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State tax Pennsylvania and Delaware

My daughter lives in Delaware.

She had 2 jobs in 2007.

Job 1 was in PA and she had PA state income tax witheld.

Job 2 was also in PA and she had DE state taxes withheld.

Am I correct in that both wages from jobs 1 & 2 are subject to PA taxes because she derived the income from PA and that both streams of income are subject to DE income tax because she is a resident of DE with a credit for taxes paid to PA?

If this is correct, is the credit allowed for the Delaware return the PA withholding taxes or the actual tax liability shown on the 2007 PA state tax return?

Thanks for any help.

Reply to
rdsandy
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Your daughter will have to file a non-resident Pennsylvania state income tax return, reporting the income from both jobs. She will likely end up with tax due on the PA return because no PA tax was withheld on Job 2.

When she files her Delaware resident income tax return, she has to report the income from both jobs but she can claim a credit for the tax liability imposed by PA against the DE tax. The amount she can claim is the amount of PA income tax withheld plus the tax due on the PA return. She will have to attach the PA return to her DE return in order to claim the credit.

The result is that she will not be double-taxed on both jobs.

BTW, the Job 2 employer should be withholding PA income tax because of the lack of a reciprocal agreement between PA and DE. She should talk to her employer about that.

Reply to
D.F. Manno

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