Robert_A_Bouie t1_j655vxd wrote on January 27, 2023 at 8:01 PM

I'm a State and Local Tax partner with a somewhat large firm in Center City.

You've got a somewhat difficult situation with working in Wilmington & living in Philadelphia. Your federal return may be easy but your state and especially city filings aren't. I'd say that $500 is probably a bargain and I'm very surprised that E&Y would even touch them for that price (I certainly wouldn't).

Have they at least filed any protective refund petitions for you while we wait for the PA Supreme Court to issue a decision in Zilka v. Philadelphia Tax Review Board? That's a case that would probably positively affect you if it goes the plaintiff's way and you ought to consider a protective petition for 2019.

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

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.