NJ resident worked in PA. Requesting refund for Taxes paid to PA.

[Angel Tr33]

Hello Everyone,

I have a client who was a full year Resident of NJ and worked the full year in PA.  His employer withheld PA taxes. What I'm trying to accomplish is to file a Nonresident PA return requesting a refund so that client then use that refund to pay his NJ taxes.

I  prepared the PA nonresident return and  it calculates a Zero Balance Due because it is pulling his wages from the federal return. So then I decided to override Line 1a on Form PA-40 which reports the client's Gross Compensation and replaced it to Zero. This produced a refund which is what I expected, however, I'm receiving an error message when i go to e-file.

It states: " You Must Fix This Error -- Form PA-40: Ln 1a-Gross compensation should not be overridden and changed for State Electronic Filing. Using an override can prevent the cross-checking that's important to an accurate tax return. The program automatically calculates Line 1a. To cancel the override, choose 'Cancel Override' from the Edit menu."

Has anyone experienced this with Proseries?

Is there away around this?

Thank you for any tips and guidance.

[itonewbie]

That's typical.  Trying leaving the state wages as is and entering that as a negative adjustment (modification) on the PA return, to zero out the income.

[Angel Tr33]

Hello @itonewbie ,

Thank you for your help.  

Is there a specific form or line item where I should enter the adjustment(modification).

My apologies, this is my first year using Proseries.

[itonewbie · Accepted solution]

NP, @Angel Tr33!

It turns out modification of PA-40 is not even necessary.  Simply right click on Line 1a and override gross compensation to $0.  It shouldn't generate any critical diagnostic and that'd be in line with the filing instructions for this type of refund claim.

[sjrcpa]

Next time try to keep it all in one thread for continuity.

https://proconnect.intuit.com/community/proseries-discussions/discussion/nj-resident-worked-in-pa/01...

[Angel Tr33]

@itonewbieshould I enter the negative amount on the Gross Comp Wks on?

[itonewbie]

I wouldn't.  You'd be back to square one.

PA will have no problem accepting the return.  Refer to the filing instructions for what you need to attach to substantiate the $0 reporting on Line 1a.

[Angel Tr33]

Okay. Gotcha!

It is generating this error message:

You Must Fix This Error -- Form PA-40: Ln 1a-Gross compensation should not be overridden and changed for State Electronic Filing. Using an override can prevent the cross-checking that's important to an accurate tax return. The program automatically calculates Line 1a. To cancel the override, choose 'Cancel Override' from the Edit menu."

[itonewbie]

You might like to try this and see if it will let you through:

https://proconnect.intuit.com/community/help-articles/help/turning-off-error-checking-for-electronic...

[Angel Tr33]

Thank you so much @itonewbie @sjrcpa,I appreciate the time and effort for guiding me through.

And just to confirm in a scenario like this you don't use Sch NJ-COJ for taxes paid to other jurisdictions of PA

[itonewbie]

@Angel Tr33We're glad to be of help.

No, you don't use NJ-COJ because there's no credit to be claimed.  Under the PA-NJ reciprocal agreement, taxes are payable solely to the resident state, which means the income is not being subject to double taxation.

What your client needs to do is to make sure he/she submits the exemption certificate to the PA employer ASAP, if not already done, to ensure NJ SIT will be withheld going forward.

If any of the posts above solved your problem, you may consider marking it as a solution to benefit others who have similar questions.

[sjrcpa]

You're welcome

[twalsh]

You do not fill out the NJ-COJ for PA state taxes but if the taxpayer also has Philly Wage Tax or Local Tax taken out, then yes, you will file a NJ-COJ to claim a credit for those taxes, but never for PA state taxes.