What are taxes in Pennsylvania?

Part-year resident filing Pennsylvania taxes - what to do with Ohio W2s?

• I worked during January of 2008 in Ohio, until I was laid off. I then went back to my parent's home in Pennsylvania, changed my address and got a driver's license there. I received unemployment from the state of Ohio, which I had federal tax taken out of. In June I was employed back in Ohio. The only income that I think can be taxed in Pennsylvania is interest income from a CD account that accrued about $125 during the 2008-2009 year. So here comes the meat of the question: when I file my Pennsylvania income tax, do I need to include in any way the W2s from Ohio? Last year I had jobs both in Pennsylvania and Ohio, and did not submit my Ohio W2. Pennsylvania did want my Ohio W2, for some reason, I think the issue was that by claiming only the income from Pennsylvania, it gave me a larger refund that didn't reflect all the money I earned in and out of state during the year. I'm calling Harrisburg soon to chat with someone about this, but I wanted to see if there were any suggestions from the people on Yahoo. I'm contemplating just hiring a tax professional to deal with my State (Ohio/PA) and Federal tax.

• Answer:

  1. Generally speaking, when you lived in one state while working in another, each state requires you to report (not necessarily pay tax on) all income, from both states. Some, but not all, states also require part-year residents to report (not necessarily pay tax on) all income for the entire year. 2. Some states, but not all states, tax all unemployment compensation received while a resident of that state, even if received from another state. If PA taxes unemployment compensation received by PA residents from OH, then you must pay that tax. If pay does not tax unemployment compensation or taxes only PA unemployment compensation, then you do not. 3. If you remained a PA resident when you resumed working in Ohio, then PA can tax you on the income received working in Ohio while living in PA. However, you can claim a credit on either the OH return or the PA return (not sure which) for either the tax paid to OH on income also taxed by PA or the tax paid to PA on income also taxed by OH, whichever is less. Therefore, your net tax on that income will be either the PA tax or the OH tax, whichever is more, not the total of both.