PENNSYLVANIA
separate property state

 

Military Income:   Fully taxable if stationed in the state.  Not taxable if stationed outside the state.  If military member is claiming a refund, they must complete a resident return and attach a copy of their military orders.  If they have filed for exempt status and had no withholding, they do not have to file a return. 

Military Filing Requirement:  No, if no tax withheld a return does not have to be filed to maintain residency.

Military Spouse Residency Relief Act Service member in state in compliance with military orders. Spouse in state solely to be with service member. Spouse must be a resident of same state as service member.

Forms Used:            

Filing Status:  Can file jointly or separately.  If one spouse is a resident and the other a nonresident, a separate return MUST be filed.  If couple choose to file jointly, they must file as residents and all income will be taxed.  If a non-military spouse or taxpayer meets all of the following three requirements their nonresident income (income earned in some other state) will not be taxed by Pennsylvania:

Attach Copy of Federal Return:  No.

Not Taxed:

Other State Tax Credit:  Available.  Attach Pennsylvania Schedule G and copy of other return.   

Reciprocity States Indiana, Maryland, New Jersey, Ohio, Virginia, and West Virginia.

Where to Mail:
Refunds: Tax Due:
PA Dept of Revenue
REFUND/CREDIT Requested
3 Revenue Place
Harrisburg, PA  17129-0003
PA Dept of Revenue
PAYMENT ENCLOSED
1 Revenue Place
Harrisburg, PA  17129-0001
Forms: 1-888-728-2937 Website:  www.revenue.state.pa.us
General Information1-888-728-2937  
Other Info:  

Bureau Individual Taxes
Taxpayer Inquiry Unit
5th Floor, Strawberry Square
Harrisburg, PA  17128

 
E-filing Info:  Retain PA 8453 for 3 years.  The following CANNOT be filed electronically:
  • Married filing separate returns
Tax Form Instructions:
Resident Instructions Non-Resident Instructions

 

Filing Status Scenarios

1.  Taxpayer and Spouse Residents (Use also for Single Taxpayer)
2.  Taxpayer and Spouse Different States of Residence
3.  Taxpayer and Spouse Non-Residents
4.  Taxpayer Non-Resident - Spouse Part-Year Resident
5.  Taxpayer Married or Single - Resident but Income from Other State
6.  Amended Return

 

1.  Taxpayer and Spouse Residents (Use also for Single Taxpayer) - Taxpayer and spouse are both Pennsylvania residents, lived at their present location all year, and one or both had income.

Main Info Screen.

 

W-2 Form. Pennsylvania does not tax military income when stationed outside the state. To exclude the military income properly you must check the Military box on the bottom of the W-2 form for the military member's income.

Pennsylvania 40 Form.  A joint resident Pennsylvania income tax return is prepared.  You must enter the School Code and District. Military personnel should use the school district code for the domicile of their spouse (if the spouse lives in Pennsylvania), their parents (if entering the military while they are domiciled in Pennsylvania), or the code for the school district in which they live while on federal active military duty while stationed in Pennsylvania (if a PA resident). Look up codes. Pennsylvania residents not living in the state should use 99999.

 

Complete all other fields and forms with red or required information.  If this return is e-filed, tell the taxpayer that they must send in a copy of their military orders to the state of Pennsylvania to show that they are stationed outside the state of Pennsylvania.  They only have to do this once, if they have already sent a copy the state will keep it on file.  Otherwise do not e-file the return and have the taxpayer mail the return.

2.  Taxpayer and Spouse - Different States of Residence - Taxpayer or spouse is a resident of Pennsylvania, while the other member is a resident of a different state.  A Pennsylvania income tax return must be prepared due to the taxpayer or spouse having Pennsylvania earned income.

Main Info Screen.  Can file jointly or separately.  If one spouse is a resident and the other a nonresident, a separate return MUST be filed.  If couple choose to file jointly, they must file as residents and all income will be taxed. For this example, the taxpayer is a resident of Pennsylvania while the spouse is a resident of North Dakota.

 

W-2 Form.  Pennsylvania does not tax military income when stationed outside the state.  To exclude the military income properly you must check the Military box on the bottom of the W-2 form for the military member's income.

Resident/Nonresident Worksheet.  Review form to ensure income is split correctly for the appropriate states.

 

Pennsylvania 40 Form.   A married filing separately resident Pennsylvania income tax return should be prepared.  You must enter the School Code and District.  Enter 99999 for residents not living in the state.  Or look up codes.  As Pennsylvania does not tax military income when stationed outside the state, the military members income is not taxable.  If you check the Military Box on the W-2, as indicated above, the military members income will not be listed on line 1a as in the following example.

 

Review the remainder of the Pennsylvania Form 40 to ensure the other state income is being subtracted correctly.  Complete all other fields and forms with red or required information.  A married filing separate Pennsylvania tax return can not be e-filed.  The return must be mailed.

3.  Taxpayer and Spouse Non-Residents - Taxpayer and spouse are residents of a different state.  The spouse and taxpayer must file a Pennsylvania tax return due to one or both having Pennsylvania earned income.

Main Info Screen.  If both members are residents of another state, the parties should file as nonresidents.  For this example, the taxpayer and spouse are both residents of Wisconsin but must file a Pennsylvania income tax return because the spouse worked in Pennsylvania.

 

Resident/Nonresident Worksheet.  In order to comply with the Military Spouse Residency Relief Act, the nonresident military spouse's wages are set to zero as in the example. Link to a scratch pad from the indicated field.

 

Using the example, enter the nonresident spouse's wages on the scratch pad. Ensure the wages are entered as a negative number

Pennsylvania Form 40.   A joint non-resident Pennsylvania income tax return should be prepared.  This form will subtract out the other-states (Wisconsin) income.  You must enter the School Code and District.  Look up codes.

 

Review the remainder of the Pennsylvania Form 40 to ensure the other state income is being subtracted correctly.  Complete all other fields and forms with red or required information.

4.  Taxpayer Non-Resident - Spouse Part-Year Resident - Taxpayer and spouse moved to or from Pennsylvania during the tax year.  The taxpayer is a resident of a different state.  The Spouse is a part-year resident of Pennsylvania.  The Spouse and taxpayer must file a Pennsylvania tax return due to one or both of them having Pennsylvania earned income and possibly income from another state.

Main Info Screen.  For this example, the taxpayer is in the military and a resident of Indiana.  The taxpayer and spouse moved from Pennsylvania to North Dakota during the year.  The spouse was a resident of Pennsylvania but is now changing their residency to North Dakota for tax purposes.  The spouse therefore was a part-year resident of both Pennsylvania and North Dakota and must file a Pennsylvania income tax return because the spouse worked in Pennsylvania.

Part Year Resident States Worksheet.  Review form to ensure income is split correctly for the appropriate states.

 

Pennsylvania Form 40.   A joint part-year resident Pennsylvania income tax return should be prepared. You must enter the dates of residency.  You must do a married filing separately for whichever taxpayer was the Pennsylvania resident. You must enter the School Code and District.  Enter 99999 for residents not living in the state.  Or look up codes This form is used to subtract out all the other-states (Indiana and North Dakota) income. 

 

Review the remainder of the Pennsylvania Form 40 to ensure the other state income is being subtracted correctly.  Complete all other fields and forms with red or required information.

5.  Married or Single Military Resident of Pennsylvania with Income from Another State  - Taxpayer is single.  The taxpayer must file a Pennsylvania tax return due to him or her having Pennsylvania earned income.

Main Info Screen.  For this example the taxpayer is a military member stationed in North Dakota but a resident of Pennsylvania.  The taxpayer had a job in North Dakota therefore having North Dakota earned income.

 

W-2 Form.  Pennsylvania does not tax military income when stationed outside the state.  To exclude the military income properly you must check the Military box on the bottom of the W-2 form for the military member's income.

Resident/Nonresident Worksheet.  Review form to ensure income is split correctly for the appropriate states.

 

Pennsylvania Form 40.  A resident Pennsylvania income tax return is prepared.  Pennsylvania taxes residents on income from all sources, even income earned while living in another state (North Dakota as in this example).  You must enter the School Code and District.  Enter 99999 for residents not living in the state.  Or look up codes.   As Pennsylvania does not tax military income when stationed outside the state, the military members income is not taxable.  If you check the Military Box on the W-2, as indicated above, the military members income will not be listed on line 1a as in the following example.

Pennsylvania Schedule G-S, Credit for Income Tax Paid by PA Residents to Other States.  Pennsylvania Schedule G -Smust be added to the tax return and prepared to give a credit for taxes paid to another state (North Dakota).  You must complete the other states tax return first, then enter the amount of tax from the other states tax return.  This is not the amount the taxpayer had withheld from his or her pay but the amount of tax imposed on them.  Line 2a is the amount of income earned in the other state (North Dakota).  Line 4a and b is the amount of income tax liability on the (North Dakota) tax return.  A copy of the other state's return must be attached to the Pennsylvania return if not e-filed.

 

Complete all other fields and forms with red or required information.  If this return is e-filed, tell the taxpayer that they must send in a copy of their military orders to the state of Pennsylvania to show that they are stationed outside the state of Pennsylvania.  They only have to do this once, if they have already sent a copy the state will keep it on file.  Otherwise do not e-file the return and have the taxpayer mail the return.

6.  Amended Return  - An amended Pennsylvania return must be filed because the taxpayer received new tax information after their Pennsylvania return was filed.
Federal 1040X Form.  Before making any changes to the tax return add the US 1040X form to the tax return.  You must check the box under Income and Deductions to lock in the entries in Column A - Original amount or as previously adjusted.

Add PA Sch 40-X for amended returns. Check the override entries box, as shown, prior to making any changes to the return.

Make whatever changes are required to the federal tax return.  For this example, a new W-2 was received.

Pennsylvania 40 - Pennsylvania Income Tax Return.  Check the box on the PA 40 to designate it as an amended return after all changes have been made to the return

Amended returns can not be e-filed.  The taxpayer must mail the federal 1040X and any state amended returns if required to be filed.