PA/Philadelphia/NY/NYC tax Q - states and city

[Domadosolo]

For a Graduate Student, single, in Philadelphia, renting a place in Philadelphia all year, who has:
A) Income in New York City for a summer job, worked remotely, while continuing to rent a place in Philly.
B) Capital gains on sale of MF, occurred prior to NYC job
C) Expected capital gains distribution from MFs
D) Expected Teaching assistantship in Philadelphia

Q1) Will Income A will be allocated to NYC, subject NY state and NYC city tax? OR will it be subject to PA and Philadelphia city tax.
Q2) Will Income B(CG), and C(CGD) be subject solely to PA state tax?
Q3) Will B, and C be subject to Philadelphia city tax?
Q4) Will income D be allocated to PA/Philly and subject solely to PA and Philly tax?
Q5) What is the income threshold above which CG tax rates would change?


Thanks. why is it so complicated?

[Duckie]

For a Graduate Student, single, in Philadelphia, renting a place in Philadelphia all year,

Where is your official residence? Which state issues your driver's license? Where do you vote? Students are not always residents of the state where they attend school.

Q1) Will Income A will be allocated to NYC, subject NY state and NYC city tax? OR will it be subject to PA and Philadelphia city tax.

Just to clarify, you worked remotely from Philadelphia for a job that was based in NYC?

When you filled out your W-4 what state was your address? When you looked at your pay stubs what state withheld taxes?

It looks like New York taxes remote workers using the "convenience rule". See here.

Q2) Will Income B(CG), and C(CGD) be subject solely to PA state tax?

If you never resided in NY you should not have to pay NY state taxes on B and C. But if NY taxes remote workers like you, B and C may affect your NY tax bracket. See the answer to Q4.

Q3) Will B, and C be subject to Philadelphia city tax?

If you were were living in Philadelphia all year, then probably yes. You'll need to read up on the state and local tax rules.

Q4) Will income D be allocated to PA/Philly and subject solely to PA and Philly tax?

It depends on how non-resident out-of-state income is taxed in NY. Some states ignore non-resident out-of-state income completely and other states include it in such a way that the state tax bracket is higher. The out-of-state income is not taxed specifically, but with the bracket being higher it increases the taxes to a degree.

Q5) What is the income threshold above which CG tax rates would change?

See the table here. These only apply to long-term gains/distributions.

You need to download the New York and Pennsylvania state tax forms and instructions.

[Domadosolo]

Where is your official residence? Which state issues your driver's license? Where do you vote? Students are not always residents of the state where they attend school.

-PA, except DL, as there was no need to renew as there is no car.

Q1) Will Income A will be allocated to NYC, subject NY state and NYC city tax? OR will it be subject to PA and Philadelphia city tax.

Just to clarify, you worked remotely from Philadelphia for a job that was based in NYC?

-Yes

When you filled out your W-4 what state was your address? When you looked at your pay stubs what state withheld taxes?

- Getting copies, but I believe it was PA

It looks like New York taxes remote workers using the "convenience rule". See here.

-ugh!

Q2) Will Income B(CG), and C(CGD) be subject solely to PA state tax?

If you never resided in NY you should not have to pay NY state taxes on B and C. But if NY taxes remote workers like you, B and C may affect your NY tax bracket. See the answer to Q4.

Q3) Will B, and C be subject to Philadelphia city tax?

If you were were living in Philadelphia all year, then probably yes. You'll need to read up on the state and local tax rules.

Q4) Will income D be allocated to PA/Philly and subject solely to PA and Philly tax?

It depends on how non-resident out-of-state income is taxed in NY. Some states ignore non-resident out-of-state income completely and other states include it in such a way that the state tax bracket is higher. The out-of-state income is not taxed specifically, but with the bracket being higher it increases the taxes to a degree.

Q5) What is the income threshold above which CG tax rates would change?

See the table here. These only apply to long-term gains/distributions.

You need to download the New York and Pennsylvania state tax forms and instructions.

Thank you for the other detailed responses.

[drzzzzz]

Philadelphia has a wage tax and that should already be coming out of your paycheck through your employer

Philadelphia also has a School Income Tax which basically only applies to dividends (not interest or capital gains)

Philadelphia also has a business privilege tax (on gross receipts and net profits) if you get a 1099 and file a schedule C for a business for which you would have to pay taxes

[grabiner]

Q4) Will income D be allocated to PA/Philly and subject solely to PA and Philly tax?

It depends on how non-resident out-of-state income is taxed in NY. Some states ignore non-resident out-of-state income completely and other states include it in such a way that the state tax bracket is higher. The out-of-state income is not taxed specifically, but with the bracket being higher it increases the taxes to a degree.

This is how NY handles non-resident tax. If your total income is $40K, and $20K of that is sourced to NY, you compute the tax on $40K, and your NY state tax is half that amount. (This is important because NY allows a lot of deductions; if you have $10K in deductions, you pay half the tax on taxable income of $30K, not the whole tax on taxable income of $10K.)