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Do I need to pay PA state taxes on the W-2 income made in WA, a non-income tax state?

Do I need to pay PA state taxes on the W-2 income made in WA, a non-income tax state? Topic: Pa papers
June 25, 2019 / By Fingall
Question: I changed jobs in the middle of the year, but worked remotely as a PA resident for all 2012. Hence, I received a W-2 from PA (with state taxes withheld, etc.) and a W-2 from WA (with no state income or tax withheld on boxes 15, 16, etc.). TurboTax pulled the PA income correctly from the first W-2, but didn't pull the WA income from the second W-2 into my PA return. Is this correct? Shouldn't I pay PA taxes on the income made in WA (a non-income tax state) if I lived in PA for all 2012? Thanks.
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Best Answers: Do I need to pay PA state taxes on the W-2 income made in WA, a non-income tax state?

Darcie Darcie | 8 days ago
W-2s don't come from the states, they come from your employers. Since you performed the work for the WA employer in PA, you are liable for PA income taxes on that income. Technically your employer should have withheld PA income taxes (your presence establishes a nexus for PA payroll taxes and withholding) but if they didn't, you must pay the taxes when you file your PA return. To get TT to "pull" the income into your PA return, you'll have to make phantom entries in the interview process as if the PA income was reported on the W-2 from the WA employer. You'll enter the amount of income and the state but of course no state withholding. You should file a paper return for PA and attach copies of the W-2s since they won't be showing the income from the WA employer.
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Darcie Originally Answered: Are fed income taxes on US citizens that earn income inside the US constitutional?
I didn't bother going to your links because as soon as I saw the name Larken Rose, I knew exactly what his argument is. Basically, based upon his misguided interpretation, he believes that section 861 of the Internal Revenue Code says that only income from outside the U.S. is taxable. Section 61(a) of the Internal Revenue Code states defines “gross income” (which is the starting point for the calculation of taxable income) as follows: “Except as otherwise provided in this subtitle, gross income means all income from whatever source derived....” The general rule, therefore, is that all income is included in gross income, unless there is a specific exception or exclusion in some other section of the Internal Revenue Code. (The reference to “this subtitle” is a reference to Subtitle A of the Internal Revenue, which is where the income tax are defined and imposed. Other subtitles relate to other kinds of taxes, such as the federal to estate and gift taxes, or to the enforcement and administration of taxes generally.) The regulations confirm that U.S. citizens (and residents) are taxed on all of their income, regardless of where the source is located, and so the source of income is irrelevant to U.S. citizens and residents. “In general, all citizens of the United States, wherever resident, and all resident alien individuals are liable to the income taxes imposed by the Code whether the income is received from sources within or without the United States.” Treas. Reg. § 1.1-1(b). The general rule, therefore, is that all income is included in gross income, regardless of the source of the income. In Great-West Life Assurance Co. v. United States, 230 Ct. Cl. 477, 678 F.2d 180, 183 (1982) “The determination of where income is derived or ‘sourced’ is generally of no moment to either United States citizens or United States corporations, for such persons are subject to tax under section 1 and section 11, respectively, on their worldwide income.” In Aiello v. Commissioner, T.C. Memo. 1995-40, “Petitioner also contends that no Federal statute imposes a tax on the income of citizens or residents of the United States that is derived from sources within the United States. Instead, petitioner asserts that Federal income taxes are excise taxes imposed only on the privilege of nonresident aliens and foreign corporations to receive income from sources within the United States. Petitioner’s argument is unclear. Apparently, petitioner believes that the only sources of income for purposes of section 61 are listed in section 861, that income from sources within the United States is taxed only to nonresident aliens and foreign corporations pursuant to sections 871, 881, and 882, and that section 1461 is the only section of the Internal Revenue Code that makes anyone liable for the taxes imposed by sections 1 and 11. “Section 61(a) defines gross income generally as ‘all income from whatever source derived,’ including, but not limited to, compensation for services and interest. Sec. 61(a)(1), (4). Section 63 defines and explains the computation of section ‘taxable income’. Section 1 imposes an income tax on the taxable income of every individual who is a citizen or resident of the United States. Sec. 1.1-1(a)(1), Income Tax Regs.; see Habersham-Bey v. Commissioner, 78 T.C. 304, 309 (1982). “Under section 61(a)(1) and (4), petitioner clearly is required to include his wages, tokes, and interest in gross income.” Larken Rose and a dozen other tax protestors that have used this argument base their claims on a complete twisting of the Internal Revenue Code. The reason a judge will tell a jury not to refer to a portion of code is because jury members are not trained in interpreting law. It is the job of the court to tell the jurors what the law is and what it means. This is to preclude the jury from rendering a bad decision based upon an incorrect interpretation of the law. Basically, all arguments claiming that section 861 says that U.S. citizens cannot be taxed on their income earned in the U.S. are specious and without merit. Here is one more court case reference. In Takaba v. Commissioner, 119 T.C. 18 (2002), (sanctions of $15,000 imposed against the taxpayer and costs of $10,500 imposed against his lawyer for frivolous proceedings.) “Moreover, even if Mr. Sulla [taxpayer’s counsel] had not been presented with sufficient evidence contradicting the 861 argument, the 861 argument, on its face, is inherently improbable, because it leads to conclusions that defy common sense; i.e., U.S. citizens and residents earning income within the United States are taxable only on income earned from possessions, corporations, and the Federal Government, and the vast amount of wages and interest paid to U.S. citizens and residents is not taxable under the Internal Revenue Code. We agree with what the Court of Appeals for the Tenth Circuit said in Charczuk v. Commissioner, 771 F.2d 471, 475 (10th Cir. 1985), affg. T.C. Memo. 1983-433, before imposing costs on a taxpayer’s counsel under 28 U.S.C. sec. 1927: ‘Courts are in no way obligated to tolerate arguments that thoroughly defy common sense.’ The conclusions to be drawn from the 861 argument thoroughly defy common sense. We find that Mr. Sulla acted recklessly in making the 861 argument and, thus, he acted in bad faith.”
Darcie Originally Answered: Are fed income taxes on US citizens that earn income inside the US constitutional?
I didn't bother to go to the links you had, because there is no basis for claiming that the federal government has no right to impose and collect an income tax. As others have pointed out, the 16th Amendment makes it clear that the government has this right. What the 16th Amendment really does, actually, is simply clarifies that Congress has this right, and it need not apportion the taxes among the states according to population. The claims that it is invalid usually speak of alleged irregularities in the ratification process. These irregularities are usually simply minor differences in wording or even punctuation among the final forms ratified by the states. Courts have universally rejected this argument, as the differences are trivial, and amendments are almost always ratified with slight differences among the states. In 1955, the Supreme Court made clear that income meant any increase in income, from any source, unless specifically exempted by Congress. I'm sorry you wasted all that time going through those sources, as they are pointless and worthless. We all have to pay our taxes.

Azarael Azarael
You report it, but PA may not tax you b/c the income was sourced in a non tax state. It depends on the particular tax laws of PA, I would consult a professional to be sure. Are you doing a full year resident return? Maybe TT thinks you were a part year resident?
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Wendi Wendi
depends on your state's rules some states require its residents to pay on all income from all sources as a non resident only the income based on the time in that state more than likely as a PA resident, ALL income, including a non taxable state will be taxable
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Wendi Originally Answered: State personal Income tax rate?
Mississippi collects income taxes from its residents utilizing three tax brackets. For single taxpayers: -- 3% on the first $5,000 of taxable income -- 4% on taxable income between $5,001 and $10,000 -- 5% on taxable income of $10,001 and above. http://www.mstc.state.ms.us/taxareas/ind... WHO SHOULD FILE? You should file a Mississippi Income Tax Return if any of the following statements apply to you: You have Mississippi income tax withheld from your wages or your gambling winnings. You are a Non-Resident or Part-Year Resident with income taxed by Mississippi. You are a Mississippi resident employed in a foreign country on a temporary or transitory basis. Your total gross income is subject to Mississippi income tax. There is no foreign income exclusion for Mississippi income taxes. You are a Mississippi resident working out of state (employee of interstate carriers, construction worker, salesman, offshore worker, etc.). You must file a Mississippi Resident return and report total gross income, regardless of the source. You are a single resident and have gross income in excess of $8,300 plus $1500 for each dependent. You are a married resident and you and your spouse have gross income in excess of $16,000 plus $1500 for each dependent. You are a minor having gross income in excess of $8300. You are the survivor or representative of a deceased taxpayer. You must file a return for the taxpayer who died during the tax year or before the return was filed. A return for the deceased taxpayer should be filed on the form which would have been appropriate had he or she lived. Enter the word "deceased" and the date of death after the decedent’s name on the return. EXEMPTIONS Mississippi allows certain exemption amounts depending upon your filing status and other criteria. Below is listed a chart of all the exemptions allowed for Mississippi income tax. Married Filing Joint or Combined* $12,000 Married Spouse Deceased $12,000 Married Filing Separate* $ 6,000 (exactly 1/2 of the $12,000) Head of Family $ 8,000 (with at least 1 dependent) Single $ 6,000 Dependent, other than self or spouse** $ 1,500 Taxpayer over 65 $ 1,500 Spouse over 65 $ 1,500 Taxpayer blind $ 1,500 Spouse blind $ 1,500 *For Married Filing Joint or Combined returns, the exemption amount may be divided between the spouses in any matter they choose. For Married Filing Separate, any unused portion of the $6,000 exemption amount by one spouse on his/her separate return cannot be used by the other spouse on his/her separate return. **For each dependent claimed, you must provide the name, social security number and relationship of that dependent to you. A dependent is a relative or other person who qualifies for federal income tax purposes as a dependent of the taxpayer. A dependency exemption is not authorized for yourself or your spouse. If you have filed as Head of Family, you must have at least one qualifying dependent listed. DEDUCTIONS You may choose to either itemize individual non-business deductions or claim the standard deduction for your filing status, whichever provides the greater tax benefit. Mississippi allows you to use the same itemized deductions for state income tax purposes as you use for federal income tax purposes with one exception. State income taxes are not deductible on your itemized deduction schedule. An adjustment must be made for that exception. Mississippi does allow certain deduction amounts depending upon your filing status. Below is listed a chart of all the exemptions allowed for Mississippi income tax. Married Filing Joint or Combined $ 4,600 Married Spouse Deceased $ 4,600 Married Filing Separate $ 2,300 (exactly 1/2 of the $4,600) Head of Family $ 3,400 Single $ 2,300 For Married Filing Joint or Combined returns, the $4,600 standard deduction amount or the itemized deduction amount may be divided between the spouses in any matter they choose. For Married Filing Separate, any unused portion of the $2,300 standard deduction amount by one spouse on his/her separate return cannot be used by the other spouse on his/her separate return. TAX RATES Mississippi has a graduated tax rate. These rates are the same for individuals and businesses. There is no tax schedule for Mississippi income taxes. If you are looking to determine how much withholding should be taken out of your paycheck, look under Withholding Tax at the Withholding Tax Table. That should give you the information you are looking for. The graduated income tax rate is: 3% on the first $5,000 of taxable income. 4% on the next $5,000 of taxable income. 5% on all taxable income over $10,000. If filing a combined return (both spouses work), each spouse can calculate their tax liability separately and add the results. Example: John is single and has taxable income of $23,000. His tax liability will be: $ 5,000 X 3% = $ 150 $ 5,000 X 4% = $ 200 $13,000 X 5% = $ 650 Total Tax Liability $1,000 John marries Mary who also has taxable income of $20,000. Their tax liability will be: Taxpayer Spouse Total Tax Rate Tax Liability $5000 + $5000 = $10,000 X 3% = $ 300 $5000 + $5000 = $10,000 X 4% = $ 400 $13,000 + $10,000 = $23,000 X 5% = $1,150 Total Tax Liability = $1,850 Married couples filing a combined return (i.e., both spouses work) can opt to have each spouse calculate tax liability separately and add the results.

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