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Pennsylvania state taxes are Massachusetts unemployment benefits taxable income for Pennsylvania state income form PA-40?

Pennsylvania state taxes are Massachusetts unemployment benefits taxable income for Pennsylvania state income form PA-40?

Also, Can I claim an out of state tax credit on for PA Schedule G-L for the tax I paid to Massachusetts for Massachusetts Unemployment Benefits received in 2024?

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3 Replies
Vanessa A
Expert Alumni

Pennsylvania state taxes are Massachusetts unemployment benefits taxable income for Pennsylvania state income form PA-40?

No, PA does not tax unemployment benefits so it would not be taxable income in the state of PA.  You would would not be able to claim a credit for it, since it is not considered taxable income in the state of PA. 

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Pennsylvania state taxes are Massachusetts unemployment benefits taxable income for Pennsylvania state income form PA-40?

Just want to clarify,

Massachusetts Unemployment Benefits received are taxable income compensation to Massachusetts State.

Even though I pay out of state taxes to Massachusetts on the Massachusetts State Unemployment Benefits which is considered income compensation in MA, I cannot take an out of state tax credit on Pennsylvania Schedule G-L  because Pennsylvania does not considered unemployment benefits, regardless of the state source, as taxable income compensation?

KeshaH
Expert Alumni

Pennsylvania state taxes are Massachusetts unemployment benefits taxable income for Pennsylvania state income form PA-40?

Correct, the credit for taxes paid to other states is a way for states to eliminate or reduce double taxation. Since the unemployment compensation is not being taxed in both states, you wouldn't qualify for the credit.

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