Moved from NY, work in PA and live in DE

[Scouse-s]

As the title said, I moved from NY to DE in May 2024. I am filing a part year resident tax return for NY, a non-resident return for PA and a non-resident return for DE ( even though I live in DE but as a part-year resident, the software is giving me options to file either as a resident or non-resident). As part of the non-resident return for DE, can I claim credit for the taxes paid to PA. My company issued two w2's showing separate wages and withholding for both DE and PA. If I am allowed to claim the credit, where does TT show AGI for PA income, PA income while a resident of DE (should it be 0 since I am filing a non-resident return)? 

[LeticiaF1]

Delaware allows part-year residents to file either a resident or nonresident return.  Per the Delaware Individual Income Tax Return Instructions, you can choose to file the one that is most advantageous for you. Filing a resident return is better if you had no income from other states during the time you weren't a resident. 

Filing a nonresident return is more advantageous if, during the period of non-residency, you had any income from other states or sources outside of Delaware. You will still be able to claim a credit for taxes paid to Pennsylvania while you were a resident of Delaware.  

In the question that asks for PA income, you should enter the amount of money you made in Pennsylvania while you lived in Delaware.  

Delaware Individual Income Tax Return Nonresident and Instructions

[Scouse-s]

If I understand correctly, you are saying that I should be able to claim credit for taxes paid to PA in DE tax return even if I file a non-resident tax return in DE. Is that right ? 

1. If yes, where do I get information for AGI for PA, PA income while being a resident of DE etc. 

2. The other issue is that I tried the option of filing as a resident of DE. Even after applying PA credit ( which TT does automatically), I am owing to DE. However, if I file as non-resident return for DE, I get money back even without claiming any credit for taxes paid to PA. I had income from NY when I wasn't residing in DE. 

[AmyC · Accepted solution]

1. Your DE return will use all income to calculate your tax liability- it is prorated. Since the nonresident form is also a part-year nonresident, you will enter your dates of residency. Once you enter those dates, the program will allow for you to claim PA credit on the same income. If you select full year nonresident, no credit is available.

2. To locate the taxable income and liability:

1. Log into your return
2. Select state taxes
3. Enter the non-resident PA 
4. On the left, go to Tax Tools
5. Select Tools
6. Select View Tax Summary
7. You will see Summary of your PA Return at the top.
8. Locate the line that says Taxable Income
9. Locate the line that says Total Tax
10. Note those numbers
11. Return to your DE return and enter that number where it asks for the income/ liability for PA
12. Some states tax income the federal does not. For example: NJ taxes money you set aside in your retirement plan. Each state has different rules to determine taxable income.

3. DE resident: 

When you selected DE as a resident, it took all of your income. I would bet that your income was being doubled on the tax return, you said w2 showed PA and DE wages. All of it would come into DE resident return. You would need to adjust DE wages to zero but still show tax withheld.

DE nonresident:

Did you enter DE income and was it showing on your tax return?

You need to be looking at your actual tax forms to see how everything interacts. You want to look at all worksheets as well. Choose to see everything, not just forms.

To print or view  your forms:

• In desktop, switch to Forms Mode. 
• For online:
  1. On the left side, select  Tax Tools
  2. Select Print center
  3. Select Print, save or preview this year's return
  4. If you have not paid, select pay now.

[Scouse-s]

For the DE non-resident portion, yes I entered the Delaware wages. I was under the impression I can't claim credit for taxes paid to PA if I file a non-resident return of Delaware. The confusion comes from the following lines in the Delaware state resident tax instructions:   f you are a resident of Delaware (or elect to be taxed as one) and pay

income taxes to another State on income earned in the other State which

is also included in your Delaware taxable income, the law allows you a tax

credit against your Delaware income tax.

[AmyC]

I agree the wording is awful which is why I have notes: 

Part year nonresident - program allows credit for other state tax paid

Full year nonresident - no other state credit allowed

You are a part-year nonresident, so as long as you select your dates of residency, you can take a credit.

The end goal is to pay the right taxes to the right location. You are doing great!