MD and PA part year resident

[jahmelch]

I currently work and live in Pennsylvania. However, when I started working for my employer in Pennsylvania, I lived for in Maryland.  My W2 has taxes and wages reported for both Maryland and PA and I will be filing part year resident returns for both.  However, I am having a difficult time reconciling the two state wages (box 16) with my Box 1.  There is a considerable increase when I add both 16s.  I heard that PA taxes on retirement deductions which are subtracted from Federal Box 1, and that is why they won’t be the same, but even accounting for this, nothing adds up.

Any thoughts?  Was I double taxed?

Thanks

[KrisD15]

Pre-tax retirement contributions are not taxable on federal or state returns. 

Maryland and Pennsylvania have a reciprocal agreement.  That means you only pay tax to the state in which you live for the income earned in either state. 

You will need to allocate what you earned while living in Maryland to the Maryland return, and what you earned while living in Pennsylvania to your Pennsylvania return. 

I assume payroll continued to withhold Maryland taxes when you moved to Pennsylvania, so they may have reported your state earnings to match what they withheld, but that doesn't really matter. What matters is how YOU report your income on your state returns. As long at the state taxes you PAID are correctly reported on your W-2, the earnings don't need to add up to Box 1 (federal wages) 

The amount you allocate between the two state returns SHOULD add up to Box 1 on your W-2. 

If you now work and live in the same state, you needn't worry about allocating income on next year's return. 

Reciprocal States