Multistate double tax amount calculation

[Scouse-s]

I live in DE and work in PA. My W2 shows different state wage in box 16.

For 2025, the number in box 1 matches the number in box 16 of DE portion. PA box 16 shows a higher amount than DE. 

In 2024, the number in Box 1 does not match box 16 of either DE or PA.

PA shows a higher amount on box 16 than DE in the W2 for both years. Other than the W2 age, I have some interest income that gets added to DE income.

• How should I calculate the double- taxed income in order to claim the credit on taxed paid to PA? Is it the minimum of box 1 , box 16 of PA and box 16 of DE W2? 

[DavidD66]

As a Delaware resident, 100% of your income is taxable by DE, regardless of where it is earned.  Because you work in Pennsylvania, your income earned in PA is taxable by PA.  To prevent double taxation, your resident state - DE will give you a credit for the tax you pay to another state.  In TurboTax, you should prepare your non-resident PA tax return first, then complete your DE tax return.  This is necessary so the credit will calculate properly on your DE return.  If you have already started or finished your DE return I suggest you delete it, complete your federal, then PA, and the start your DE return.

The credit DE gives you may not equal the amount of tax you pay to PA.  Each state has their own way of calculating a credit for tax paid to another state.

As for why the amounts in box 1 and box 16 on your W-2 don't match, I have no idea.  I recommend you ask the payroll or HR department at your company for an explanation.  

[Scouse-s]

Thank you for the reply. Is there a way to calculate the amount of income that got double taxed by both states based on W2 information ? I understand TT will calculate the credit I can get, but my question is related to figuring out how much of the income got double taxed. 

[CatinaT1 · Accepted solution]

In your specific case, your double-taxed income is the Delaware Box 16 amount, but you did get credit on your return for the tax paid to Pennsylvania.