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Level 3
April 26, 2023

Pennsylvania Non Resident Income

  • April 26, 2023
  • 1 reply
  • 9 views

If anyone can help…we filed a non resident tax return for Pennsylvania. Client received a Qui Tam civil settlement in the Pennsylvania District Court. He received a 1099 Misc from his law office with PA listed as the state but no state income was listed in the box. He lives in Texas. We cannot get an answer from the PA revenue agents via online discussion and can’t get a hold of anyone by phone there. We are trying to see if the non resident PA return was necessary or being a non resident would make it non taxable in PA. Non resident status is what we are trying to find out. Anyone from Pennsylvania can help?  Thank you. John. EA from Texas. 

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    1 reply

    sjrcpa
    Level 15
    April 26, 2023

    "He received a 1099 Misc from his law office with PA listed as the state"

    Does this mean his lawyer is in PA?

    If your client does not live in PA he is a nonresident, so i don't understand "Non resident status is what we are trying to find out"

    I am not a lawyer, but my first hit for qui tam showed:

    "A qui tam action is a lawsuit brought by a private person on behalf of the government against a party alleged to have violated a statute or a contract with the government, especially involving fraud or false claims. The person who brings the action is called a relator or a whistleblower. The relator may share part of the penalty or recovery with the government. Qui tam actions are created by statutes to encourage citizens to assist the government in enforcing its laws"

    What was the nature of the Settlement? Was your client a whistleblower?

    The more I know the more I don’t know.
    jctxAuthor
    Level 3
    April 26, 2023

    We know the settlement is taxable in Pennsylvania as a resident based on a PA Supreme Court decision in 2021. But we cannot get a definitive answer on if a non resident is taxed as well. The 1099 listed PA as the state but the 1099 box for state income was blank. The law firm that handled the settlement was not sure either….at this point. Thanks. 

    sjrcpa
    Level 15
    April 27, 2023

    What do you think makes it PA source income?

     

    The more I know the more I don’t know.