I live in Delaware and work in PA, my employer takes Delaware taxes out my check but not PA taxes, will I end up owing? My Delaware taxes are higher than PA

[re2boys]

If you worked in PA, PA income taxes should have been withheld. Need to ask your employer why he did not withhold the PA state and local taxes as required. See <a rel="nofollow" target="_blank" href="http://revenue.delaware.gov/services/wit_folder/section11.shtml">http://revenue.delaware.gov/service...>

[re2boys · Accepted solution]

Here is the official way it should be done:

You file a PA non-resident return declaring the income earned while working in PA.  Since there was no withholding, you will owe quite a bit. If you had 401k deductions, use the Medicare wages as your PA income.

Then you prepare a DE resident return declaring all your income, including that earned in PA.  You also request a credit for taxes paid to another state (from your PA return).  Since he withheld for only DE, you should receive a significant refund.

[LadyLee1965]

I HAVE THE SAME SITUATION, ONLY I DID PAY THE TAXES IN PENNSYLVANIA. WHY ON EARTH IS DELAWARE CLAIMING I OWE THEM?  LAST YEAR IT WAS $19.  THIS YEAR IT'S SHOWING i OWE THEM UPWARDS OF $155O.  WHAT IS GOING ON ? WHY AM I BEING TAXED IN DELAWARE WHERE i LIVE BUT HAVE ONLY WORKED IN PENNSYLVANIA?  THIS IS NOT RIGHT! Also.. what is this amount being based on? 

I received about 17K from unemployment due to the pandemic, less than 2K with one of my part time jobs and only 4K with the other.  why on earth would I have to pay upwards of over a grand to delaware ?  something is definitely wrong!  I am typically below poverty level income as it is.  and because I received 17K in unemployment having taxes taken out before getting paid, I seriously think something isnt right.  someone please help!

[DianeW777]

You will always be taxed in the state where you live. Your resident state will give you credit for taxes paid to another state to eliminate double taxation.

File your resident state last.

File PA as a nonresident to include only the wages earned while working in that state. TurboTax will walk you through this state interview.  Be sure your residency is  "nonresident".

It should be a break-even (+/-) situation because the state withholding is exactly the state rate.

File Delaware as a resident and then utilize the Credit for Taxes Paid to Other State. Delaware will give you a credit of the actual tax paid to PA or the tax they would have charged on the same income, whichever is less.

• Sign into your TurboTax account > Select State Taxes > Select Review next to Delaware
• Continue to Credits and follow the prompts.- TurboTax will carry the information for you.