you get a credit that offsets paying double taxes"

Can you provide more detail on where you are seeing this?

[ermatiasfranco]

It is in these pages on the PA tax return 

[ermatiasfranco]

Turbo tax at the end of the PA taxes ask for * any special Pennsylvania W-2 situations?* in which we choose the option that says ( you were a resident of PA working in another state or country and your employer did not withhold PA income tax) because my husband's employer withhold taxes from NJ and not from PA. Then the page ask you to create a statement, I responded as follows:

Form or schedule related to the statement; W-2 

Statement information; My husband is a resident of PA who worked in NJ (a reciprocal state), and his employer mistakenly withheld the NJ taxes instead of PA taxes.

Is this correct?

[Vanessa A · Accepted solution]

So looking at the screen shot, it does appear as though you do need to put a checkmark in those boxes and then enter an explanation and mail in your W-2's.  

Here is a little more info just in case his employer did not change his withholdings to PA yet. 

"If you are a PA resident working in one of the reciprocal agreement states, and your employer withheld the other state’s income tax, you must file for a refund from that state. You must pay the amount of tax due to Pennsylvania by the due date.

In addition, if you earned more than $8,000 from your out-of-state employer, you should be making estimated payments to avoid an estimated underpayment penalty.

Effective 2024: The income threshold for individuals required to make estimated payments will increase from $8,000 to $9,500.   The amount will continue to increase over the next five years."  I am a PA resident. I work in a reciprocal agreement state.

Employee's Certificate of Nonresidence in New Jersey (Form NJ-165) 

[ermatiasfranco]

I responded to this information like this;

Form or schedule related to the statement; W-2 

Statement information; My husband is a resident of PA who worked in NJ (a reciprocal state), and his employer mistakenly withheld the NJ taxes instead of PA taxes.

Is this correct?

[Vanessa A · Accepted solution]

Yes, that would explain exactly what happened. Although, instead of saying my husband, you may want to use his name if you didn't in the statement. 

[ermatiasfranco]

How can I send W-2s for PA taxes if I e-file the taxes?  Or do I have to send the taxes by mail along with the W-2?

[Vanessa A]

You should still be able to e-file.  Then when you print your copy of the return, you will get instructions that go with your return.  This will give you an address to mail the W-2.

[ermatiasfranco]

I looked in the instructions but it doesn't give me an address and it says that I shouldn't send the taxes by email, but it confuses me because it had previously said that I should send the W-2s

[DawnC]

If you e-filed successfully, follow the instructions on the filing instructions page.   If it does not say to mail the w-2, then keep it with your tax records.