I know somebody who lives in New York but works in Pennsylvania. What kind of taxes would be charged?
Other - Taxes - 3 Answers
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1 :
TP will pay to both entities. Eg, city and state tax in PA and city and state tax in NY. NY, since he's a resident, may give him credit for money paid to another jurisdiction.
2 :
you will need to file state returns in both states, one will be a non resident return for the state you do not reside in there will be taxes in both states however most often, there are credits on one state for taxes paid to another state you definitely will need help with this unless you know something about tax preparation
3 :
Both states; plus federal, Socail Security, Medicare. NY and PA do not have reciprocal income agreements so income tax withholding should be withheld from the state where the employee works (PA), plus any applicable localities. Because there are no reciprocal agreements, NY will also want their money, even though it's not earned in the state. To alleviate double taxation, the employee will get a tax credit for taxes paid to PA. But, due to the higher income tax rate in NY, there will be tax shortfall in NY. See if the employer can withhold taxes for both states; otherwise, the employee may have to make quarterly estimated payments to NY to cover the difference. The employee will have file tax returns for federal, PA (nonresident return reporting only earnings earned there); and NY return (resident return reporting everything plus a credit for taxes paid to PA)
