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Pennsylvania tax questions -

Forum|Forum|6 years ago
February 22, 2020
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I am a part-year PA resident. I moved from NJ to PA the very end of October 2019. So about 2 months in PA.

1. I am getting a penalty for underpayment of taxes. I was so busy moving, my thoughts were not on tax payment. Is there a way to avoid the penalty for someone very new here?

2. Is this right? For form 1099-R (pension and RMD), the TT PA form has the full amounts. I had understood that PA taxes no retirement income. For the pensions I selected the PA Distribution Type, I13 "I'm eligible; plan is eligible (no PA tax)". The RMD is "J1 Traditional or Roth IRA, over 59.5" Are these right?

3. Dividends - TT PA form does not ask what portion is for PA (NJ does). I've only been here 2 months. There is also an instruction "Check this box for each line item that represents a PA tax-exempt dividend". But TT fills in nothing, and one (tax exempt interest) is a mix of NJ and PA tax exempt muni bond funds. So it is getting fully taxed for the entire year for PA incorrectly. I had the NJ funds when in NJ, sold them and when in PA for 2 months have the PA funds. What can I do in TT?

Best answer by DavidS127

The first thing to do is get your PA taxable income to calculated correctly on your part-year resident return. After the return is correct, you may not have an underpayment penalty.

As long as you have reached retirement age, the pension and RMD are not taxable by PA. Check your entries in for the 1099-Rs and the PA state tax return questions. The 1099-R boxes in TurboTax should "match" those on the actual 1099-R.
For your dividends and taxable interest, there will be a question in the PA part-year resident return to report how much of your dividends were received while living in PA. You will need to manually calculate and enter the correct number.
For the tax-exempt interest, there will be some provision in the state question to report this as taxable. When you get to that section of the PA return, exclude any PA tax-exempt interest from the "PA amount" you report.

DavidS127Answer

The first thing to do is get your PA taxable income to calculated correctly on your part-year resident return. After the return is correct, you may not have an underpayment penalty.

As long as you have reached retirement age, the pension and RMD are not taxable by PA. Check your entries in for the 1099-Rs and the PA state tax return questions. The 1099-R boxes in TurboTax should "match" those on the actual 1099-R.
For your dividends and taxable interest, there will be a question in the PA part-year resident return to report how much of your dividends were received while living in PA. You will need to manually calculate and enter the correct number.
For the tax-exempt interest, there will be some provision in the state question to report this as taxable. When you get to that section of the PA return, exclude any PA tax-exempt interest from the "PA amount" you report.

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N

netmouserAuthor

THANK YOU. I had not seen the text to adjust the income for state portion. That solved all my problems. Only owe $2. Still sorry PA does not have deductions like Medical. Next year I'll get hit as a full time resident.

V

vesperm

i understand that my pension is not subject to state tax; however, i don't see on your program where this is stated or asked. Also, on the form it says enter and X if not subject to tax, but unclear where this x is entered.

please help. thanks, Marie V

N

netmouserAuthor

In the state tax entries, for PA. Go to the Income and Adjustments section. You will scroll through a page for each retirement income form you entered in the federal tax area. For each, it will ask what kind of retirement income do you have from Pennsylvania? It will display the name of the brokerage company (or whatever provider). There is a selection box to select State Type Code. For pension, I chose the code "I'm eligible; plan's eligible (no PA tax). You will scroll through each retirement income received until you are done.