Moved to Delaware from PA, worked full year in PA - State Income tax

[VisceralFat]

Hello,

I have been employed in PA for the entire year. In June, I moved to Delaware.

My understanding is that I will file a PA40 and a De 200-01. I expect to owe incremental tax in Delaware above my Pennsylvania rate, with 100% of the PA state withholding as a credit on the Delaware return.

What is the official determination of when residency switched over? Is it self reported based on first day actually sleeping there, or based on something like the effective date of handing in PA license for a Delaware license?

Also, for Delaware, will I owe the incremental tax only on the amount of income earned AFTER the move? How would this be determined if I moved in the middle of a pay period? My income is not static for the entire year, and I'm not sure if I am supposed to be tracing actual paystub earnings in each state based on the effective date of the move, or rather just taking a daycount proration of the total income for the year and allocating between the states that way.

Thank you  

[tagteam]

@Mike9241 

[Mike9241]

can't answer all your questions. Taxation is not based on residency but rather on domicle which can differ from residency.  at any one time a person can be regarded as a resident of more than one state maybe because they have a summer home or under some other rule. at any one tine a person can have only one domicile - which is that person's present permanent place at which they reside,

here's what PA says

Conditions Required to Establish a New Domicile
You can have only one domicile at any given time. Your domicile does not change until you move to another state or country with the sincere intention of making your “new” permanent home there and abandoning your previous domicile.

If an individual moved to another state or country, but intended to stay there only for a fixed or limited time (no matter how long), the domicile does not change. Once established in a locality or state, your domicile continues there until you establish a new domicile. It is not dependent upon continuous physical presence. It is not abandoned by absence or even by presence in a former domicile, no matter how long continued, if, in leaving and during the absence, there is no firm, sincere, unconditional intention of remaining in the other jurisdiction for an indefinite and uncertain period.

For example, temporary absence from a new domicile with presence in a former domicile for the purpose of transacting business or for the sake of health, pleasure, or education, with a definite intention of returning to the new domicile does not affect a person's domiciliary status. If a person left their domicile to seek new employment intending to remain in the other location only if they find employment, they did not change their domicile.

In order to establish a new domicile, the following three conditions must be met:
There must be evidence of a firm and definite present intention to discontinue making the former domicile your primary base of operations;
There must be evidence of a firm and definite present intention to make the new domicile your primary base of operations; and
There must be evidence of actual physical presence and actual abode (transient, temporary, or permanent) in the new location.
If all three requirements are met, the date of the change is the first day of actual physical presence in the new location.

for others to respond please clarify how you can be employed in PA the whole year but moved to D in June.  

[VisceralFat]

Thank you @Mike9241 . For practical purposes on domicile, is it the case that the individual determines the date themselves within the confines of reasonability?

In this case, I had an apartment lease in PA through June, closed on a house in April, moved my possessions in waves during that period, slept at both locations, etc. If there is no hard set line in the sand date beyond those criteria, it seems to me that as long as its a reasonable estimate of when Delaware became the "primary base of operations" that it's not going to be put under scrutiny, but let me know if I'm off base here.

As to your final question, I have had a Pennsylvania employer for years. I bought a house in Delaware but I'm not switching jobs. I commute a few times per week and work remotely the rest of the time, but 100% of my income is from employment in Pennsylvania, while I am now a resident of Delaware and have no residence in PA since June.

[Mike9241]

i failed to clarify that some states, Including PA,  have enacted telecommuting laws for income tax purposes. these have the effect if certain conditions are met,  of taxing all the wages of a person living in another state but working for a PA employer.  you may need help with a tax pro familiar with PA telecommuter laws. 

[TomD8]

You become a resident of Delaware for tax purposes on the day you begin living there with the intent of making it your permanent home.  Your residency is not determined by your drivers license or voters registration.  That's because some people wait months (or even years) after moving before getting their new license or registration.

PA can tax all the income you earn as a PA resident.  PA can also tax you after you move and become a DE resident on income you earn from physically working in PA, and on income from work you do remotely for a PA employer - if that work is done remotely for your own convenience.  This PA tax reference explains:

https://revenue-pa.custhelp.com/app/answers/detail/a_id/3599/~/how-are-telecommuters-wages-taxed-in-...

Once you become a DE resident, all your income becomes taxable by DE, regardless of where you earn it.

You may claim a credit on your DE tax return for the taxes you pay to PA on income that is also taxed by DE.  This protects you from double taxation.