Resident/Part Year Resident

[JSK]

Hoping I can find some help here.  I have a client that got married last year so they are filing a married filing joint return.  The husband lived in PA since 2021.  The wife was a NY resident until they got married in 2022.  All of his earnings were from PA; all of her earnings were from NY.  She did not work at all after she moved to PA.  I entered her part-year resident info on the federal information worksheet.  Obviously, I have no problem with the federal return.  I even navigated NYS to only allocate the wages earned by the spouse to be picked up and taxed.  My issue is with the PA return.  It's taxing all of the spouse's wages.  I don't want to choose "Part Year Resident" because the taxpayer was a full year resident both in 2021 and 2022.  Any help/suggestions would be greatly appreciated.  Thank you.

[dkh]

Let's see if  @PATAX  can help you.   He might be taking Heidi for a walk this morning so may have to wait for a response.

[IRonMaN]

I think on Sundays he brings his Coke bottle glasses down to the car wash to get them extra clean for the week. 👓

[PATAX]

I haven't had one like this I think in many years. I checked PA tax books and went online and there is not much information there. A colleague I believe just prepared something similar like this with PA and Ohio. I called him but he doesn't work usually on Sunday. I'll try to call him tomorrow if you can't get the answer. But I think @Skylane  may know the answer to that since there was a similar question recently. Just wait a little bit and we will help you.

[BobKamman]

All I know is what I read in the instructions. 

"If you are a PA resident who does not have any PA income (loss) to report, you do not have to file a PA tax return, even if married to a person who must file a PA tax return."

"You and your spouse have the option to file separate returns. However, you and your spouse must file separate returns if: . . .

6. One of you is a PA resident and the other is not. However, you can file jointly if you both elect to file as PA residents and meet all other requirements for filing jointly."

[Skylane]

what a nice Sunday afternoon mess….

They file IT203 NY PY/NR as MFJ allocating only her income to NY (and showing dates of her residency. 
PA file MFJ and file credit for taxes paid to other jurisdictions (i forget the form number).

Check inst for IT203. The NY return will be partially affected by total family income but it should wash out claiming the COJ in PA. I don’t think she’s allowed to file NY as single.

[BobKamman]

Why are they filing MFJ for NY?  Why not just file her MFS for NY?  And she shouldn't need a tax credit for what she is paying to NY, if she doesn't even have to file in PA.  As I said in another thread, don't let MFJ be a knee-jerk reaction for every married client.  

[Skylane]

;

<<My issue is with the PA return.  It's taxing all of the spouse's wages. >>

The COJ  should offset the tax. NY rates are higher than PA.

[Skylane]

https://www.tax.ny.gov/pdf/2022/printable-pdfs/inc/it203i-2022.pdf
page 6 the exceptions on 7 don’t apply. 

edit: looks like NY can file MFS… on pg 7 

she has to pay tax to NY. Why would you not take a credit in your home state. Should work out better.

[BobKamman]

For that matter, why are you filing MFJ federal?  Does it save any money?  And you can't take a PA credit for tax paid to NY on income not taxed by PA.  And PA does not tax NY income while NY resident.  

[Skylane]

PA sch G-L allows the credit and you do report the income to PA

@Accountant-Man 

[JSK]

LOL That's exactly what I did.  I'm filing them MFJ for federal because it definitely benefits them for that.  I'm not claiming credits for taxes pd to other jurisdictions because that is not the case here.  I found the Gross Income worksheet for PA, and was able to make the spouse's PA income 0.  That gave me the result I like...may not be right, but it works lol.  I didn't want to have to file MFS for NY and PA, but I guess that's an option too.

[JSK]

Yes it saves them a lot of money so I definitely will fill MFJ for federal.  I was never going to claim credit for taxes pd to other jurisdictions because that is not the case here.  Neither tax was pd as a nonresident.  I was trying to avoid having to file a MFS for NY and PA, so I think I found a workaround by enter the spouse's income as $0 on the PA Gross Income Worksheet.  I know it's probably not right, but it works and gives me the results I know are right.