I live in Ohio, and work in PA. My employer withheld Ohio taxes from what I see on my W2. I have a question on how to handle fill out the Pennsylvania Nonresident Return.

[haynest]

I live in Ohio, and work in PA. My employer withheld Ohio taxes from what I see on my W2.

I am on the State Taxes section, and I am on the Compensation Summary page for the Pennsylvania nonresident return. 

Currently, all three W-2's I have on the page have a State ID of OH. My W-2 is what I am confused on. I am not sure if I need to click the edit button for my W-2, and check the box that reads "Make this income taxable in PA. I do not think that I need to since I am an Ohio resident.

I think I am just getting confused with the instructions listed on the Compensation Summary. The third paragraph reads.

"If your compensation was not earned while a Pennsylvania resident or from Pennsylvania sources, you will need to edit the entry." So my answer to this would be, no, my compensation was not earned while I was a Pennslyvania resident. But, yes my compensation was earned from Pennsylvania sources.

The fourth paragraph reads. "If you were a resident of Indiana, Maryland, New Jersey, Ohio, Virginia or West Virginia (reciprocal wage states) and worked in Pennsylvania you may need to change the wages to zero to claim a refund." I am a resident of Ohio, but how do I know if I need to change the wages to zero and claim a refund? Where would I change the wages to zero?

Looking back at previous pay stubs, I see that my employer held back Social Security, Medicare, Federal Income Tax, Ohio, PA LST, PA Employee Unemp., and a Robinson Twp. line item. I am guessing I would get the PA LST, PA Employee Unemp, and the Robinson Twp back, but in TurboTax it currently says I am getting $0 back on my PA refund. In box 14 on my W2 I do see an item labeled PAEUC. Upon further Googling this is Pennsylvania Emergency Unemployment Compensation. I am not sure if I should get this back either.

I know I threw a lot out there. In summary, I want to know how to proceed on the Pennsylvania nonresident page, and if there are any additional documents I need to file that TurboTax is missing.

[TerryA · Accepted solution]

Ohio and PA are reciprocal states - they don't tax the wages of each others' residents. That's why your PA employer withheld OH taxes. So, unless you have other income from PA such as a rental income from property there, or a business there, you don't file a PA return at all.

To make the nonresident PA return go away, go back to Personal Info and in the screen Did You Make Money in Any Other States?, click the No button. Don't mention PA to TurboTax at all.

[Chexxmixx2120]

I didn’t know this and filed my income with PA although I shouldn’t have. How do I correct it? 

[MaryK4]

If you filed your PA as a nonresident and your OH as a resident, you do not have to amend at this point, but next year you can save yourself the trouble of filing two state tax returns by making sure your employer withholds the OH taxes.

@Chexxmixx2120

[mattb19849]

what would the inverse of this be: I live in PA and worked in Pa and Ohio, and the Ohio employer withheld Ohio taxes and not PA.

[IsabellaG]

You can file an Ohio IT 1040 to request a refund of the incorrect OH withholding.  After you enter your W-2 and finish your federal return, start the OH return. You will reach a screen Reciprocity Wages, and you will enter the Compensation that you earned in OH while you were a resident of PA. At that point, you will receive all of your withholding back as a refund. However, if there was no withholding for PA, you will owe tax to your resident state.