Do I pay state taxes to both the state I live in and the state I work in? This is my first time working out of state.
2007-01-16 03:10:47 · 7 answers · asked by strtat2 5 in Business & Finance ➔ Taxes ➔ United States
If you are self-employed the answer is definitely yes. You would file in both and take a credit on your home state return for the taxes paid to the other state.
If you are a W-2 employee it will depend on the states. Many states have agreements with neighboring states that exempt W-2 employees from filing in the state they work in if they live in a neighboring state. Maryland and PA have this agreement as do PA and NJ. Yo should check with your state to see if there is a reciprocit6y agreement in place.
2007-01-16 05:04:25 · answer #1 · answered by waggy_33 6 · 1⤊ 0⤋
Yes, you do. You have to file returns in both states, however you will be able to claim a credit against your resident state taxes for the taxes you paid in your work state, so you are not double taxed, but you will be taxed at the higher rate of the two different states. Certain states may have agreements with bordering states that will exempt the individual from tax in the work state if they are paying tax in their residence state.
2007-01-16 03:14:33 · answer #2 · answered by jseah114 6 · 2⤊ 0⤋
You generally will be required to file an income tax return in both states. One will give you a credit for tax paid in other state. File a nonresident return in the state in which you work and a resident return in the state in which you live. Whether you have to pay income tax depends on your filing status, income, state tax laws, etc.
2016-03-14 06:40:27 · answer #3 · answered by Anonymous · 0⤊ 0⤋
You will file returns in both states. Most adjacent states have reciprocity agreements that you can get a credit in one for the taxes paid in the other so you don't get double-taxed on the same income.
Download the forms and instructions for both states from the state websites, and read them carefully. They should explain the process.
2007-01-16 04:30:02 · answer #4 · answered by Judy 7 · 0⤊ 0⤋
YEs. Do not forget to file for both states next year on income tax returns.
2007-01-16 03:14:21 · answer #5 · answered by Support Breast Cancer Research 4 · 0⤊ 0⤋
This situation isn't too difficult at all........You file your Federal and a State return for the state you reside in (providing that you reside in a state that requires a return.....some states, like Florida for example, do not require a state tax return).
You must also file a State tax return for the State you worked in. (relax, it's just a formality, if you paid tax in the first state, you won't owe anything for the other)
2007-01-16 03:19:30 · answer #6 · answered by Anonymous · 0⤊ 1⤋
I agree with waggy_33's answer, but if you need a more in-depth answer like I did, refer to this page. http://www.learnvest.com/knowledge-center/how-to-do-taxes-if-you-live-and-work-in-2-different-states/
2013-12-08 09:59:29 · answer #7 · answered by Claire 2 · 0⤊ 0⤋
Go to H&R Block's website. Or the IRS' website.
2007-01-16 03:14:40 · answer #8 · answered by Blunt Honesty 7 · 0⤊ 1⤋