I moved to a new state for grad school in August. A few questions about two state filing and income

theonewhoistaxed45
theonewhoistaxed45 Member Posts: 4 Newcomer
edited February 15 in State Filing

Hi everyone.

I moved to PA for grad school.

  1. I worked and received wages and tips for about 8 months out of the year in Missouri.
  2. I did not receive any income in PA in 2024, except for the interest generated from my bank accounts and dividends.
  3. Right now, I am filing two state returns as a part year resident for both.

My questions:

  1. For interest income, do I split the interest income based on months I was in PA? For example, if my total interest was $500 in 2024 and I lived in PA for 3.5 months, I would report $145.83 on my PA taxes?
  2. Is it the same with dividend income?
  3. Is it worth filing as a full-time resident in the MO tax return? I was there longer than 183 days.
  4. Is it worth not filing as a PA resident at all since I moved for school?

Thanks for your help

Best Answer

  • WrenD
    WrenD FreeTaxUSA Agent Posts: 22
    Answer ✓

    Hello theonewhoistaxed45,

    I apologize for the confusion! Only nonresidents do not pay PA income tax on ordinary interest. The dividend and savings account interest would be taxed based on the percentage of the year you lived in PA since the Pennsylvania Taxable Income Information states "Part-year residents are subject to PA personal income tax on all income earned, received and realized from all sources when residents of PA."

    For example, if you lived there for four months and had $200 in interest, then approximately $67 would be taxable by Pennsylvania.

Answers

  • TriciaD
    TriciaD FreeTaxUSA Agent Posts: 26

    Hello theonewhoistaxed45,

    Part-year and non-residents of Pennsylvania are typically taxed on all income derived from Pennsylvania sources, which generally includes earned income such as employee compensation, rental income, and business income. However, part-year and non-residents are not subject to Pennsylvania tax on ordinary dividends if these dividends are not sourced from Pennsylvania. 

    If you did not receive earned or other taxable income from Pennsylvania sources, it may not be necessary for you to file a Pennsylvania tax return. Please visit the following link to determine your filing requirements: Do I Need to File a PA Tax Return? 

    For more information about Pennsylvania taxable income, please refer to this link: Pennsylvania Taxable Income Information 

  • theonewhoistaxed45
    theonewhoistaxed45 Member Posts: 4 Newcomer
    https://community.freetaxusa.com/discussion/comment/4398#Comment_4398

    Hello,

    I am confused by this. I understand that part-year and non-residents are not subject to Pennsylvania tax on ordinary dividends if these dividends are not sourced from Pennsylvania.

    So does that mean my dividend and savings account interest would not be taxed at all in PA given that I only lived here for a few months in 2024? Would I enter 0 for the amount I owe to PA or based on the percentage of the year I lived in PA?

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