Remote work and state taxes

[magusbeeb]

Hello, I have a general question about filing state taxes. I lived in Indiana from January - April for the 2020 tax year, and then I moved back to Pennsylvania for the remainder of the year. I kept my job in Indiana (and had some, but not all state tax deducted from my pay) from January - August. Is the income that I earned from this job while in Pennsylvania taxed in both states? Is there a deduction for being taxed in two states? Is there anything else that I need to know? Thanks in advance.

[TomD8]

"...I moved back to Pennsylvania..."

Were you in Indiana temporarily from January to April, while your domicile (your main, primary home) was still in in PA - or was your domicile in Indiana prior to your April move?

[magusbeeb]

I was technically in Indiana further back than January (4 years for school), but I omitted it because I wasn’t sure if it was relevant, hopefully this doesn’t chang things. My permanent home is in Pennsylvania, I was just renting an apartment in Indiana.

[TomD8 · Accepted solution]

Indiana and Pennsylvania have tax reciprocity for W-2 wages and salaries.   That means that PA residents are not liable for IN income tax on W-2 income earned in IN.  But that income is 100% taxable by their home state of PA.

If your domicile or permanent home is in PA, and if you were in IN on a temporary basis in order to attend school, then you continued to be a PA resident for tax purposes.

PA residents who work in IN should submit Indiana form WH-47 to their IN employer.  That form can be downloaded here:

https://www.in.gov/dor/tax-forms/withholding-tax-forms/

[magusbeeb]

Thanks for clarifying this, this really helps!