Which State Do I File Taxes In?

[trippypea]

We live in PA. Starting in 2021, my husband began working for a company in a state that is not reciprocal to PA (7 months). Which state(s) do we need to file taxes in?

Also, Box 1 (wages) and Box 16 (State wages) are the same. However, Box 18 (local wages) is significantly different; almost $20,000 more than Box 1/Box 16. Local taxes for the municipality where I live is 1%, and the local amount taxed WAS 1%...of Box 1, which is how it should be.

So why is Box 18 so high?

[TheOtherMe]

I am not an expert in state taxes but I know you will have to file state tax returns in both states.  Depending on the rules of the other state, you may or may not be able to file separate returns or get a credit for taxes paid to PA.  

[rangerj]

Is you husband literally working in the other state, or is he working FOR the other company that is located in the other state. Typically the state has jurisdiction to tax its residents and those who ENTER the state and work.

[vonna]

Jan 12, 2022 14:58:20 GMT -5 trippypea said:

We live in PA. Starting in 2021, my husband began working for a company in a state that is not reciprocal to PA (7 months). Which state(s) do we need to file taxes in?

Also, Box 1 (wages) and Box 16 (State wages) are the same. However, Box 18 (local wages) is significantly different; almost $20,000 more than Box 1/Box 16. Local taxes for the municipality where I live is 1%, and the local amount taxed WAS 1%...of Box 1, which is how it should be.

So why is Box 18 so high?

Sometimes income that is not subject to federal and state tax is subject to local tax. Maybe 401k contributions or other deductions were added back in?

[trippypea]

Jan 19, 2022 11:12:22 GMT -5 rangerj said:

Is you husband literally working in the other state, or is he working FOR the other company that is located in the other state. Typically the state has jurisdiction to tax its residents and those who ENTER the state and work.

No, he works from home and has only been to the office one time in 2021.

[trippypea]

Jan 19, 2022 13:09:08 GMT -5 vonna said:

Jan 12, 2022 14:58:20 GMT -5 trippypea said:

We live in PA. Starting in 2021, my husband began working for a company in a state that is not reciprocal to PA (7 months). Which state(s) do we need to file taxes in?

Also, Box 1 (wages) and Box 16 (State wages) are the same. However, Box 18 (local wages) is significantly different; almost $20,000 more than Box 1/Box 16. Local taxes for the municipality where I live is 1%, and the local amount taxed WAS 1%...of Box 1, which is how it should be.

So why is Box 18 so high?

Sometimes income that is not subject to federal and state tax is subject to local tax. Maybe 401k contributions or other deductions were added back in?

I thought about that, but he wasn't eligible for 401k in 2021, and while their were deductions for health and dental coverage, it only accounts for $12K.

[countrygirl2]

Moved

[rangerj]

If your husband worked from home and did not literally or physically work in the other state he should not owe the other state any tax. At worst he may owe the other state tax on the one days wages for the day he went into the other state for work. Many states, I do not know about all states, do not tax the wages of employees who go into their states for a meeting of for training. Call the other states tax department and have this conversation with them. If you do not owe that state tax find out how to file for a refund.