Apr 3, 2025
Though knowing the fundamentals will help you navigate through the procedure easily, living in one state and working in another can make tax filing a little more difficult.
State Income Tax Obligations
- If you are working in a state other than your home, you could be required to submit two state tax returns:
- A resident return for the state of your residence.
- A non-resident return for the state where you work.
Reciprocity Understandings
- A few adjacent states have reciprocal agreements that ease taxes for commuters.
- You usually just have to file in your home state if your home and work states have such an agreement.
- This prevents double taxation on one income.
Credits for Nonresident Taxes
- Your home state might provide a credit for taxes paid to another state if there is no reciprocal relationship.
- This stops you from being taxed two times on the same income.
Remote Work Issues to Think About
- Tax laws might change if remote employment gets more widespread.
- Some states apply the employer convenience rule, which means you can owe taxes in your employer’s jurisdiction even if you work remotely.
Withholding Adjustments and Filing Deadlines
While certain states might vary, filing dates often line up with the federal April 15 deadline.
Check your withholdings to make sure the right amount is deducted for both states if you want to prevent unanticipated events.
This entry was posted
on Thursday, April 3rd, 2025 at 7:16 pm and is filed under Credits, Personal Information, Tax Related Questions.
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