How do I claim the Pennsylvania Credit for Taxes Paid to Another State?

Pennsylvania residents who pay income tax to another state on income that is also taxed by Pennsylvania may qualify for a Credit for Taxes Paid to Another State. This credit helps prevent the same income from being taxed twice.

Pennsylvania Return > Credits > Credit for Taxes Paid to Another State

Who May Qualify?

You may qualify for this credit if:

• You were a Pennsylvania resident during the tax year.
• You paid income tax to another state.
• The same income is taxable on both your Pennsylvania return and the other state's return.

Common examples include:

• Wages earned in another state.
• Business income earned in another state.
• Partnership income taxed by another state.
• S Corporation income taxed by another state.
• Pass-through entity income reported on a Schedule K-1.

What Information Is Needed to Claim the Credit?

State Taxed by Another State

Select the state where the income was taxed.

Only states that imposed an income tax on the income may qualify for this credit.

Income Taxed by Both States

Enter the amount of income that was taxed by both:

• Pennsylvania
• The other state

Only income taxed by both jurisdictions should be included.

Tax Paid to the Other State

Enter the amount of income tax paid to the other state on income that is also taxed by Pennsylvania.

You may need information from:

• The other state's tax return.
• Forms W-2 showing state withholding.
• Schedule K-1 forms.
• Tax payment records.
• Other supporting documentation.

What Documentation Should I Keep?

Keep copies of documents supporting the credit, including:

• The other state's income tax return.
• Forms W-2 showing state withholding.
• Schedules K-1.
• Tax payment records.
• Other state tax documents.

Pennsylvania may request documentation supporting the credit claimed.

Are There Any Limitations?

The allowable credit cannot exceed the lesser of:

• The income tax paid to the other state; or
• The Pennsylvania tax attributable to the same income.

The allowable credit is calculated based on the information entered on the return.

How Does This Affect My Return?

The Credit for Taxes Paid to Another State may:

• Reduce Pennsylvania tax liability.
• Increase a Pennsylvania refund.
• Reduce the balance due on the return.
• Help prevent double taxation of the same income.

Important Information

• This credit is generally available only to Pennsylvania residents.
• The income must be taxed by both Pennsylvania and the other state.
• Income taxed only by another state does not qualify.
• The allowable credit may be less than the amount of tax paid to the other state due to Pennsylvania credit limitations.
• Supporting documentation should be retained with your tax records.

Reciprocal Agreement States

Pennsylvania has reciprocal tax agreements with:

• Indiana
• Maryland
• New Jersey
• Ohio
• Virginia
• West Virginia

Pennsylvania residents who earn wage income in these states generally do not qualify for this credit on that income because the reciprocal agreement prevents double taxation.

Additional Information

Use the actual tax liability from the other state's return when determining the amount of tax paid to the other state. State withholding alone may not equal the final tax liability.