College student with income from 2 states

Forum|Forum|2 years ago
February 12, 2024
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My son is a college student in NJ. His legal residence is PA. He was 2 W-2's from is college, one for PA filing and one for NJ filing. Box 16 is the same on both W-2's, but Box 17 state income is different for each state.

Does my son owe taxes on both state returns. Working on PA return and TurboTax asks if the income on both W-2's is not taxable in each state.

Does he owe tax to both states, from PA's perspective.

Thanks

Peter

Vanessa A

If he is a PA resident, then he would not need to pay NJ income taxes since they have a reciprocal agreement. The income for NJ would not be taxable. ALL of his income would be taxable to PA.

So you would only need to enter the one for PA and file a return for PA, unless they withheld taxes for NJ, then you would need to file a NJ Non resident return to get the state taxes back. When you do the NJ nonresident return, you would enter $0 as the taxable wages but the full amount of taxes they withheld.

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carrapAuthor

As a follow up to my question. The NJ 1040NR form has a "'column A" for income from everywhere and a "column B" for income from NJ only. My son has a W2 from PA and a W2 from NJ for income earned during the summer and during the school year. If I follow their instructions and report the PA income along with the NJ income, he ends up owing a nominal amount of tax to NJ, but does get most of what was withheld back. Does this seem correct?

Vanessa A

No. Since he is a resident of PA, he shouldn't pay any taxes on anything he earned in NJ. The income for NJ Only would be $0. Column A will have income from everywhere, column B will have 0.

On the PA return, ALL of the income will be counted as PA income.

"Compensation paid to Pennsylvania residents employed in New Jersey is not subject to New Jersey Income Tax under the terms of the Reciprocal Personal Income Tax Agreement between the states." PA/NJ Reciprocal Income Tax Agreement

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