My husband and I live in NJ but he works in PA. Where to declare the income?

How do I file taxes if my husband works in another state?

Generally, if you and your spouse are filing a joint federal return but you work in or are residents of different states, you need to file separate state returns. Sometimes this is required by state tax law; other times it is to your best interest to not include your non-resident spouse’s income on your state return.

Can spouses be residents of different states for tax purposes?

An individual may reside in multiple states, but can have only one domicile — that taxpayer’s fixed, permanent home. Individuals domiciled in a state are automatically considered state residents for tax purposes. Usually, this means the state is entitled to tax that spouse’s worldwide income.

What taxes do I have to pay if living in Pennsylvania and working in New Jersey?

If you lived in NJ the entire tax year, and worked in PA, your W-2 wages are not subject to PA taxes. For tax purposes, your PA wages are considered NJ income, and are fully taxable by NJ. If this is your situation, you would answer No in the Personal Info section of TT to the question about having Other State Income.

Do I have to pay New Jersey tax on income I earned in another state?

Income must be taxed by both New Jersey and the other jurisdiction to be included on Schedule NJ-COJ. For example, unemployment compensation may be taxed by another jurisdiction, but it is not taxable by New Jersey. Do not include this income on line 1 of Schedule NJ-COJ.

Can I be taxed on the same income in two states?

Federal law prevents two states from being able to tax the same income. If the states do not have reciprocity, then you’ll typically get a credit for the taxes withheld by your work state.

Can a married couple have two primary residences?

The IRS is very clear that taxpayers, including married couples, have only one primary residence—which the agency refers to as the “main home.” Your main home is always the residence where you ordinarily live most of the time.

Can you file married jointly for federal and married separate for state?

In TaxAct®, all information entered on the federal return flows to the attached state return(s). That means that it isn’t possible to have conflicting filing statuses (i.e., married filing joint, married filing separate) between federal and state forms in one return.

Can married couple file separately?

Married couples have the option to file jointly or separately on their federal income tax returns. The IRS strongly encourages most couples to file joint tax returns by extending several tax breaks to those who file together.

What are the rules for married filing separately?

Eligibility requirements for married filing separately

If you’re considered married on Dec. 31 of the tax year, then you may choose the married filing separately status for that entire tax year. If two spouses can’t agree to file a joint return, then they’ll generally have to use the married filing separately status.

Do I need to file a PA tax return if I live in NJ?

You must enclose a signed statement with your New Jersey nonresident returns indicating you are a resident of the Commonwealth of Pennsylvania. Likewise, if you are a New Jersey resident and your employer withheld Pennsylvania income tax from wages, you must file a Pennsylvania return to get a refund.

Does NJ have reciprocal tax agreement with PA?

The Reciprocal Personal Income Tax Agreement between Pennsylvania and New Jersey means compensation paid to New Jersey residents employed in Pennsylvania is not subject to Pennsylvania income tax. Therefore, you cannot claim a credit on Schedule NJ-COJ for taxes paid to Pennsylvania on those earnings.

Do I need to file PA tax return if I live in NJ and work in Philadelphia?

You must file a nonresident PA state tax return to get that back, and then a NJ resident return. NJ will give you at least partial credit for the Phila wage tax.

What happens if you live in PA but work in NJ?

Starting in 2018, PA residents working in NJ will file a NJ income tax return then file a PA Income Tax Return (PA- 40). They will get a credit toward their PA income tax obligation for income tax paid to NJ. This is called a resident credit.

Can you live in Pennsylvania and work in New Jersey?

You’re correct, NJ and PA do have tax reciprocity for W-2 wages. If your only income from NJ was W-2 wages, you do not have to file a NJ tax return. That income is taxable only by your home state of PA.

Is PA local tax based on where you live or work?

The tax is based on the taxpayer’s place of residence (domicile) and NOT their place of employment. The EIT is separate from the Pennsylvania personal income tax (your state income tax).

Do I have to file a local income tax return in PA?

State law requires Pennsylvania residents with earned income, wages and/or net profits, to file an annual local earned income tax return along with supporting and withholding documentation, such as a W-2. You must file an annual local earned income tax return even if you are: subject to employer withholding.

What income is not taxable in Pennsylvania?

Pennsylvania fully exempts all income from Social Security, as well as payments from retirement accounts, like 401(k)s and IRAs. It also exempts pension income for seniors age 60 or older. While its property tax rates are higher than average, the average total sales tax rate is among the 20 lowest in the country.

How much money can you make in PA without paying taxes?

According to Pennsylvania instructions for Form PA-40IN, “If you are a resident, part year resident or nonresident of Pennsylvania, you must file a tax return if: You received PA gross taxable income that exceeds $33 even if no tax is due.

Who must file a Pennsylvania income tax return?

Every resident, part-year resident or nonresident individual must file a Pennsylvania Income Tax Return (PA-40) when he or she realizes income generating $1 or more in tax, even if no tax is due (e.g., when an employee receives compensation where tax is withheld).

At what age do you stop paying property taxes in PA?

At least 60 years old (if you are married, either spouse needs to be 60) A widow or widower 50–60 years of age. Permanently disabled and 18–60 years old.