Partial year residency

[J_HLEHMAN]

For a person who lived in Pennsylvania part of the year, lived in New Jersey part of the year but worked in New Jersey ALL year - how do I handle this on the state tax returns for PA and NJ? Thank you!

[Lion]

The part of the year he lived in NJ, everything will be allocated to NJ; the part of the year he lived in PA, everything will be allocated to PA. However, for the part of the year he lived in PA but worked in NJ, he will get a credit for that portion of NJ taxes on his PA return. How you accomplish that in your tax software is a question for your tech support.

Now that I wrote that, I wonder if NJ and PA have reciprocity... I don't currently file any NJ returns. Wait to see if you get a response from someone who has your situation!

[TAXNJ]

https://www.state.nj.us/treasury/tax...nt/1040nri.pdf. See page 2

also

https://www.state.nj.us/treasury/tax...gi-ee/git6.pdf

[ATSMAN]

I can tell you from personal experience doing a 2 state part year and 1 state non resident takes a lot of time if the income is not clearly allocated. So charge accordingly. As Lion suggested the tax software or support may help you do it correctly, but double check your allocations and especially the credit for taxes paid to other jurisdiction. If I remember correctly I was getting an incorrect figure on the tax credit.

[TAXNJ]

I can tell you from personal experience doing a 2 state part year and 1 state non resident takes a lot of time if the income is not clearly allocated. So charge accordingly. As Lion suggested the tax software or support may help you do it correctly, but double check your allocations and especially the credit for taxes paid to other jurisdiction. If I remember correctly I was getting an incorrect figure on the tax credit.

Hopefully a Tax Professional follows the instructions and available worksheets/charts provided by the applicable tax agency which the “software” should support/follow.

[Lion]

For states I know well (CT & NY) and know their allocation worksheets well, I start data entry in the software and then follow the flow from federal to states and from state to state as part of my proofreading. But when a new-to-me state combo crops up, I start with a Excel worksheet with states, dates, amounts, etc., for each spouse, so I know what I expect the state returns and their allocation schedules to look like. An early mentor at an HRB Premium office where/when we didn't have any other software had me draw timelines to map out their resident locations and work locations by date.

[ATSMAN]

That is why I said it takes time to do it right and charge accordingly. I still remember one client stormed out of my office when he got the invoice.

[TAXNJ]

……Now that I wrote that, I wonder if NJ and PA have reciprocity... I don't currently file any NJ returns. Wait to see if you get a response from someone who has your situation!

Pennsylvania Residents
As a result of the Reciprocal Personal Income Tax Agreement between Pennsylvania and New Jersey, compensation paid to Pennsylvania residents employed in New Jersey is not subject to New Jersey Income Tax. Compensation means salaries, wages, tips, fees, com- missions, bonuses, and other remuneration received for services rendered as an employee…….

…..The Reciprocal Agreement covers compensation only. If you are self-employed or receive other income (for example, gain from sale of property) that is taxable in both states, you must file a New Jersey nonresident return and report the income received.

Source:
https://www.state.nj.us/treasury/tax...nt/1040nri.pdf. See page 31