Working in a different state

Forum|Forum|6 years ago
September 14, 2019
2 replies
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Hi, I just started working in a company located in PA but I live in MD, I’m working from home. I just received my first paycheck and they are taking my federal taxes, PA state taxes and Lower Merion TWS taxes, what’s going to happen with my Maryland taxes and Montgomery County taxes??? Am I going to have to pay them too??

Critter

Level 15

Your employer should have talked to you about this already ... a form REV-419 should have been filled out ... talk to the employer asap to get this corrected quickly...

https://ttlc.intuit.com/community/state-taxes/help/which-states-have-reciprocal-agreements/00/25576

TomD8

Alumni - Champ

ALL your income is taxable by your home state of MD. Submitting Form REV-419 to your PA employer as described by @Critter should cause them to cease withholding PA taxes (and hopefully to start withholding MD taxes).

If no MD taxes have been withheld for you this year, and/or if your employer cannot or will not withhold MD taxes, you should consider making quarterly estimated tax payments to MD. Here's a link to MD's page on estimated taxes: https://taxes.marylandtaxes.gov/Individual_Taxes/Individual_Tax_Types/Income_Tax/Payment_Information/Estimated_Tax_Payments/

**Answers are correct to the best of my ability but do not constitute tax or legal advice.

Hal_Al

Level 15

The answers provided by Critter and TomD8 are basically & usually correct.

But PA has a special rule on out-of-state telecommuters. So, don't be surprised if your employer says he can't change it. If you work outside the state as a job requirement, you are only subject to PA State income tax on the days you work in PA. But if you work outside PA for your own convenience, you are subject to PA State & local income (Lower Merion TWS) tax on all your PA income. New York, Nebraska, Delaware and New Jersey have the same rule. For guidance see: http://www.journalofaccountancy.com/issues/2009/jun/20091371.html

If your are subject to PA taxes, you still have to file the income on your MD return, but MD will give you a credit for what you pay PA