Pa & DE State Tax Issue (Double Taxation)

[melmorsh]

Hello,

My wife works in DE and Lives in PA.  She got 2 W2s.  One for DE and one for PA.  They are identical except for entries 15,16 and 17 (State info and state wages).  I entered the DE W2 then added the PA info to it (DE and PA).

This is what I did:

In the PA interview "Updated" the "Income and Adjustments" section.  I arrived  at a page titled "Compensation Summary." There are two lines with the same employer with one having DE as state ID and the other PA.  I Edited the DE line.  Marked the "Entire Amount as non-taxable in PA".

I then went to the "Taxes & Credits/Taxes paid to other state" screen.   What should I enter in the following screens:

Under Gross Compensation: Delaware Amount (I assume this should be  Wages, tips, other comp)
    My wife's Amount  (what should be in there?)

Under Tax Due to Delaware on income above: Delaware Amount  (What should be in there)     My wife's Amount  (What should be in there)

Also do I need to file taxes with PA and DE or only PA?

Thanks,

[MaryK4]

You do need to file the nonresident Delaware and resident Pennsylvania returns.  The Delaware amount is the amount you reported to Delaware so just under your wife's amount, the tax you paid to Delaware.  If you prepared your Delaware tax return first, TurboTax may have it pre-filled.  If not, you will have to enter after you complete the Delaware return.  

[NCperson]

@melmorsh you should complete both a DE non residential and a PA residential tax return. 

Once you complete the DE tax return, the PA tax return should automatically reflect any credit due in PA so that you are not being double taxed.  Start there and see if your questions are answered. 

[Liberty556]

I too, have the same situation as your wife does only a little different. Work in DE, live in PA. My company does not withhold PA income tax and only sends one W2 and only withholds for DE.

Yes, you do need/should to file in both states.

I typically file in DE on their website. Its free.

I use Turbo Tax +state to prepare my PA taxes and then mail them in because I paid DE income taxes (which is also higher than PA) You should file in DE first then PA will/should recognize the taxes your wife paid in DE.

Good luck

V