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[All values are approximate]

I moved to Pennsylvania, from Maine, last June 1st. I ceased all residency and employment in Maine on the 31st of May.

In doing my taxes this year (using HR Block Online), I noticed that while I only earned $4500 in Maine from Jan 1, 2013 - May 31, 2013, my Maine taxable income was $8250.

I started a new job in PA in the middle of August and just cleared $18000 for my yearly income for all my jobs, both in Maine and PA.

I don't really understand why my 'Maine Taxable Income' could be almost double what I actually earned from being employed by a company within the state. And it is the same my Federal Taxable Income (which i do understand is based on my AGI minus any deduction and exemptions).

But why would the calculation for my Maine T.I. include almost $14000 of income that i earned out-of-state, and after ceasing residency?

I did work for the same company in Maine (Jan 1 - May 31) and PA (Jun 1 - Aug 11) before starting my new job in PA (Aug 12), but i only earned an additional $2200 from that same company after moving to PA.

So even that couldn't account for the increased T.I. Does anyone have any insight into this type of situation?

  • 1
    Sounds like you work for a MA-and-PA store! See this question and its answer for some related information. – Dilip Sarwate Apr 2 '14 at 4:33
  • @Dilip ME....:-D – littleadv Apr 2 '14 at 11:03
  • @littleadv Ahhhh these Yankee states all sound alike to us MidWesterners.... When Baby gurgles Guam and Georgia, Then how I Nevada Pennsylvania.... – Dilip Sarwate Apr 2 '14 at 13:24
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I'm not sure how exactly the entries in H&R Block Online work, but you should be able to select the relevant State for each item of income. Check that you marked every income item properly - Main-sourced should be marked with ME, Pennsylvania-sourced should be marked with PA. If you mark your income as "US" or leave it empty, it will be assumed to be relevant to all States you're filing at, so check that you didn't do that.

By the way, you mentioned "that same company" - is it in Maine? If so - then it is Maine-sourced income, even if you're not resident in Maine.

In addition, see here for the Maine residency rules.

  • I will check on the marking of income items, that could possibly be the issue. the company is a national retailer, target, so their HQ is in Minnesota and they have stores in both ME and PA. – Joe Apr 2 '14 at 0:29
  • What do you mean that a company in Maine makes it Maine sourced income? I'm not sure I follow. You can definitely have employers with state A headquarters but when they pay workers for when performed in state B, that's generally state B income. – NL7 Apr 2 '14 at 3:36
  • @NL7 Undoubtedly it is state B income, but state A may also lay claim. Depending on the state laws, and where the employee is "registered" (i.e.: which office has him on his rosters). – littleadv Apr 2 '14 at 3:39
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You will need to look at your W-2 forms. You should have two forms one from company A, and one from Company B. Company A should specify two states (Maine and Pennsylvania) for state income and taxes. Keep your pay check stubs, especially the ones that bracket the time you moved. This may been needed to document exactly how much you earned in each state.

They would only know about the second state if you filled out a state version of the W-4. If Company A W-2 doesn't mention the second state, then they never knew about it. This is where the stubs will be valuable, because you will need to document how each of the boxes on the Company A W-2 need to be apportioned.

I also noticed that you mix the terms income and cleared. Realize that the numbers on the W-2 are income and tax statement. The income stated will always be greater than you take home pay.

Because Pennsylvania an Maine don't share a border, it is likely that your state taxes are based on where you work, not where you live. Plus you didn't commute from one to the other everyday. But you will need to look at both states to understand how they will split your income. Because you moved in the middle of the tax year, you will end up filing forms with both. You could end up with the situation that State A refunds money, and State B asks for more money.

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