I accidentally filed state taxes for Pennsylvania (where I work), but I live in Maryland and pay Maryland state taxes. What should I do?

by Gregory Paulding, CPA | May 14, 2019

I work in Pennsylvania, but I live in Maryland and pay Maryland state taxes. When I filed my taxes on TurboTax, I accidentally filed taxes in Pennsylvania. Now I have a bill from Pennsylvania. How do I fix this?

Your question requires me to assume that you filed both Maryland and Pennsylvania tax returns. As a Maryland resident, you benefit by a reciprocity agreement between Maryland and Pennsylvania. In your circumstance, your Pennsylvania employer is required to withhold Maryland taxes so that you would only have to file a Maryland return even though your earnings were from Pennsylvania. First, you should confirm that your Pennsylvania employer withheld Maryland taxes. If this was not done, ask your Pennsylvania employer to do so under the reciprocity agreement.

You are not required to file a Pennsylvania return if your only Pennsylvania income was from wages earned in Pennsylvania. If you did file a Pennsylvania return, which it sounds like you did, then to remedy the situation you will need to file both the PA-40 and the PA-40X with an explanation. Ensure that you follow the instructions on your notice from Pennsylvania, but, in the end, the only way to undo the Pennsylvania filing is to correct it by filing the two forms above to negate taxable income in Pennsylvania. Additional circumstances may exist in your case, and you may want to start with Maryland’s summary of this issue.

Seek competent assistance to help you if need be, and, as always, work with your tax professional on these important matters.

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

Answered by: Gregory Paulding, CPA, is president of Paulding & Associates PC in Erie, 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.
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