Hello. When filling out taxes doing our PA state form it had us go through for the special forgiveness credit. Keeping all numbers as TurboTax had them we qualified. However it's asking for documents bc it autochecks the income earned in another state. We moved from PA to TX but all income in pa was earned in pa, same with TX. I'm not sure what the correct situation is for this. Just send all the documents in to be safe?
Pennsylvania taxes only income earned while you were a resident of PA. However, for the Schedule SP credit, Pennsylvania considers your total income, which is why there’s a place for income earned while not a resident of Pennsylvania.
Double-check your entries and send any documents TurboTax asks you to send.
Thanks! So just to be clear, I should label all our income earned in TX then? Because we averaged about 65k this year combined. Around 10k of that in PA. So pretty much just send in all w-2s with the state return?
It also only generated like 7500 in the section that stated income earned outside the state of PA when filling out the form to see if we qualify. Which confused me as well.
Based on what you stated above, you will not qualify for Pennsylvania Special Provisions at first glance. Special Provisions has a graduating scale based on the number of dependent children in the household. Your 65K means that to qualify for SP you would have to have had 5 dependent children if married filing jointly just for the minimum forgiveness. If that this is not the case, there would be no need to enclose your W-2's as you do not appear to qualify. The chart below shows the eligibility level for married taxpayers:
It may be during the entry of all income that you did not enter in the area necessary the Pennsylvania non-taxable income, which would include income earned while not a resident of PA.
There are some exceptions to the rule, retirement income being one of them, but for the small period of residency I do not believe you qualify for Special Provisions and you should consider checking the Pennsylvania entry area of your return in addition to what you list as income on the Federal side that applies to Pennsylvania.
PA Special Provisions Instructions
PA Schedule SP Eligibility Income Tables
@JosephS1 in your second picture, TurboTax imputed around 7500. Not the full amount of, around 55k, made in TX while living in texas. So I would increase that number?
If your other income while a non-resident did not get entered correctly you should enter what you know should be in the other income section. The instructions I sent with the above initial answer for PA Special Provisions does have some exclusions. Not knowing your exact entries for your return I am not able to determine if you qualify for any of the exclusions. They mostly pertain to retirement income. But like I said at the beginning, based on your 65K income you mentioned, it is unlikely you qualify for Special Provisions.
If your other income while a non-resident did not get transferred in correctly you should enter what you know should be in the other income section. The instructions I sent with the above initial answer for PA Special Provisions does have some exclusions. Not knowing your exact entries for your return I am not able to determine if you qualify for any of the exclusions. The exclusions mostly pertain to retirement income. But like I said at the beginning, based on your 65K income you mentioned, it is unlikely you qualify for Special Provisions.
@JosephS1 we have 1099-r forms for early distribution but that's not included in the 65k. And the 1099-k's were in PA so already counted towards those taxes
Since you are filing a part year return, if you want to be extra safe- then send all w2 forms for PA can see that you had earnings in TX. PA is also interested in the amount of tax paid to PA.
A rollover would not have any tax paid, nor taxable income so PA would not be interested in them. However, early distributions would be taxable and PA would be interested.
Think "what does PA need to prove this income and tax paid?"