If I work in Ohio and live in Pennsylvania, can I claim a credit on my Pennsylvania tax return for Ohio local taxes withheld by my employer?

May 03, 2019

Pennsylvania and Ohio have reciprocity agreements for payroll on state taxes only. This means that residents of either state do not owe personal state income tax to the state they are working in; state income tax is due only in the resident state. This reciprocity agreement does not extend to Ohio cities. Additionally, Pennsylvania only allows credits for taxes paid to another state if the state was rightfully due the tax (such as in a nonreciprocity wage state). So, a Pennsylvania credit is not allowed for local taxes paid in another state. 

As a side note, a credit for the Ohio local income taxes paid may be available to you on your local return.

I suggest reading the instructions for the PA Schedule G-L for additional details. 

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

Answered by: Michael J. Eby, CPA, is partner with the tax services group of RKL LLP in Harrisburg, Pa.

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