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glalata08
Level 2

PA State Tax Return

I live in PA, but work in DE. For some reason, when I started filing for my PA tax return, it said that I made double my income even though I only work in DE. My W-2 for PA has the almost the same state wages (box 17) as my W-2 in DE. It seems that both state W-2 are being accounted for in PA. How would I fix this issue when I file my PA tax? Should I put 0% allocation for my PA income since I didn't actually make money in PA? 

Also I my employer did not withhold my PA state, but withheld my DE taxes. So should that offset what I owe in PA?

8 Replies
DMarkM1
Expert Alumni

PA State Tax Return

Since PA and DE do not have a reciprocity agreement, you have to file in both states.  PA is your resident state so you must pay taxes on all income from all sources even if earned in DE.  For DE you only file for the income earned in DE as a nonresident.  You want to complete DE nonresident return first.  Take note of the taxes you owed to DE.  Then fill out out your resident PA return and you will claim a credit for the taxes paid to DE for the income that was double taxed by PA.  Here is a link that will help guide you.  

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glalata08
Level 2

PA State Tax Return

Thank you for your reply. So I was able to get tax credit from DE, however how do I fix the part for the W-2 since it is showing I made income in both PA and DE which made my actual income double? Even though I got tax credit from DE it is showing I still owe about $1800 to PA because it takes to account that I also made income in PA which I didn't. Should I put that the DE income is not taxable income in PA then? Because if I write that my PA income is non taxable then I get an error.

DMarkM1
Expert Alumni

PA State Tax Return

If everything is duplicated except the state tax boxes 15-17, then enter 1 W2 with all information, but only DE as the state.  PA will tax that income as PA resident. 

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glalata08
Level 2

PA State Tax Return

Okay but the site automatically pulls both state w-2 for PA which came from my federal. There is no button to delete the PA w-2 income. I can only edit and adjust the taxable income or put PA income is non taxable. If I put PA income is non-taxable then I get an error saying it has to be taxable since that is how much I apparently made in PA. So should I just put 0 income on my PA w-2 then even though there was an income on box 16 for my PA w-2?

DMarkM1
Expert Alumni

PA State Tax Return

I understand. 

 

1.  Just go back into the federal return under "income & expenses

2.  Edit/add the "Job W2" category. 

3.  Delete the extra W2

4.  Ensure the remaining W2 has all the correct information, but only includes DE in Box 15-17. 

4.  Wrap up income and that should correct.  

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glalata08
Level 2

PA State Tax Return

Thanks so much for your help!

glalata08
Level 2

PA State Tax Return

I'm so sorry for another question, so should I just delete it on the "state and local income tax" section of the federal W-2?

DMarkM1
Expert Alumni

PA State Tax Return

Yes, if you have one W2 with all the Federal information and includes lines for both PA and DE then delete the PA line in the W2 form entries.  

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