What if we own homes in two states and split our time equally between them? Do we have to pay taxes in both states when we only earned income in one state?

[MargaretL]

You must decide which state is your resident state and no, you don't have to pay income in both states because you can only be the resident of one state - unless you have income from a specific state. You should determine which state is your resident state - where your driver license is from, where you vote, a year has 365 days... so where you spend your time longer.  Once you do, please file that state as your resident state.  If you have income from your nonresident state, you may be required to file a Nonresident state. Otherwise, there is no reason to file a nonresident state; having a 2nd home in another state is not a taxable event.

[Cindy888]

Hi,

We have been PA residents with PA driver’s licenses for years. However, in 2019 we lived part time in our PA home and part time in VA and made money in both states. According to VA law, “Resident -- A person who lives in Virginia, or maintains a place of abode here, for more than 183 days during the year, or who is a legal (domiciliary) resident of the Commonwealth, is considered a Virginia resident for income tax purposes.” (https://www.tax.virginia.gov/residency-status) So for 2019, do we need to file PA tax as residents and VA tax as residents as well? Thank you very much!

[Hal_Al]

Why do you live in two states and how do you make money in each state?

The simple answer is: you file as resident of one state and a non-resident return for the other. You decide where you are a resident.

It is possible to have to file two  full year resident returns, but it's unusual and messy.  Part year resident returns are for a permanent move not a 2 home situation. 

PA and VA have a reciprocal agreement on wages. 

[Irene2805]

In general, how many days do you live and work in Virginia and how many days in PA?

As Hal_Al mentioned, VA and PA  do have a reciprocal agreement -- an agreement between two states that allows residents of one state to request exemption from tax withholding in the other (reciprocal) state. This can save you the trouble of having to file multiple state returns.

However, depending on the amount of time you spend in PA, you may be considered dual residents and subject to the North Eastern States Tax Officials Association Cooperative Agreement (NESTOA Agreement).

[TomD8]

@Irene2805  Unfortunately I believe Virginia is not party to the NESTOA agreement.  See "Dual Residency" in this web reference:  https://www.revenue.pa.gov/FormsandPublications/PAPersonalIncomeTaxGuide/Pages/Brief-Overview-Filing...

It sounds like the taxpayers are domiciliary residents of PA and statutory residents of the reciprocal state of VA, and must file as residents in each.  In that circumstance, special rules apply.  Those rules are detailed in this web reference:  

https://revenue-pa.custhelp.com/app/answers/detail/a_id/871/kw/dual%20residency%20pennsylvania%20and...

[Irene2805]

No - Since you only earned income in one state, consider that your resident state and file a resident return for only that state.  Your home in the other state is considered a "second home" and doesn't affect your residency status.

@carolynswingly