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emc011075
emc011075, Tax adviser
Category: Tax
Satisfied Customers: 2750
Experience:  IRS licensed Enrolled Agent and tax instructor
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I live in Pennsylvania and work in Delaware. My spouse does

Customer Question

I live in Pennsylvania and work in Delaware. My spouse does not work in Pennsylvania. Somehow I always get charged more taxes than I would if I lived and worked in Delaware. As I have to pay taxes on my income to Pennsylvania why should I end up owing taxes to Delaware every year. Is that not taxing me twice? Why should Delaware have any right to the income my husband makes?
Submitted: 1 year ago.
Category: Tax
Expert:  emc011075 replied 1 year ago.

Hi. My name is ***** ***** I will be happy to help you.

If you or your husband work in one state and reside in another state both states have right to tax the income. One for working there and another one for residing there. Many states have a reciprocity agreement with each other that eliminate the need to file tax return for both states. However, there's no reciprocity agreement between PA and DE. You have to file tax returns in both states however you can claim credit for taxes paid in DE on your PA tax return. To claim the credit you will have to attach Schedule G-S or G-L to your PA tax return along with a copy of DE tax return and W2 with DE withholding.

https://revenue-pa.custhelp.com/app/answers/detail/a_id/271/kw/reciprocal%20with%20delaware

Expert:  emc011075 replied 1 year ago.

I see you read my respond. Do you have any questions? Is there anything else I can help you with today?

Expert:  emc011075 replied 1 year ago.

And if this answered your question, please take a moment to rate my response so that I may receive credit for assisting you today. However, if you need clarification, or want to discuss this issue further, let me know. Thank you.

Customer: replied 1 year ago.
I understand that I have to file taxes in both states; however, I do not understand how Delaware is able to tax me on the basis of income my husband earns when he has absolutely no connection to Delaware and we don't live there. I end up paying more money than people I work with who both live and work in Delaware. And it happens every year. I don't see how that is right.
Expert:  emc011075 replied 1 year ago.

The fact that your husband work in DE gives DE rights tax the income he earned in DE. PA has flat 3.07% tax rate, DE has progressive tax rate, which means the more you make the more you pay. Yes, it is possible that if both of you resided in DE you would pay less in taxes. Every state makes its own tax rules. If he worked for instance in MD, it would be a completely different story.

Expert:  emc011075 replied 1 year ago.

Depending where you live in PA, you may also be subject to School district and/or city local taxes that DE doesn't have. Most likely if you combine all your PA taxes, the tax rate is higher than what you would pay if you resided in DE. It also depends on type of income. Certain income that is taxed in PA may not be taxed in DE. When to comes to state income tax you cannot compare apples to apples, it is more like comparing apples to oranges. Some state, for instance don't have state income tax at all (TX, FL) and in some states you would pay 7 - 9% (CA, OH for instance).

Expert:  emc011075 replied 1 year ago.

Your friends living and working DE are subject to completely different tax rules than you living in PA and working in DE.

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