Pennsylvania tax questions -

[MyName]

I am a  part-year PA resident.  I moved from NJ to PA the very end of October 2019.  So about 2 months in PA.

1.  I am getting a penalty for underpayment of taxes.  I was so busy moving, my thoughts were not on tax payment.   Is there a way to avoid the penalty for someone very new here?

2.  Is this right?  For form 1099-R (pension and RMD), the TT PA form has the full amounts.   I had understood that PA taxes no retirement income.  For the pensions I selected the PA Distribution Type, I13 "I'm eligible; plan is eligible (no PA tax)".  The RMD is "J1 Traditional or Roth IRA, over 59.5" Are these right?

3.  Dividends - TT PA form does not ask what portion is for PA (NJ does).  I've only been here 2 months.  There is  also an instruction "Check this box for each line item that represents a PA tax-exempt dividend".  But TT fills in nothing, and one (tax exempt interest) is a mix of NJ and PA tax exempt muni bond funds.  So it is getting fully taxed for the entire year for PA incorrectly.   I had the NJ funds when in NJ, sold them and when in PA for 2 months have the PA funds. What can I do in TT?

[DavidS127 · Accepted solution]

The first thing to do is get your PA taxable income to calculated correctly on your part-year resident return. After the return is correct, you may not have an underpayment penalty.

1. As long as you have reached retirement age, the pension and RMD are not taxable by PA.  Check your entries in for the 1099-Rs and the PA state tax return questions.  The 1099-R boxes in TurboTax should "match" those on the actual 1099-R.
2. For your dividends and taxable interest, there will be a question in the PA part-year resident return to report how much of your dividends were received while living in PA.  You will need to manually calculate and enter the correct number.
3. For the tax-exempt interest, there will be some provision in the state question to report this as taxable.  When you get to that section of the PA return, exclude any PA tax-exempt interest from the "PA amount" you report.

[MyName]

THANK YOU.  I had not seen the text to adjust the income for state portion.  That solved all my problems.  Only owe $2.   Still sorry PA does not have deductions like Medical.  Next year I'll get hit as a full time resident.

[vesperm]

i understand that my pension is not subject to state tax; however, i don't see on your program where this is stated or asked.  Also, on the form it says enter and X if not subject to tax, but unclear where this x is entered.

please help.  thanks, Marie V

[MyName]

In the state tax entries, for PA.   Go to the Income and Adjustments section.   You will scroll through a page for each retirement income form you entered in the federal tax area.   For each, it will ask what kind of retirement income do you have from Pennsylvania?   It will display the name of the brokerage  company (or whatever provider).    There is a selection box to select State Type Code.   For pension, I chose the code "I'm eligible; plan's eligible (no PA tax).  You will scroll through each retirement income received until you are done.

[mwalsh]

David

I am assist my elderly ( retired) mom who permanently moved from PA to Texas in the second half of 2021.

I am assuming she is only liable for dividends and capital gains that occurred while she still was a resident of PA during the first half of 2021?

If that assumption is correct:  I figured out which dividends and which capital gains occurred while she was a PA resident during the first half of 2021.

I have entered that  amount on the Adjust Federal Dividend income page on the PA Turbo tax edition.  There is a pull down menu for the type of adjustment: Nominee adjustment, ESOP adjustment and other adjustment.  No clue what that means and I have used each one and they all bump up her tax owed amount.  

Looking for some help!!

mwalsh

[DMarkM1]

On the PA dividend adjustment page the amount that goes in the box is the amount that belongs to the other state.  It is the adjustment amount not the adjusted amount.  You should select "Other adjustment" from the dropdown.  This will put the remainder of any taxable dividends/capital gain distributions on your PA 40 tax form.  

[mwalsh]

Thank you so much for the clarification!  Entered the right amount used other adjustment and all looks fine.