If I live in Pennsylvania but work in the District of Columbia, do I have to claim that income on my PA state tax return?

[TomD8 · Accepted solution]

Yes.  Your state of residence can tax you on all your earnings, regardless of where earned.  Because of tax reciprocity, you do not have to file a DC return.  But your DC earnings are fully taxable by PA.

If your employer mistakenly withheld DC taxes, submit DC Form D40-B to obtain a refund.  You can find a link to that form on this web page:  http://otr.cfo.dc.gov/node/424492

[dariobernardini1]

If that's the case, then why didn't the TurboTax PA state program include the income on my state return?

[TomD8]

(I'm assuming you were a resident of PA for all of 2015, and that DC was your only out-of-state income source.)  
In order to make TurboTax work properly when you work in a reciprocal state, you must answer No in the TT Personal Info section to the question about earning income in another state.  That's because, due to reciprocity, the wages you earned in DC are - for tax purposes - considered PA income.
DC has reciprocity with every state.  If you work in DC and are a resident of any other state, you do not have to pay DC income tax on your wages.  But those same wages ARE taxable in your home state.

[mabecnel]

I do answer No to that question and my D.C. wages are still not showing up on my PA taxes.  My employer does not take out any PA taxes and I think that may be the issue.

[TomD8]

-answer deleted-

[DianeW777]

You may be right, but as a full year resident of Pennsylvania (PA) all income should flow to your PA return. Be sure in your W-2, that you add another state for PA, enter the total wages for PA with zero withholding. Keep the DC state line if you have any withholding in DC.