Live in Pennsylvania, Work in Nebraska: Which State Taxes Your Paycheck?
Answer
You file twice: Nebraska first, then Pennsylvania. There is no reciprocity agreement between these two states, so Nebraska taxes the income where it was earned and Pennsylvania taxes it again as resident income — with the resident credit removing the double charge rather than an exemption form preventing it.
Last verified
Two states can lawfully tax the same wages: Nebraska because the work happened there, Pennsylvania because you live there. Nothing prevents the overlap in advance — it is unwound afterwards, on the Pennsylvania return, through the credit for taxes paid to another state.
A Pennsylvania resident taxed by another state on the same income claims the credit for taxes paid to other states on Schedule G-L. The credit is capped at the Pennsylvania tax on that income, so it removes the double tax but never refunds the excess when the other state charges more.
What you file
- 1Nonresident return · NebraskaForm 1040N with Schedule III
File the Nebraska nonresident return FIRST — you need the Nebraska tax figure before you can complete Pennsylvania.
- 2Resident return · PennsylvaniaSchedule G-L
File a Pennsylvania resident return reporting all income, then claim the credit for tax paid to Nebraska. The credit is capped at what Pennsylvania would have charged on that same income, so if Nebraska taxes it at a higher rate the difference is not refunded.
The two states, side by side
| Pennsylvania | Nebraska | |
|---|---|---|
| Taxes wages | Yes — flat | Yes — graduated |
| Reciprocity partners | 6 (Form REV-419) | None |
| Convenience rule | Yes — general rule | Yes — general rule |
| Nonresident return | Form PA-40 (nonresident) | Form 1040N with Schedule III |
| Credit for other-state tax | Schedule G-L | Form 1040N Schedule II |
| Nonresident safe harbour | None published | None published |
| Local income tax | Yes | No |
| Revenue department | Pennsylvania Department of Revenue | Nebraska Department of Revenue |
| Last verified |
The other direction
Reversing the commute does not always reverse the answer. Living in Nebraska and working in Pennsylvania gives:Both states — credit offsets the double tax.
Same two states, different situation
The withholding answer turns on how you are paid and where the work happens, not only on which two states are involved.
- Remote worker: Pennsylvania → NebraskaConvenience-of-the-employer rule — both states tax you
- 1099 contractor: Pennsylvania → NebraskaHome state, plus the client state if you work there
- Moved mid-year: Pennsylvania → NebraskaTwo part-year returns
Other Pennsylvania pairs
Questions people actually ask
I live in Pennsylvania and work in Nebraska. Which state takes the tax out of my paycheck?
You file twice: Nebraska first, then Pennsylvania. There is no reciprocity agreement between these two states, so Nebraska taxes the income where it was earned and Pennsylvania taxes it again as resident income — with the resident credit removing the double charge rather than an exemption form preventing it.
Which state should my employer be withholding for?
Nebraska. The wages are sourced to Nebraska, so Nebraska withholding is correct and there is no Pennsylvania withholding to set up.
Will I end up paying tax twice on the same income?
Not twice over, but you will pay the higher of the two rates. Pennsylvania gives residents a credit for tax paid to Nebraska on the same income, claimed on Schedule G-L. The credit is capped at the Pennsylvania tax on that income, so if Nebraska taxes it more heavily the excess is not refunded by either state.
How current is this?
The Pennsylvania and Nebraska rules on this page were last checked against Pennsylvania Department of Revenue and Nebraska Department of Revenue on 2026-08-07. We re-check the full grid every December after state legislative sessions close, and re-check the convenience-of-the-employer states quarterly because that is where the rules move fastest.
Sources
Every fact above comes from the revenue department that publishes the rule. We do not cite secondary summaries, and we do not restate a figure we could not find at source.
- Pennsylvania Department of Revenue — individual income taxaccessed 2026-08-07
- Pennsylvania — Form REV-419accessed 2026-08-07
- Pennsylvania Personal Income Tax Guide — Income Subject to Tax Withholdingaccessed 2026-08-07
- Nebraska Department of Revenue — individual income taxaccessed 2026-08-07