I moved to the UK in 2020 and had been living in PA until October 2020. I then had a bonus paid in January 2021 for work done in 2020. Do I need to file PA state return?

[jschankel-gmail-]

My employer is based in DE and only withheld DE state taxes from my bonus check. They also withheld Philadelphia city tax as I had lived in Philly while in PA. 

I tried to file in turbo tax for PA but it won’t let me file as a nonresident. To qualify as a resident, I need to enter 2021 dates I lived in PA, but this does not apply. How do I work around this?

[SweetieJean]

You might go this route instead:

Wage Tax refunds | Services | City of Philadelphia

[Hal_Al]

Try this: In the personal info section indicate that you were a PA resident for 2021.  Later, in the PA section of TurboTax (TT), change your residency status to non resident.

But, another question is: What is your actual residency for state tax purposes?  You are probably still a PA resident. Here are some references on that topic:

https://ttlc.intuit.com/community/state-taxes/discussion/re-il-state-taxes-living-in-spain/01/237630...

https://ttlc.intuit.com/community/state-taxes/discussion/re-do-expats-need-to-file-state-returns-if-...

https://ttlc.intuit.com/community/state-taxes/discussion/what-is-my-state-of-residence-if-i-don-t-li...

[jschankel-gmail-]

Thanks @SweetieJean , I don’t think I qualify for this but will check out the link.

[jschankel-gmail-]

Thanks @Hal_Al- I’ll see if that workaround helps. PA isn’t a “sticky state “, so that’s good. I don’t think I’m a resident of PA now since I don’t live there for any portion of the year and am on a permanent work assignment in the UK.

[TomD8]

To throw another wrench into the works:  if that bonus was earned from a Delaware source, it is taxable by Delaware - even if you worked remotely from a PA location.  Delaware is one of the few states that taxes non-resident remote workers.

If you received it after changing your domicile to the UK, it would not be taxable by PA.  A bonus received after a move to a new domicile is taxed by the state where earned and the state where received.

However, if you did not change your domicile and are still considered to be a PA resident, the bonus would be taxable by both DE and PA.

You'll find PA's detailed rules on domicile and residency here:

Brochure: Determining Residency for PA Personal Income Tax Purposes (REV-611)

[jschankel-gmail-]

Thanks @TomD8. I know I’m still US domicile even though I’m UK resident, but I don’t believe I have domicile in PA based on the fact that my permanent home is in the UK and I have no intention to return to PA.

My concern about filling as a PA nonresident is that then I wouldn’t get credit for the tax I paid to DE. Do you know if that’s true?

[TomD8 · Accepted solution]

@jschankel-gmail- —

Actually, if you have no intent to return to PA, and you now reside in and intend to permanently remain in the UK, IMO you are no longer a PA domiciliary.

PA law does say that a nonresident cannot claim an “other state credit”, but since you earned the bonus while a PA resident and the bonus is taxed by both PA and DE, it seems that in fairness you should be able to claim the credit.

Like you, I don’t see how to claim the credit on a non-resident PA return.  You’ll have to contact the PA Dept of Revenue for help.

Btw, for 2021 in TurboTax, you should choose “Foreign or U.S. Possession” as your “State of Residence,” since you abandoned your PA domicile in 2020.