Taxes Paid in Another State

[martinigeo]

Hi,

I moved to North Carolina from Pennsylvania in 2022.  I resided full time in NC for ALL of 2023.  I work remotely for my PA employer for ALL of 2023.  My employer took PA taxes out for the beginning of 2023 then correctly took taxes out for NC the remainder of the year.  I am certain that I correctly entered the state tax info for both states and noted that the PA portion is taxable in NC.  Did this by NOT CHECKING the box "Make this income taxable in PA."  Everything looks good!  However, when I go to e-file, and select Transmit, it says "Check this Entry." Taxable inc earned in another state subject to tax should be greater than 0.  It displays a box to type in, but it will not accept any input.  I am using the desktop version.

[KrisD15]

Please do the returns in this order:

Federal

Non-resident PA (allocate zero income)

Full-Year Resident NC (allocate all income) 

It sounds like the program is trying to take a CREDIT on the NC return for taxes paid to another state, but you don't want to do that. You want to get the PA tax REFUNDED, not as a tax credit for NC. 

[martinigeo]

Thanks for the quick reply.  Thought that I did that.  In fact, it is showing that I will get a full refund of my taxes paid to PA.

[TomD8]

Juust to make you aware aware that Pennsylvania is one of a handful of states that have a "convenience of the employer" rule.  If the employer provides the employee with a physical workspace within PA, and the employer chooses for his own convenience to work remotely from a location outside PA, then that employee's income remains taxable by PA.  See this PA tax reference:

https://revenue-pa.custhelp.com/app/answers/detail/a_id/3597/kw/telecommuter/related/1

[martinigeo]

Thanks.  That is not the case.  I moved to NC...retired from this employer.  They chose to retain my services and offered me remote work.  I do not have a physical space in PA.