Question

Working in a state with reciprocity and moving to a state without

Forum|Forum|5 years ago
March 14, 2021
1 reply
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How do I handle filing taxes when I was a part year resident in NJ that worked in PA. But then moved to FL and still received severance payments from my PA job. I know I need to file NJ as a part year resident and answered the question about income earned while in new jersey. But then moving to Florida do I also now need to file a PA state? And with that, does Philadelphia municipality local taxes come off as a deduction/paid taxes to the state?

E

ErnieS0

Yes, file a nonresident Pennsylvania income tax return for your severance payment.

Pennsylvania says, “Severance payments received from services that were performed in PA would be taxable to PA even if you are no longer a PA resident with the exception if you move to a reciprocal state. Due to the reciprocal agreement PA would not tax you on this income if you moved to Virginia, West Virginia, Indiana, Ohio, Maryland or New Jersey.”

You cannot claim a tax credit on the Pennsylvania tax return for Philadelphia wage tax. You can file a wage refund petition with the Philadelphia Department of Revenue as you did not work in Philadelphia when you received your severance. Your former employer must sign this.

You can find the necessary forms and instructions at Wage Tax refund form (salaried employees).

In summary, file a part-year NJ income tax form reporting all your income except the severance. Claim a credit for Philadelphia Wage Tax. If you only received one W-2, you will have to adjust the other state credit and subtract out your severance and Philly wage tax portion.

File a non-resident Pennsylvania income tax form to report the severance payment.

File a Philadelphia Wage Tax refund form for any Philadelphia wage tax withhold on your severance.

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