XiDa1125 OP t1_j657p5x wrote on January 27, 2023 at 8:13 PM

Reply to comment by Robert_A_Bouie in Looking for Tax Prep/Accountant recommendations for living in Philly and working in Wilmington situation. by XiDa1125

I think my wife's company cuts a deal for the EY discount. I think I have it figured out for her since she's the one giving me tax problems.

She has to pay DE city (1.25%) and DE state taxes. She does not need to pay PA state tax, but has to pay tax on 401k contributions for PA (DE doesn't tax 401k contribtuions). She has to then pay Philly City tax but then we can file a request for refund for the 1.25% that we paid to Philly.

Crazy thing is that her company does not withhold her Wilmington nor Philly city taxes, pretty annoying. But I think based on the Wynne supreme court case, we can get the city taxes she's been paying Wilmington back from Philly.

Robert_A_Bouie t1_j65l8iy wrote on January 27, 2023 at 9:39 PM

Yes, Philadelphia will let you reduce her wage tax for the 1.5% paid to Wilmington. The issue is that the DE tax is probably in the area of 5% and your PA tax is 3% leaving an excess 2% that Philadelphia won't give credit for. That's the issue in the Zilka case I mentioned. If Ms. Zilka wins then that could translate into a 2% raise for your wife as Philly will have to credit the excess DE tax against the wage tax.