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Returning Member
posted Feb 22, 2022 5:54:50 PM

PA state tax

Hi I am a full year resident of PA and collected some unemployment from NY. I did the NY non resident return and was taxed on my investment income. I am filling my PA return and they are also taxing my same investment income. Is there a way to get a credit from PA on this investment 

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3 Replies
Expert Alumni
Feb 22, 2022 6:14:57 PM

Investment income is generally not taxable to nonresidents unless it is related to employee stock. NY unemployment received by a nonresident is taxable to NY.

 

If your investments are taxable to NY you can claim a credit on your PA return. Go to Credit for taxes paid to other states.

 

PA does not tax unemployment so you can't claim a credit for tax paid on unemployment. You'll have to manually adjust the numbers. For example, if your NY income was $10,000 and $8,000 was unemployment and $2,000 was investment income, then you would report $2,000 as income to PA for the tax  credit and 20% of the NY tax based on the income percentage ($2,000/$10,000).

 

Learn more: New York State Tax Treatment of Stock Options, Restricted Stock, andStock Appreciation Rights Received by Nonresidents and Part-Year Residents

Returning Member
Feb 25, 2022 5:00:39 AM

Yes this was helpful. Do I take the credit on the income or the tax? I think it’s the income 

Expert Alumni
Feb 25, 2022 5:14:17 AM

You take credit for the tax paid in a nonresident state. Here is how the 'other state tax credit' works:

 

The credit for tax paid to another state on the same income will be the lesser of:

  1. the tax liability actually charged by the nonresident state, OR
  2. the tax liability that would have been charged by your resident state

If you don't have tax in the other state, then there is not going to be a credit for that state on your resident state return.