Hi , I have a question related to 'Credit for Tax Paid to Another State'. I lived in PA for 8 months in 2018 while i work in DE.

[mohd-muzeeb08]

Am i eligible to this tax credit ?

[DanielV01 · Accepted solution]

Yes, you can, provided that your Pennsylvania tax on that income is greater than zero.  For the portion of the year you were a Pennsylvania resident, all of your income is taxed in Pennsylvania regardless of where you earned it.  You are also taxed in Delaware on any income you earned there, regardless of where you were living at the time.  To offset this double-taxation, your resident state (Pennsylvania) will give you a credit for the tax you must pay to the nonresident state (Delaware) on the income you earned there.  However, the credit will never be greater than the amount of tax that your resident state assesses on that income.

One other point is that if you were a part-year resident of Pennsylvania, this credit will only apply to the portion of the year that you lived in PA.  It will not apply to the portion of the year that you lived in another state.  If that other state was Delaware, only Delaware taxes that portion of your income.

{Edited 16:19 1/26/2019}

[mohd-muzeeb08]

Okay thanks for clarification. Can you please help me entering the two columns mentioned in the 'Credit for Tax Paid to Another State'. I see there are two columns first column Delaware 'Gross Compensation' second column [XXX] Amount.  where do i find these two details ?

[DanielV01]

The PA state programming requires this.  Because of the part-year status, this could be a little tricky.  It may well be that the entire year's income is being reported.  If that is the case, you may need to enter the amount actually earned after moving to Delaware.  However, if what is reported already shows that amount, then it will not be necessary to make any adjustments if the two amounts are the same.  Hope this helps.

[treleawa]

i know pa is supposed to credit for ny state taxes on income but program is not automatically applying the credit how do i do that?

[TomD8]

@treleawa --  Assuming you're a PA resident that worked in NY, you are entitled to a credit on your PA return for the taxes paid to NY.  In order for TT to calculate the credit correctly, you must complete your NY non-resident return first, before you do your home state PA return.

[MarquezMBACPA]

and if you didn't enter the non-resident return first? how then can we calculate the amounts needed to enter into the 2 columns listed here? I already tried deleting both state tax returns and re-entering them in the correct order.. the columns are still showing blank with no figures auto-populating...any guidance is appreciated.

[DanielV01]

@MarquezMBACPA  You can use this following formula.  If you don't get the income and tax pre-populated, then, in the PA tax credit section, enter the NY income in the first box, and for the NY tax paid, enter the amount of tax withheld, and subtract the amount of tax refund or add the amount of additional tax owed.