My Maryland employer doesn't withhold PA state taxes. The W2 they issue does not include PA info. How do I enter my PA income so state taxes calculate correctly?

Forum|Forum|2 years ago
March 24, 2024
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This doesn't affect my federal return, just PA state. In previous years this has not been a problem, not sure what TT changed this year.

TurboTax Online

talmagAuthor

I temporarily resolved this by going into "Forms" and manually entering W-2 information for my MD employer entering the box 1 and box 5 income, PA taxable income the same as box 5 and tax withheld as 0. This appears to have rolled through to other parts of the worksheet and the PA Tax Due changed reflecting the additional taxable income. Not sure if this is the correct way to address the issue or if it will cause any problems as I proceed with the return.

DMarkM1

Your forms mode steps will cause the income to show for your resident PA state tax return. Alternatively, in the federal "Wages & Income" section, you could have edited the W2 entries and added a PA line (boxes 15-20) showing the PA wages in box 16 and zero withholding in box 17.

However, be advised, PA and MD have a tax reciprocity agreement. That agreement states only your resident state will tax wages earned in the other state. So you need to file a non-resident MD return and allocate zero wages to MD so that the MD taxes withheld are refunded to you.

Further, MD taxes should not be withheld from your pay only PA taxes should be withheld. You need to get with you employer to change the state withholding going forward. You should only need to file in PA and pay taxes in PA.

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talmagAuthor

Thanks, but editing the W-2 in the federal forms does not work. Because my MD employer does not report or withhold PA taxes they do not have a PA Employer Tax ID. TT does not allow me to enter PA information in boxes 15 thru 17 without entering a Employer Tax ID in box 15. As a PA resident, I do need to file and pay estimated PA taxes each quarter for my MD earnings. Filing a MD non resident return is not necessary because my MD employer does not withhold MD or PA taxes on my income.