Discussion:Who do you pay state taxes to?
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Discussion Forum Index --> Consumer Questions --> Who do you pay state taxes to?
| 26 January 2006 | |
| A 20 year old student lives in Michigan and worked the summer in Ohio. Ohio did not withold any taxes. Who should she pay state taxes to? | |
| 26 January 2006 | |
| Calculate the taxes based on each state tax rules. If you owe Ohio, you pay Ohio. If you owe Michigan, you pay Michigan. If you owe both, you pay both. | |
| 26 January 2006 | |
| Shouldn't the answer be: how much was earned in OH and what are the filing requirements in OH? | |
| 27 January 2006 | |
| Also, find out what if any credits are allowed. Some states offer credit for taxes paid to another state. | |
DR BRISKET (talk|edits) said: | 27 January 2006 |
| The student would have to file a non-resident Ohio income tax return. If she earned enough to generate taxable income, she would need to remit her Ohio liability with her Ohio tax return. If she also had earned wages in Michigan, and generated a Michigan tax liability, she would be entitled to claim a credit for her tax paid to Ohio. | |
| 27 January 2006 | |
| Michigan has reciprocity agreements with most of its neighboring states including Ohio.
Under the general terms of each reciprocal agreement, a Michigan resident will be, in effect, exempt from any income tax imposed by a reciprocal state on salaries, wages and commissions earned for personal services performed in the reciprocal state. Conversely, a nonresident from a reciprocal state who earns compensation for services performed in Michigan will be, in effect, exempt from Michigan income tax. The nonresident from a reciprocal state need not file a Michigan income tax return if he or she has no other income subject to tax in Michigan. Long story short - a MI resident working in Ohio does not pay Ohio tax, but rather MI tax on the earned income from OH. | |
| 27 January 2006 | |
| The practical effect of Scot1's explanation is that:
If the student was a full-year resident of Michigan in 2005, and had no taxable income other than wages, all she needs to do regarding Ohio is file the very short Ohio Form IT 10, saying she doesn't owe Ohio tax. | |
Logistics09 (talk|edits) said: | 2 March 2009 |
| So guys, I know I am bringing up a new subject and new states but, I really need some guidance...
I have employees working in NJ but living in PA. I know they are not subject to NJ state withholding but what about the NJ localities? Everything I read says that localities are exempt from the recipricol agreement and employees are subject to those withholdings, I guess I am just looking for confirmation that I am on the right track..... | |
| 2 March 2009 | |
| I'm pretty sure that there are no NJ local income taxes. What you read means that someone living in NJ and working in PA is still subject to PA locality taxes (e.g. Philadelphia wage tax or the 1% EIT in surrounding counties). | |
Logistics09 (talk|edits) said: | 2 March 2009 |
| So then when it is the other way and they live in PA but work in NJ they are not subject to the NJ localities? | |
Logistics09 (talk|edits) said: | 2 March 2009 |
| maybe I am wording that wrong...we call them localities but it is actually the NJ employee portions of State Disability, State Unemployment, Work Force and Family Leave Insurance | |
Death&Taxes (talk|edits) said: | 2 March 2009 |
| They are subject to those taxes, just as New Jerseyites pay PA Unemployment taxes. | |
Logistics09 (talk|edits) said: | 3 March 2009 |
| Thanks! | |
