Income Tax living in one state working in another (pay, million, taxes)

[hartford_renter]

Hi,

I had a simple question, lets say I work in PE but live in DE.

I earn 100K and the income tax is 3% PE, 6% DE

Do I pay a different total tax, I'm guessing the total paid is 6% of 100K or 6K, if I just live in DE?

It seems that in most states you just pay whichever states rate is higher. So the total is the same but the breakdown of how much tax goes to the two states can vary.

Thanks

[Lemming95]

Some states have reciprocal agreements where you have taxes for your home state deducted and are only taxed for that state. States With Reciprocal Agreements - States That Do Not Tax Certain Out of State Workers
Others(looking at you-New York) fight for every dime. You can usually get a credit for taxes paid in another state on your home state taxes. But it is by formula set up by each state.
What do you mean by PE?

[hartford_renter]

I meant PA sorry.

I'm not really interested in the breakdown, just curious about the total.

3%/6% could be

3% or 6% or 9% in theory

[synchronicity]

Originally Posted by hartford_renter

I meant PA sorry.

I'm not really interested in the breakdown, just curious about the total.

3%/6% could be

3% or 6% or 9% in theory

You should just be subject to income tax in the state in which you reside, but as another poster noted, you should check to see about reciprocity between the states. You may be able to have withholding tied to the state you reside rather than the state you work in, check with your employer.

Here's a page with a link to the tax agencies to each state:
FTA Links Page

You can check there for more information, just click on the DE and PA links.

[rothbear]

I currently live in SC, but worked for 1.5 years in NC. I paid income tax to NC and got a credit on my SC taxes for it. Currently my DH works in PA and he pays all his income tax to PA and, again, gets credit for it on our SC tax return. That's the only way I have ever heard it to be, that is you paid taxes to the state where you earned the money, but can't say 100% for sure for everywhere.

Probably the best thing would be to check the revenue sites of both states. I am almost certain you would have to pay tax to PA, but not sure the rules of DE if they would allow you to get credit for that on your DE income tax return. This is why I love Turbo Tax, although PA's income tax form is so easy that I would never pay TT to do that one. NC/SC are both much more complicated.

[freemkt]

[quote=Lemming95;31591069]Some states have reciprocal agreements where you have taxes for your home state deducted and are only taxed for that state. States With Reciprocal Agreements - States That Do Not Tax Certain Out of State Workers
Others(looking at you-New York) fight for every dime. You can usually get a credit for taxes paid in another state on your home state taxes. But it is by formula set up by each state.
What do you mean by PE?[/quotpe]


My first thought was that he is a Phys Ed instructor in Wilmington, but on second thought I think he works in Pennsylvania and almost certainly does not live in Wilmington.

[Mightyqueen801]

I don't know if it's the same for all states, but for the quarter-million or so New Jersey residents who work in Manhattan, it works like this: New York State Income Tax is significantly higher than NJ's. You have to file a NY Non-Resident Tax form at the end of the year. You also have to file a NJ Income Tax form, even if you only worked in NY and therefore paid no money into NJ.

What happens is that there's a section on the NJ form called "Credit for Taxes Paid to Other Jurisdictions." You fill that out, the NY State Income Tax always exceeds the NJ Income Tax by a couple thousand dollars or more, and you file. Basically, you fill out a lot of paperwork for nothing, but you don't pay into BOTH states.

[LaCinciStunna]

Hi ---- I live in PA but I will be working in DE. Do and how would I pay taxes for both states? Will that be fillies out on a w-2.