State Taxes: How to Handle Part-Year Returns in 2 States?
I have a state income tax question about part-year returns when living in two different states. I was employed by the same employer throughout the year, however, I was lucky enough to get on to a work-at-home program, so I started working from home and moved back to PA. So, from 1/1/08 - 5/14/08, I live in Virginia and 5/15/08 to 12/31/08 I lived in PA -- I recently finished the state income tax return for part year, but realized that I never changed my withdrawing status from my employer. So, my state tax was being withheld as VA resident for the entire year. I changed it for the start of 2009. Now, when I finished the returns, i'm getting a hefty refund from VA and need to pay a decent amount to PA. I am curious if my liability for tax based on where I lived had anything to do with my how my employer withheld taxes. That is, would it look 'fishy' if i'm to get 60-65% refund of my VA state taxes paid and then pay PA almost $1800 without ever filing with my employer that I moved to PA. (Well, I did change my address with HR, but not my tax information). Any input is appreciated. I don't want to file until i'm certain this is acceptable. I'm curious that, really, how do they determine if i'm truthful about my move dates and where i'm living, etc. If it helps, my drivers license was and has always been from PA. I moved to VA back in 2005 and never changed it -- I know, that's not good, but I always figured my residence in VA was temporary. I guess it took ~ 3 years to get back to PA, heh. Thanks. In reply to ernesthinton: Would you mind pointing me to information regarding the 6 months? I noticed VA has it that if you were a resident of VA for more then 183 days, then you're considered a full resident for tax purposes, but I could not find an equivalent definition in PA. In the instruction booklet for PA form 40, it states that you are a part-year resident if you moved into or out of PA during the year, and that's all it says, nothing about specific amount of time spent in/out of PA. I'm not trying to argue with you, just trying to get my facts straight. Thank you.
Public Comments
- YOOY: Sounds like you did everything OK except a little administration details. No big deal. If the income reported is as earned in each state you are fine. The back and forth is OK and you were wise, I think to keep PA as your home state. If you still have lingering doubts call PA dept of revenue and run it by them. The big/small refunds are common is this scenario and happen all the time. Get all your ducks in a row now and make sure your employer with holds for the proper state. This advice was prepared based on our understanding of the tax law in effect at the time it was written as it applies to the facts that you provided. Click on my profile to read more. Errol Quinn Enrolled Agent Master Tax Advisor
- It appears that since you lived for more than 6 months in pennsylvania, you should be filing a permanent resident of Pennsylvania, and you are a part year Virginia Resident.
