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Old 02-29-2012, 12:06 PM
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Self employed out of state... HELP!

I live in PA but I worked as a self employed caregiver all last year in WV. I worked for several different people but I only received a 1099 from one of them. WV and PA have a reciprocal agreement but I can't figure out if it applies only people who have employers withholding tax or not. Do I have to file in WV as well as PA? If I do, which state am I actually supposed to pay the tax to?



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Old 03-01-2012, 03:44 AM
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“WV and PA have a reciprocal agreement but I can't figure out if it applies only people who have employers withholding tax or not.”----> The specific type of business taxes required may vary state by state depending on the type of business. Many self-employed business owners prefer, and may be required, to estimate and submit quarterly state taxes instead of paying them annually. These taxes may be reconciled on an annual basis if you have over or under-estimated the tax payment.
“ Do I have to file in WV as well as PA? “---->I don’t think so.In order to relieve taxpayers of double burden, many states have entered into state tax reciprocal agreements. If two states have a reciprocal agreement and an individual lives in one of those states and works in the other, the individual will only be subject to the income tax in the state where he lives., in PA in your case as a full year resident of PA, but a nonresident of WV. All states with reciprocal agreements have provisions that exempt an employee from having the tax withheld for the state where he works, but employers are not required to withhold the tax for the state where the employee lives. On the other hand, even though it is not mandatory, a great many employers will establish an account with a reciprocal state and withhold the tax for the employee's state of residence. For instance, in Pennsylvania the form not only declares that the employee is exempt from PA income tax withholding, but it authorizes the employer to withhold the tax for the state where the employee lives.So almost all states that have state tax reciprocal agreements have a form that an employee can complete that would make his income exempt from withholding of the income tax for the state where the employee works.
‘If I do, which state am I actually supposed to pay the tax to?”---->To PA as a full year resident of PA and as a non-resident of WV.



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Old 03-01-2012, 10:44 AM
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Thank you SO much!



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