I live in NJ and worked in PA. I had no PA income tax withheld for 2020. But I did pay the City of Reading the 1% income tax imposed by that town for 2020. It was withheld from my pay and did appear on my 2020 W2.
That tax, paid to Reading, did not appear as a credit paid to other jurisdiction in my 2020 NJ return prepared by Turbo Tax. Why not? From what I read in NJ tax regulations, this is a proper credit that can be taken on the NJ return.
In the Turbo Tax detail of my W2 (boxes 18 -20), it lists that City of Reading tax payment as being “Associated” with NJ.
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states do not give credit for income taxes paid to local jurisdictions only taxes paid to other states on the same income'
Insofar as NJ, that is not correct.
For example, they give credit for the Phila Wage Tax.
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