live in NJ, work in PA - credit from NJ for local PA taxes

mataushas
mataushas Member Posts: 1 Newcomer
edited March 7 in Credits/Deductions

I would like some guidance on different state/ local tax credit questions. from freetaxusa, there's a question:

"Did you have any taxes withheld from your wages or retirement income by Philadelphia or another Pennsylvania city?" yes, I have taxes "withheld" in box 19 by another city in PA.

then it brings me to the next page.

"Enter the New Jersey income you received that was taxed by both New Jersey and Pennsylvania:" 80k

"We’ve calculated that your Pennsylvania tax amount is $5,347. You can enter this amount below now, but we recommend you come back to this screen after you finish your Pennsylvania tax return for a more accurate calculation."

"Enter the amount of tax you paid to Pennsylvania on the above income:" NJ has reciprocal agreement that I pay just to one state where I live (NJ). this makes sense. box 17 says 0 on a W-2 labeled "PA" in box 15.

"Enter the amount of tax withheld as shown on your Pennsylvania return:" do I enter Box 19 (local income tax) here? Box 19 shows $794. Is this amount tax withheld or tax paid? This question says "amount withheld" and I'm unsure if box 19 is "withheld" or "paid".

If i enter $794 in "tax withheld" box, I get 0 additional NJ state refund. if I enter $794 in "tax you paid" box", I get additional $794 refund from NJ state.

Simply, I'm confused by the wording "withheld" or "taxes paid". can someone help explain? I would pay for pro level support but not sure if they can easily help because it seems complicated. I tried to manually calculate this using Schedule NJ-COJ form but it was still confusing. Pro level support page seems less about state tax questions and I didn't want to waste money. "Tax Pros will assist with state questions by researching and provide state tax advice based on the quality of the state's documentation given on a topic. Some topics may fall outside the scope of Pro Support as determined in the tax expert's sole discretion."

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Answers

  • TaxMorgan
    TaxMorgan FreeTaxUSA Agent Posts: 104 image
    Hello mataushas,

    Since we do not have access to your account information here in the community, this question would be best answered by reaching out to us directly from the support center in your account.

    "Taxes paid" to PA would be the amount of tax that is actually due to PA on your PA state tax return. "Taxes withheld" would be the amount of PA tax withheld on your paychecks throughout the year.

    Since NJ and PA are reciprocal states, there may be additional things to take into account that we are not able to see here.

    We have experienced agents who can help you with these sections of the software without needing Pro Support. Our tax pros would be able to help as well should you choose that service.

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