Do I need to pay Pennsylvania and Ohio state taxes if I move?

by Laurie M. Peer, CPA | May 17, 2018
askacpaiconI moved from Berks County, Pa., to Ohio in February 2011. For one paycheck, while I was moving to Ohio, my employer had my address listed as living in Pennsylvania but working in Ohio. (This paycheck included money for relocation from my employer, so it was much larger than normal). Therefore, they withheld Pennsylvania state tax, but Ohio local tax. As a result, my Pennsylvania state income is higher than my Berks County local income on my W-2. (I worked for the same employer in both states). Now my local tax bureau in Pennsylvania is saying that I owe additional taxes on all my Pennsylvania wages. I provided them proof that I paid local taxes in Ohio. They say since I didn't pay Ohio state tax and I did pay tax to Pennsylvania, I don't qualify for an out-of-state local credit. Do I really need to pay local taxes in both states?

Answer: If you did receive the compensation as a Pennsylvanian resident, then both the Pennsylvania state and Berks County local income taxes would apply. The good news is that you can apply the Ohio local tax paid as a credit against the Berks County local tax. You should attach a copy of your Form W-2 showing the Ohio local tax and a copy of the Ohio local tax return to your Berks County earned income tax return.

Answer By: Laurie M. Peer, CPA, is a principal with RKL LLP in Wyomissing, Pa. 

***Answer originally published Jan. 1, 2014.
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