What is my Pennsylvania Residency Status?

[sunnyssim96]

Background information is, I am a permanent resident in Colorado (I live at home with my parents and that is the state I hold my driver's license in). I am a nurse and I signed my first travel assignment in 2023 in California which lasted from 1/1/23 through 4/30/23. I came back to Colorado for maybe 4 days (?) and I moved to PA in mid-May of 2023 for graduate school. For tax purpose, I don't know know what my residency would be considered in the state of PA. I thought I was considered a part-year resident but I am a little confused due to living in PA for longer than 183 days. I rented an apt during the entire duration of my stay in PA as well as earns income in the state of PA. 

[DianeW777]

You could consider yourself a Pennsylvania (PA) part year resident or nonresident. The income you earned while you are physically in PA from the move in date until the end date is taxable to PA. Prepare any nonresident state first if you choose that option. 

If you consider yourself a Colorado (CO) resident because that is where you intent to return after each nursing assignment, then you would file a return there as a full year resident. Include all worldwide income on this return. You would be allowed a credit for taxes paid to another state on your CO return as a resident.

The best way to explain how the tax credit works (taxes paid to another state on the same income) is shown below. Prepare your nonresident state return first, then prepare your resident state return.

If your resident state tax is a higher rate, then all of the tax paid to the nonresident state will be applied.  If the nonresident state tax withholding is at a lower rate than your resident state you will make up the difference when all the calculations are complete. In reverse, if the state withholding on your nonresident state is at a higher rate than your resident state, you do not get the difference refunded unless the withholding was more than you tax liability for that nonresident state.  Your resident state will not refund any money they never received.  The notes below will explain how it works.

The credit for taxes paid to another state on the same income is used on your resident state because they do not want you to pay taxes twice on the same income.  As the resident state all worldwide income must be included.

The credit for tax paid to another state on the same income will be the lesser of:

1. the tax liability actually charged by the nonresident state, OR
2. the tax liability that would have been charged by your resident state

If you decide you are a part year resident in PA and CO, then you report only the income that was physically earned during your residency period for each state. In this scenario there is not credit for taxes paid to another state because you are paying each state what is due for your part year residency.  Also, there would be no CO return in this situation because nothing was earned there during your four days.

• Part Year PA
• Part Year CA
• No CO return