Live in NJ and work in PA

[edr6339]

I have a full W-2 with Fed wages and NJ State Income tax. I have 2nd W-2 with only PA State Wages and Income tax filled in.  Just bought TurboTax PA State.  Its not clear what I have to do. Both states ran in the program but I am not sure how to answer the questions.

[KrisD15]

Assuming these are 2 different jobs-

If the first W-2 is for wages EARNED in NJ, and the second W-2 is for wages EARNED in PA, 

file a NON-resident PA return and claim the wages earned there. 

Next, file a RESIDENT return for NJ and claim ALL your income. You will get a credit on your NJ for the tax you pay to PA. 

Always do the non-resident return FIRST so the program knows what to enter for the credit on the resident return. 

IF BOTH W-2 are reporting the same job, please continue the question and provide more information. 

[edr6339]

Thank you.  BOTH W-2's are reporting the same job.  One has all the boxes complete including NJ State tax section and the other is completely blank except for PA State tax etc.  My instinct was to do the resident first.  Can this be reversed? Is it now a problem?  I don't know how to edit in the Compensation Summary section.

[KrisD15]

I assume you entered both W-2's on one screen as if it were one single W-2.

You will claim all the income for both states. 

PA taxes wages EARNED there and NJ taxes all the income of a resident. 

So it doesn't matter to PA that you don't live there and it doesn't matter to NJ that you didn't work there.

The tax you pay to PA will be a credit for the tax NJ charges so that you are not double-taxed. 

(it may not be a total wash if the tax rates are different, but it will be close) 

If you do the resident state first (NJ) the program won't know the tax charged on your PA return, so it won't know what to give you as a credit on your NJ return. 

You need to do the non-resident return first for TurboTax to compute both returns correctly. 

All compensation (on the W-2)  is reported for both state returns.

[edr6339]

Hi. Thank you for assuming I did correctly.  I did not.  I had two physical W2s and entered two W2s.  I will delete one and add PA to the state section of the NJ one. What if I already did NJ (resident) first. Which I did.  Can I undo the program confusion I caused?

[DianeW777]

Yes.  Go through the state interviews carefully and TurboTax will handle the necessary changes.

New Jersey (NJ) and Pennsylvania (PA) are reciprocal states.  PA Nonresident Filing Requirement with Reciprocal Agreement:

PA has reciprocal tax agreements with Indiana, Maryland, New Jersey, Ohio, Virginia and West Virginia. Under these agreements, one state will not tax a resident of the other state on compensation subject to employer withholding.

File your resident return claiming all of your worldwide income.

File a PA return ONLY if you have any state tax withholding for this state.  You will receive a full refund.

When you are in the Pennsylvania (PA) return you should see questions about reciprocal states and TurboTax may work this out for you.  You should receive a full refund from PA.

For the NJ  return, watch to be sure you are paying tax on all of your worldwide income for 2022.  As you go through each return check your results.  The PA state tax withholding will be 3.07% of your wages so it may be a lower tax rate than what you will owe to NJ.

[edr6339]

Thank you for helping me!

[edr6339]

Hi. I finished the steps and printed the forms.  Fed+NJ+PA.  I entered one W2 with 2 states.  At one point I checked a box that said do not include PA wages.  The PA filing form looks ok, its refunded all the PA tax and showing no wages.  However I am concerned about Gross Comp Worksheet (for my records).  Non-Pennsylvania W-2 to Schedule SP, line 6 is showing double the wages.

[TomD8]

As an aside, you should file PA Form REV-419 with your employer in order to declare exemption from PA withholding.  Here's a link to the form:

https://www.revenue.pa.gov/FormsandPublications/FormsforBusinesses/EmployerWithholding/Documents/rev...

[edr6339]

Thank you TomD8.  I am now aware of that.  I still need help with 2022.  If someone can tell me why the worksheet is showing double wages for PA.  I'm afraid I did something wrong.

[PattiF]

 I would like to take a deeper look at this. However, I need a diagnostic file which is a copy of your tax return that has all of your personal information removed. You can send one to us by following the  directions below: 

TurboTax Online:
 

1. Sign into your online account.
2. Locate the Tax Tools on the left-hand side of the screen. 
3. A drop-down will appear. Select Tools  
4. On the pop-up screen, click on “Share my file with agent.”
5. This will generate a message that a diagnostic file gets sanitized and transmitted to us.
6. Please provide the Token Number that was generated in the response here in Community.

TurboTax Desktop/Download Versions:

1. Open your return.
2. Click the Online tab in the black bar across the top of TurboTax and select “Send Tax File to Agent”
3. This will generate a message that a diagnostic copy will be created.  Click on OK and the tax file will be sanitized and transmitted to us.
4. Please provide the Token Number that was generated in the response here in Community.

@edr6339 

[edr6339]

Hi PattiF.  Thank you.  Since it was a worksheet for my records I did not send it. The PA return looked OK otherwise so I mailed it.  When I get to my home PC I would like to send you my file anyway if that's ok.  I suspect its a bug.

[DianeW777]

Yes, it's all right. You can send the file when you can.

[edr6339]

Hi. I have 2 questions with this file. 1) why did the Fed generate a Schedule 1 that is blank or zeros. 2) why does the PA worksheet show 2x the wages.  I have 2 physical W-2's for the same job. One was full with NJ info. Other was blank and only had PA info. At first I set up two W2s in TT. Then I was told to set up one W2 with 2 states.  Then I was told no, it should be two W2s in TT. Either way the worksheet showed 2x wages. Token # 1123288.  Thank you for checking. 

[Cynthiad66]

You can use one W-2 but do not duplicate the state income.  If the income is on the NJ return then do not show income for PA on the W-2.  Or vice versa.  This will eliminate the duplicate income..

@edr6339