Both states will want to tax you. Your tax home is where you maintain
a domicile, are registered to vote, etc. and you will probably want
to keep this as MA since you state that MA is your permanent residence
and you are staying in a rented place in PA. But be careful about voter
registration; that is one of the items that can be used to determine
your state of residence. OK, so if you and your spouse are MA residents,
you should file jointly as residents in MA and as nonresidents in PA.
Do the calculations on
the nonresident return first, and then the calculations on the resident
Typically, on a nonresident tax return, the calculations are effectively the following:
Report all your income (usually AGI from the Federal return). Call this
$X. Compute the PA state tax due on $X. Note that you follow the rules
for nonresidents in doing this, not the calculations used by PA residents.
Call the amount of tax you computed as $Y.
What part of the total income $X is attributable to PA sources? If this
amount is $Z, then you owe PA $Y times (Z/X).
On the resident return in MA, you will likely get some credit for
the taxes paid to PA, and this will reduce your MA tax burden.
Usually the maximum credit is limited to the lesser of actual tax
paid to PA and what you would have had to pay MA for the same
As far as withholding is concerned, your employer in PA will withhold
PA taxes as if you are a PA resident, but you can adjust the amount
via the PA equivalent of IRS Form W4 so as to account for any additional
tax that might be due because
you will be filing as a nonresident. Else you can pay estimated
taxes via the PA equivalent of IRS Form 1040ES. Similarly, your wife
can adjust her withholding to account for the MA taxes that you
will owe on the joint income, or you can pay estimated taxes to MA too.
Note that it is unlikely that your employer in Pennsylvania will withhold
Massachusetts taxes (and send them to Massachusetts) for you, e.g.
if it is a ma-and-pa store, but there may be special deals available if
your employer does business in both states, i.e. is a MA-and-PA store.