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jstetson
New Member

I own a single member LLC in DE and live in PA. My comp is pass through sched C income. I have an annual filing for the LLC in DE. Do I need to file a DE return?

We have staff in DE who get paid as DE workers.  I only occasionally go to the facility to meet with staff.  I have an annual LLC filing in DE that is done separate from my taxes. 

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Accepted Solutions
DanielV01
Expert Alumni

I own a single member LLC in DE and live in PA. My comp is pass through sched C income. I have an annual filing for the LLC in DE. Do I need to file a DE return?

Probably.  It seems like at least some of the income is being generated in Delaware, and the LLC is registered in Delaware.  The income being earned in Delaware is Delaware sourced income and would be taxable to you as a nonresident.  If part of your Schedule C income is earned in Delaware and part in PA, you need to allocate the amount that is earned in Delaware.  This would be the receipts from Delaware divided by your overall receipts times your net Schedule C income.  You would report this amount to Delaware.

Pennsylvania also taxes this income, but will then give you a credit for the tax you pay to Delaware on income earned there.

If none of your company's work was earned inside of Delaware (even though the LLC is registered in Delaware), you would only have to file a PA return.  This would be so even if the workers are from Delaware and must have Delaware state taxes withheld.

The key is where the company provided the services.  Since you are a single-member disregarded entity, if the company works in Delaware, then you work in Delaware because the company's income is reported on your personal tax return on Schedule C.

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1 Reply
DanielV01
Expert Alumni

I own a single member LLC in DE and live in PA. My comp is pass through sched C income. I have an annual filing for the LLC in DE. Do I need to file a DE return?

Probably.  It seems like at least some of the income is being generated in Delaware, and the LLC is registered in Delaware.  The income being earned in Delaware is Delaware sourced income and would be taxable to you as a nonresident.  If part of your Schedule C income is earned in Delaware and part in PA, you need to allocate the amount that is earned in Delaware.  This would be the receipts from Delaware divided by your overall receipts times your net Schedule C income.  You would report this amount to Delaware.

Pennsylvania also taxes this income, but will then give you a credit for the tax you pay to Delaware on income earned there.

If none of your company's work was earned inside of Delaware (even though the LLC is registered in Delaware), you would only have to file a PA return.  This would be so even if the workers are from Delaware and must have Delaware state taxes withheld.

The key is where the company provided the services.  Since you are a single-member disregarded entity, if the company works in Delaware, then you work in Delaware because the company's income is reported on your personal tax return on Schedule C.

**Say "Thanks" by clicking the thumb icon in a post
**Mark the post that answers your question by clicking on "Mark as Best Answer"

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