Can claim credit for PA local and municipal tax paid?

[rgtax]

My client is a resident of NJ and working at city of Philadelphia. I am filing his 2022 NJ tax return.

His W-2 shows he don't have PA State wage: Box 16 is empty and no PA state income tax paid: Box 17 is empty, but shows amount of Local wage (box 18) and amount of Local tax (box 19) paid. I am not sure that would qualify for PA/NJ Reciprocal Income Tax Agreement, so my client can claim a credit from PA local and municipal tax paid.

Thank you in advance for help! Rachel

[itonewbie]

City tax paid to the city of brotherly love is not covered by the reciprocal agreement.  The tax can, therefore, be claimed for other state credit.  To read up on that, you can refer to the NJ Division of Taxation website and the filing instructions.

[rgtax]

Thank you very much for your kindness reply!!

The bottom line is the PA/NJ reciprocal agreement only subjects State wage tax (box 16) not Local wage Tax (box 18). May be it is the reason for the ProSeries software was not flowing through the the local tax (box 19) as a credit for income or wage taxes paid to other jurisdiction. 

It is very confusing. I thought only non-residents conduct businesses pay for local or city tax annually, the employer responsible for local or city tax for employee who is a non-resident lives at other jurisdiction, 

Thanks again!!

Rachel

[itonewbie · Accepted solution]

No problem, @rgtax.  If my response earlier answers your question, please consider marking it the solution so as to help others who have similar question.

Have a great week ahead!

[rgtax]

Thank you for your reminder. Great help!!