As a Pennsylvania resident who works in Delaware, do I need to file my Pennsylvania income taxes quarterly?

by Chad Schweighart, CPA | Nov 30, 2018

I live in Pennsylvania and work in Delaware. I understand I will need to file two year-end state income tax returns. Since my Delaware income tax is withheld, but my Pennsylvania income tax is not, do I also need to file my Pennsylvania income taxes quarterly? 

As a nonresident working in Delaware, you will have to file a nonresident return in Delaware. The tax you pay in Delaware will be credited in Pennsylvania for the amount of tax that would have been owed in Pennsylvania had you worked in Pennsylvania. In other words, you cannot get a refund in Pennsylvania if the tax paid in Delaware is higher than the tax that would have been due to Pennsylvania. Since Delaware has a graduated rate of income tax, it is possible that the amount of tax you pay in Delaware is less than what the rate would have been in Pennsylvania. If that is the case, you will owe the remaining amount to Pennsylvania.  

In terms of making estimated payments, since Delaware is not a reciprocal state, no estimated payments are required unless you have greater than $8,000 in income other than compensation earned from the nonreciprocal state. This income could be from other jobs, interest, dividends, capital gains, or other passive forms of income.

For more resources, check out PICPA’s Money & Life Tips, Ask a CPA, or CPA Locator.

Answered by: Chad Schweighart, CPA, is an accounting manager with Gift & Associates in Mechanicsburg, Pa.

The responses are based on the limited information provided by the questioner and apply the laws and regulations at the time of posting. Other options could arise as rules and regulations may change over time, including but not limited to the passage of the Tax Cuts and Jobs Act of 2017. They are intended to provide general information, not specific accounting or tax advice; they are not intended or written to be used and cannot be used for the purpose of avoiding or evading taxes or penalties under the IRS code or regulations. Views expressed do not imply an opinion of the PICPA, its officers, directors, employees, or members.
Financial FAQs

Search the most frequently asked finance and accounting questions and read the responses from PICPA members. Always consult a CPA before taking action.