I moved from WV to PA in April 2023, and have income from both states...

[jwarnerstep]

I moved from WV to PA in April 2023 and have income from both states. I am filing part-year residency for both states, and I have income earned in WV while solely a resident of WV, income earned in WV while a WV resident and also as a PA resident, and income earned in PA while solely a PA resident. Under "Any special Pennsylvania W-2 situations?", the box next to "You earned income in another state is checked", but "You were a resident of a reciprocal state and your employer withheld PA income tax." is NOT. Is that correct? (The WV jobs only withheld WV tax and the PA job only withheld PA tax)

Additionally, once I move to the next screen it prompts me to "Prepare W-2 Additional Information Statement - You must send in Forms W-2 with your PA tax return. Be sure to explain any of the circumstances listed on the previous screen."  Do I actually have to send in W-2's? Any insight as to how to move forward?

Any insight is greatly appreciated!

[DianeW777]

You are correct to file a part year resident for each state.  These two states, Pennsylvania (PA) and West Virginia (WV), are reciprocal states.

Reciprocity:

A reciprocal agreement, also called reciprocity, is an agreement between two states that allows residents of one state to request exemption from tax withholding in the other (reciprocal) state. This can save you the trouble of having to file multiple state returns in the future as full time resident.

1. You will file the WV return and report only the income earned while you were a resident there. You will include all WV state tax withheld by your employer as indicated on your W-2. (if necessary you can put the correct wages for each state in the federal W-2 entry).
2. You will file the PA return and report only the income earned while you were a resident of PA.  Since your employer in WV did not hold PA tax while you were a PA resident you should still answer Yes to the question '...our employer withheld PA income tax."  Is that correct?'  This keeps the understanding clear in TurboTax even if there is no PA withholding.  We want to be sure the reciprocal status is understood.
3. Do not mail your W-2s in to PA, it's unlikely they will request them but if they do, you can always mail them later.
4. If you need to write a statement, simply put you can write 'Reciprocity'.

Please update here if you have any additional questions.

[jwarnerstep]

Thank you for the excellent information! However, I do have additional questions....when completing the PA state filing docs, the page that says "Any special Pennsylvania W-2 situations?", there are 2 options that apply, "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.". Do I select both of these? There is also a third option that states "You were a resident of a reciprocal state and your employer withheld PA income tax." but I don't believe this applies since while I was a resident of PA and had employment in WV, they did not withhold PA tax. If I select the first two, it then prompts me to prepare and send w-2's, and also add a statement if I choose, but I have noted what you mentioned before. Thank you again for the insight!

[DMarkM1]

No, don't check any of those. Since your two states are reciprocity states all your income/withholding was attributed to/done by the resident states.  

The first two options are for non-reciprocal states and therefore do not apply.   The third option, would be if you were resident in WV, a reciprocal state, all year (and never was a PA resident) and PA taxes were withheld.  This does not apply since at some point you were resident of PA and Pa taxes were correctly withheld.       

[jwarnerstep]

Thank you for the information. If I follow the direction of not selecting any of the boxes and continuing through the rest of the PA state information, when I go back to look it over, the box that states "You earned income in another state." has been automatically selected. To further explain my income, I lived in WV from 1/1/23 until 4/23/23, and worked at two WV based jobs. In April I moved from WV to PA, and started a new job in PA while ALSO working one job in WV. The WV employer only withheld WV taxes and the PA employer only withheld PA taxes. I am filing part-year resident taxes for both WV and PA. This is the first time I've had to file state taxes for 2 different states and want to make sure I do so correctly. It just gets confusing when it comes to the choices I outlined in my previous message. I look forward to hearing back from you @DMarkM1 @DianeW777 

[DMarkM1]

Understand.   It appears one of your employer W2s indicates that you lived in WV for the entire time you worked there when in reality you did not.  You had a period in which you were resident in PA but taxes were incorrectly, per the reciprocity agreement, withheld for WV by an employer.  So that W2 indicates you did have income from another state while living in PA. 

However, since that state is a reciprocity state you will need to get a refund from WV and pay PA for that income taxation. There will not be any credit for taxes paid to another state on either state return.  If you entered information in your PA return in the "Taxes and Credits" section you will need to "Start/Update" that section and "Delete" zero any entries there.   

Since you are not taking income/taxes away from PA you should not need to send in any W2s to PA.     

First, in the "My Info" section "Edit" your information and be sure you have indicated your state of residence on Dec 31st was PA and "Yes" you lived in another state (WV) and continue.  Then, still in the "My Info" section, scroll down to "Other State Income" and answer "No" you did not have income from another state.  This is because you will allocate on part-year returns and not a non-resident return.     

Next, check for proper allocation entries. You should allocate part of the WV employer wages to PA for the time you worked in WV but were resident in PA. 

1. Enter the form W2 information in the federal interview per your form W2; specifically the state line for the WV employer that did not withhold for PA
2. Continue to Done with W2s
3. Edit your PA interview
4. Continue
5. Start/Update the "Income/adjustments"
6. Edit the Employer that only had WV withholding but needs to allocate to PA
7. If you have not allocated the entire wage amount will show as non-taxable to PA 
8. Select the option "Make it taxable" >Continue>Edit the employer again>I need to make an adjustment>allocate amount that belongs to PA
9. If you have already allocated verify the amount and select "I need to make an adjustment" 
10. Verify>Continue>Done
11. Finish the PA income interview
12. Check summary for correct wages for PA

In the WV interview you should allocate to WV only the part of that employer wages for the time you lived in WV.

1. Edit WV interview
2. Start/Update the "General" section 
3. You'll eventually arrive at the "Allocation" pages
4. Allocate Wages/Salaries to "WV while resident" that is less the amount you allocated to PA and zero in the "WV while non-resident" box

Also, if you haven't already, you need to have that WV employer stop withholding for WV and withhold for PA per the reciprocity agreement.

[TomD8]

File West Virginia Form WV IT-104 with your employer to stop the WV withholding.  Here's a link to that form:

https://tax.wv.gov/Documents/Withholding/it104.pdf

[jwarnerstep]

@DMarkM1 Thank you very much for that clear explanation! It looks like that got everything fixed up. I do have one additional question, upon review of my PA state filing, I got an error regarding Underpayment Penalty. It was asking me to enter the date in which I will pay my PA state tax, but I also have the option of selecting "I didn't file a Pennsylvania tax return last year", but I still have a $10 penalty. I then entered $0 for 2022 Taxable Income, 2022 Tax Liability, 2022 Tax Forgiveness Credit, since they each referenced a PA form and it was under the PA state filing and I wasn't a resident here last year and didn't have PA taxable income. This eliminated the $10 penalty, but I wanted to verify that this is indeed correct. Thanks!

[DMarkM1]

Yes, that is correct.  If you did not file in PA for 2022, then zero for PA income and taxes for 2022 is correct.