2857109
In 2021 I moved from MA to PA. I have RSUs that were granted when I lived in MA that are showing up as MA related income on my W2. My W2s in 2022 looks roughly like this:
Box 1 (Wages, tips, other comp): 200,000
Box 5 (Medicare wages and tips): 220,000
MA:
Box 16 (Stage wages, tips, etc): 30,000
Box 17 (State income tax): 1600
PA:
Box 16 (Stage wages, tips, etc): 221,000
Box 17 (State income tax): 5,700
Why would by PA 16 be higher than my box 1 and even 5?
Does the above imply the taxes I paid in MA were double taxed in PA?
Both TurboTax (and other software I used to double check) seem to be having problems with this and I don't understand enough about taxes to know what i'm doing wrong. When doing PA/MA taxes my wages are listed as 250,000. It points out there may be an issue because my federal wages are only 200,000. I guess the 250 is the two box 16s combined but I don't understand if that's really correct or not.
Is it correct? Is there something im clicking incorrectly at some point? Would love any advice.
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Yes. State residents are taxed on income earned everywhere, so your Massachusetts RSUs are taxed by Pennsylvania.
Additionally, since the RSUs were granted as a result of work done in MA, they are also taxed by the Bay State.
PA will give you a credit for tax paid to MA on the PA tax return. It is not full credit. PA has a flat tax rate of 3.07%. The MA rate on wages is 5%, so PA will give you credit for MA tax paid up to the 3.07%.
PA taxes 401(k) contributions, so PA wages are typically higher than federal.
Your PA state wages should be $221,000.
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