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New Member
posted Mar 8, 2023 6:25:25 AM

Royalties in WV as PA resident

As a full-time PA resident, are oil and gas royalties earned from property in West Virginia taxable as income in both Pennsylvania and WV?

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1 Best answer
Level 15
Mar 8, 2023 7:02:35 AM

Taxable by both states:

By PA because PA residents are subject to PA income tax on all income, regardless of its source.

By WV because WV taxes non-residents on royalty payments derived from in-state natural resources.

 

You may claim a credit on your PA tax return for the taxes paid to WV on that income, so in effect you won't be double-taxed.  Be sure to prepare your state returns as described by @MayaD.

2 Replies
Expert Alumni
Mar 8, 2023 6:56:34 AM

Yes. You would file a non-resident West Virginia State Income tax return to report Royalty Income. 

The income is also reported on your resident PA return though you may qualify for a resident credit for tax paid to other states on income earned outside of Pennsylvania.

Pennsylvania residents are subject to Pennsylvania personal income tax on all Pennsylvania taxable income classes, both Pennsylvania and non-Pennsylvania source income. PA.gov

 

To ensure accurate calculations, always complete the non-resident return first.

How do I file a nonresident state return?

Level 15
Mar 8, 2023 7:02:35 AM

Taxable by both states:

By PA because PA residents are subject to PA income tax on all income, regardless of its source.

By WV because WV taxes non-residents on royalty payments derived from in-state natural resources.

 

You may claim a credit on your PA tax return for the taxes paid to WV on that income, so in effect you won't be double-taxed.  Be sure to prepare your state returns as described by @MayaD.