PA resident earned wages in NJ. NJ taxwitheld on a portion of the wages. Pa return is picking up that amount as taxable state wages.

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No PA tax was withheld on the w2. shouldnt PA taxable wages be difference between federal and NJ wages?

ProSeries Professional

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sjrcpa

Level 15

No. A PA resident is taxable in PA on all of their wages.

IF PA and NJ play nice, client gets a credit on PA return for tax paid to NJ.

The more I know the more I don’t know.

FTAX

Level 5

You might want to delete this comment. Anyway, many employers will not co-operate and continue to withhold taxes for the wrong state in these situations between PA & NJ.

GodFather

Intuit Community Champion

The W2 is showing NJ Wages for the PA Resident? NJ and PA have a reciprocity agreement. If your client made their employer aware of his residency, the employer would have withheld PA Tax instead of NJ. Under the circumstances you describe, it sounds like your client will need to file a New Jersey NR with no income to obtain the portion of NJ withholdings. You would then also provide PA with a copy of the NJNR you filed. Not sure your client is eligible for a credit on PA due to the reciprocity agreement.

sjrcpa

Level 15

Thanks. I didn't know if they had a reciprocity agreement. Since they do, I agree no credit on PA return.

The more I know the more I don’t know.

GodFather

Intuit Community Champion

Occasionally I surprise myself and I am somewhat right. 😊

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