Signing Bonus State Taxes - Which State collects ?

I'm a full time life long resident of New York state. I do have a small piece of property in Pennsylvania for which I was recenty paid a signing bonus of $1000.  Where do I file and declare this amount as rent income for state tax purposes?? I've never had a reason to file a Pennsylvania state income tax return before. Any income was always 100% earned in New York. Hopefully, I don't have to pay both...................

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Permalink Reply by Tom McConnell on February 5, 2013 at 3:36am

The gas company will likely 1099 the feds for the money they paid to you but not either state.  So PA will never know you received it and NY will never know either.  I wouldnt recommend not paying to either, but if you claimed it in NY, the likelyhood that PA will come after you for taxes on $1000 is never.  If it was a much higher number then you may have to plan your maneuvers a little more.  Pay it to NY and be done with it.  I am no tax professional but I hope this helps.

Permalink Reply by Thomas J Curran on February 5, 2013 at 3:53am

Thanks. The 1099 I got yesterday does show only my home address in New York, with no reference to my parcel in PA. Since I will file a 2012 NY state tax return, I guess it would make sense that NY could question why I will show a $1000 rent on my Fed return, but not on my NY one. In a way I hate to pay NY anything with them dragging their feet on Gas development here, but its also not worth the hassle to fight with the Tax dept. over a relatively few dollars.

Permalink Reply by Samuel J. Orr on February 5, 2013 at 4:08am

I think you are wrong. I believe that the income from real property located in Pennsylvania is taxed in Pennsylvania and only in Pennsylvania. By the way, I believe tax rate in Pa. is 3,1 %.  

Permalink Reply by Tom R on February 5, 2013 at 4:22am

     This is from the PA tax package section, "Instructions for Non-residents and Part Year Residents",

"Net Income or Loss from Rents, Royalties,Patents, and Copyrights"

As a non-resident, you must report your net income (and pay the PA income tax due) or loss from rental property located in Pennsylvania, and income from royalties......... for the use of your property in Pennsylvania.

    The bonus money is considered as a rental payment and reported on schedule E. You might be better off paying the PA tax as it is at a 3.07% rate and I expect NY is higher. Don't know if NY will want a piece of the action too, or if there is an exclusion for income from out of state.

   You might want to do a little searching at www.revenue.state.pa.us for fuller details.

     

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