I see on the turbo tax state it ask about other taxes paid. Do I claim the credit on the Philadelphia wage tax?
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Yes, you claim a credit for taxes paid to Philadelphia on your NJ return. However, you should have a W2 showing NJ taxes withheld. NJ and PA have reciprocity, so residents only pay state tax to their home state. Cities aren't covered by reciprocity, which is why Philadelphia was withheld.
To input the credit for taxes paid to Philadelphia, you need to access the Credit For Taxes Paid section of the New Jersey interview under State Taxes.
This will calculate your credit. Click PDF below for images.
No matter where you are in the interview, you can also go forward or back to find the Summary of Taxes Paid to Other States screen.
PA state tax should not have been withheld if Hubby worked in Phila all year.
You must file a nonresident PA state tax return to get that back, and then a NJ resident return.
NJ will give you at least partial credit for the Phila wage tax. depending upon the respective tax rates. Any other income that you had (such as investments) is still taxable for NJ.
I have a small withholding of Income Taxes for Philadelphia as the majority of my W-2 income is from New Jersey. Do I need to file any return in Pennsylvania or Philadelphia?
i’m in similiar situation. I have a w2 which shows box 15 (PA), box 19(local income tax)$1201,( box 18 local wages) 34896, and on box 20(locality)Philadelphia. I live in NJ and work in Philadelphia. I understand that i do not have to file a PA return but must for NJ. Now when i do my NJ return do i get that amount back as a credit when i add (other state taxes paid)? My gross income for NJ is above 34896
If your employer withheld the PA taxes, you must file a nonresident return for the state taxes. At this point, if you report the income on the PA NR return, you will get the credit on the NJ return, or you can file with zero PA income get the PA taxes refunded, but then pay on all the income in NJ. If you have not already done so, you must file a Form REV-419EX to stop the PA withholding.
Regardless, you do get the credit for the Philadelphia City tax on your NJ return.
See NJ Income Tax – PA/NJ Reciprocal Income Tax Agreement.
thanks for the reply. i’m a bit confused. My employer did not withhold any PA state just NJ state and Philadelphia local income tax. I thought i didn’t have to file with PA if i’m filing and reporting with NJ. Then i can claim the Philadelphia local income tax as a credit(under other state taxes paid) on my NJ return?
Sorry I must have been looking at a different post. Yes, you can claim Philadelphia Wage tax as credit.
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