Non-Resident Employee State Tax.... (Wilmington: city hall, get credit, neighborhoods)

[mk09]

OK, so I graduated from college in May and have accepted a big job offer to work in Wilmington. I plan on living in Pennsylvania (in Philly). I understand that there are tax implications for working and living in different states, but I was wondering if anyone does this and what the case actually is? (I suppose I should ask my HR dept. too...)

My choice to live in Philly is mainly based on nightlife/entertainment and living close to friends, etc...rather than down in DE and driving to Philly on the weekends to spend time with friends. I know the commute will probably get annoying, but I'll have to live with it.



Any advice/knowledge of this subject is greatly appreciated. thanks

[RedBull681]

You will definitely want to check with the HR dept., but I'm pretty sure that PA will give you credit for the taxes you pay to DE. I did a search and found a discussion about this on here...hope it helps! https://www.city-data.com/forum/penns...orking-de.html

[Mary2014]

In addition to state tax rates do you realize you will also be subject to a philadelphia wage tax? If you live in Philadelphia and work in Philadelpha it is one rate and if you live in Philadelphia and work outside of Philadelphia it is a different rate - I think it is in the neighborhood of 4 to 5 % of your income depending upon if you work in Philadelphia or work outside of Philadelphia.

Consider living in one of the suburbs just outside of Philadelphia where the township wage tax is likely to be 1% or less.

Mary

[jskirwin]

I agree with Mary. The Philadelphia City Tax is a killer and well worth avoiding if you can. There are many good neighborhoods outside of the city that have what you are looking for without sending thousands of $$$ to City Hall.

As for the taxes you will get credit for taxes paid in Delaware if you live in PA. DE and PA are roughly the same until $50k or so, then Delaware becomes more progressive and you will pay more than you owe in PA. But you will get that back as a refund.

[Joe84323]

If you do the commute right, it's a 30 minute commute. If you had to pick a 30 mile commute, Wilmington is the best because you have buku alternatives in terms of public trans (Septa r2, Amtrak, Greyhound, Phillycarshare, Zipcar.) That way, your car could break down, and you still have 5 backups, of which most are hourly, and the Carshare is usually always available. If you worked in far NE Philly, for example, and you lived in South Philly, you'd actually be in a worse situation (sub, bus, bus, bad traffic.)

So, don't freak out on the commute. I do triple that daily myself, and I got used to it.

When I worked in Philadelphia in 2007, my residence was still technically in DE. When I did my taxes, I saw that it gave me the option to chose DE or PA for wage taxes. Choosing DE had me owe about 400 bucks. Choosing PA refunded me 500. And, well, it worked with flying colors.

Everything should be fine.

[jskirwin]

Joe
Philly City Tax is withheld and is 3.93% for residents and 3.50% for non-residents for 2009. If you live or work within Philadelphia city limits you are subject to this tax. There is no choice involved; you pay it. If you didn't pay it, then you worked outside the city limits.

You do have a choice on whether you want state taxes withheld at PA or Delaware rates. Since you opted for PA withholding, you owed $400 to Delaware because the DE tax rates are a little higher than PA.

If I were the OP I'd think good and hard about that taking that hit when you could live across the line and pay less. Or heck, move down to Delaware. It has night life too, and if you need more you can always drive up to Philly.