As a Kentucky resident and employee for a Pennsylvania company, does my employer need to withhold Pennsylvania taxes?

Jun 26, 2019

I live in Kentucky and I work for a Pennsylvania company. I do not do any work within the Pennsylvania state lines. The company currently withholds Kentucky state taxes. Do I need to have my employer withhold Pennsylvania taxes? I never come to the state.

If you both live and work in Kentucky, this is the only state in which you will pay personal income tax. The location of the employer is irrelevant. Individuals are generally taxed on income in the state in which it is earned, unless the resident state and the work state have a reciprocal agreement. So, your employer is correctly withholding and remitting income tax in your state of residence, and this is the only state in which you are required to file a tax return for this income.

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

Answered by: Susan E. S. Howe, CPA, is principal of Howe Advisory in Strafford, Pa.

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