Multiple States

[Scampnbel01]

I live in NJ but worked in PA for most of 2021 so I have to file NJ and PA. When I started my PA state filing, Turbo tax asked me if the state ID in box 15 said PA and it does not. It says NJ based on where I live. How do I report the PA wages for the state if my W-2 is not reflecting the correct state?

[rjs]

New Jersey and Pennsylvania have a reciprocal agreement. Under the reciprocal agreement, you only pay tax in the state that you live in. You do not have any Pennsylvania wages, and you do not file a Pennsylvania tax return.

See the following FAQ.

What is a state reciprocal agreement?

[FangxiaL]

There is a reciprocal agreement between PA and NJ. If there is no PA state income tax withheld on your W-2 form, you do not need to file a PA return. Just file your federal and NJ returns.

[Scampnbel01]

Then I am in trouble because I owe over $4k because my employer did not withhold enough? I would have thought  that they would have used the correct percentage.

[JillS56]

I would suggest that you contact your employer and ask them to adjust your state withholdings.   There are a couple of ways to handle this.   

One, if you know what the tax rate is you can ask them to withhold that percentage for each pay period.    

Or take the amount of tax you owe for this year and divide it by the number of remaining tax periods and ask that they withhold an additional amount for the state for the remainder of the year.   For instance, if you are paid weekly there are 33 pay periods remaining for 2022.  Take the amount owed of $4,000 and divide by 33 and that is the amount of additional tax to withhold per pay period for the remainder of the year ($121 per pay period).  For a biweekly payroll, there would be 19 pay periods remaining which would be about $210 per pay period.