My brother's company is based in TX but has him working in PA. Does he have to pay PA state taxes?

Question

So my brother works for a company based in Texas and had only done work in Texas.  Last year, they sent him to Pennsylvania for most of the year to do some work up there.  They paid for his housing and expenses while he was up there.

Now, I'm not sure if he has to pay state income taxes in Pennsylvania.  I'm using TurboTax and it didn't prompt me to, but it never asked where the work was done, just where he lived.  According to the guidelines TurboTax has, his residency was in Texas.  

I've done taxes for years and have taken a few tax classes, but we never had to do state income taxes.  TurboTax has a $40 thing to download to help file them, but I want to make sure it's what I need before dropping that money on it.

I've done a lot of searching online and all I can find are people living in PA and working in other states or something like that, not the situation my brother is in.

shoredude2 · Accepted Answer

If he worked in Pennsylvania, the Commonwealth of Pennsylvania considers that a Pennsylvania source.  Every baseball player in the National League has to pay state income taxes to Pennsylvania for every game they play in Philadelphia and Pittsburgh.  That's even though the "source" of their income is their teams' home cities.

Also depending on which community he was working in, he may also be liable for a municipal income tax.  And TurboTax won't be able to help you out with that one since they don't handle them.

And anyone with any degree of intelligence can file a PA40, Pennsylvania's income tax return, by hand.  Pennsylvania has a flat tax.  And the only thing you can deduct is employee business expenses.  Paying TurboTax $40 for it would be way too much.

A Hunch · Answer

StephenW is correct.

I worked for a consulting firm = for the first 5 years they paid us via our home state.  We "knew" we were suppose to pay based on where we worked (what about the working time on the plan?) but none of us did.  
Then they started paying us based on where we actually worked and I would have to file taxes in 16 states or so.
- still never figure out where to allocate the working on a plane time.

? · Answer

If he worked in Pa, he owes taxes based on the income made in that state. Headquarters are meaningless. He should have state withholding in his w-2.

StephenWeinstein · Answer

Officially, if he worked in PA, then he has to pay PA taxes.

Unofficially, if his W-2 says only TX in the state wages box, and does not mention PA, then he might be able to get away with illegally failing to pay PA taxes.

If his W-2 says PA in the state wages box, then he has to pay PA taxes and cannot get away with not doing so.

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My brother's company is based in TX but has him working in PA. Does he have to pay PA state taxes?

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