PA taxes while working in VA

Forum|Forum|7 years ago
April 1, 2019
1 reply
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Lived in PA income earned in PA plus VA, but <150 days in VA. Box 15 on W2 states VA with box 17 stating the amount of taxes withheld.

While filling out PA 40, want to verify that

1) the VA wages should have the NT/TXBL box 'x' and the PA income tax tax withheld from box 17 should be $0 (not the amount on the W2, as this was collected from VA, not PA, correct?)

2) this would create us to owe the $ to PA?

3) we would then fill out 763S VA non resident and receive a refund for that amount?

(i realize now that we should have filled out a VA4 form to not have VA withhold, but that wasn't done, so trying to verify that we are doing this correctly)

re2boys

Level 9

PA and VA have a reciprocal agreement such that VA agrees to not tax the wages of a PA resident.

Yes you need to fill out and file the form 763S to claim a full refund of VA taxes withheld from your wages.

All income is to be listed on your PA resident income tax return, including that earned in VA. Due to differences is state laws regarding state taxable income, do not use the amount in box 16 as your PA taxable income but use the amount in box 5 as PA law most closely resembles that amount. PA does not allow a deduction for 401k withholding (most states do).

Don't forget that you will need to file a PA local earned income tax return and that this VA sourced income is reportable on the local return.