I live in one state and work in another. Where should I pay state taxes?

Answer 1

likely you pay in both. file as resident in state where you live, and as nonresident in other state. states usually look at proportion of your total earnings in each state and ratio, but each state will have its own tax rates, deductions, etc etc. include interest earnings, spouse income, etc in home state. usually home state gives credit for amount paid to other state. it's not as daunting as it sounds, just get forms and follow instrux

Answer 2

That depends. Some states have reciprocal agreements where you only need to file in the state where you live. NJ and PA have such an agreement.

If the two states do not have an agreement, you must file a non-resident return in the state where you work listing only the income earned in that state and pay any taxes due. Then you file a regular resident return in your home state listing all income from all sources. You'll get a credit for the income taxes paid to the state where you work.

Answer 3

You pay taxes in two states.

One as a resident and one as a non-resident.