Working in Another state, do you pay double state tax?

[beloitpiper]

In high school, I lived in Wisconsin but worked at a factory in Illinois. I paid taxes in Wisconsin only.

[MacBean]

I can say with 100% sureness, that each pair of states can have a different arrangement. You need to check with the two states' tax agencies. Let me give a nice example: when I moved from California to Indiana, I had some income from each state. The next April, I filed with CA that part I earned in CA, and with IN that part I earned in IN. I had no complaint for six years. Just as I was about to leave the country, I had a collection agency issue me a summons to take me to court for non payment of taxes to IN, plus interest, plus fees. The amount of tax they said I owed IN was $130, the remaining $370 was fees. The rule in Indiana for California is that you pay the full year's income tax to Indiana, and they reimburse California. They said I failed to pay them the money I earned in California. I paid the $500 and they dropped the case; I wasn't going to be in the country to argue it. When I asked why they hadn't contacted me earlier, they said they couldn't reach me (for six years). I had filed state income tax faithfully for six years, had not moved, and my name was in the phone book. In summary, you have to get this right, and you have to check in the right place. This is definitely the wrong place.

[davedove]

MacBean is right, you need to check with the specific states, as each state is different.

If you have income from another state, some states will allow you to not include that income, some want you to include it but then give you a tax credit, and I'm sure there are others as well.

[Kerr the Walker]

I worked in CT for a summer but had a permanent address in RI. I paid taxes in both. But that may just be the arrangement that RI and CT have.

Also check to see if the company you're going to work for has an office in your home state. They might be able to assign you that office as your "home" office and process your pay through there so avoid out of state stuff. By no means advocating dodging taxes, but it may be a way to simplify. Definitely would talk to a pro about it.

[auld argonian]

There's always a section on my tax software that deals with out of state income but since it hasn't applied to us, I haven't really had to deal with it.

This is on the Turbo Tax website and I hope that it might help:

http://turbotax.intuit.com/support/k...faqs/5609.html

As usual, I expect that there are some extenuating circumstances and who knows if the tax code has been or will be changed since this was written.

Best

AA

[ForresterModern]

Definitely consult an accountant or tax attorney for the paperwork. But the general rule of thumb is, if during any part of a given year you earn money in two different states or work in one and live in another state, you end up paying taxes in both states. The state in which you perform the work typically takes its cut first---if the state in which you live has a higher tax rate they will figure this higher tax amount, then subtract the amount you paid in the other state, and make you pay the difference only to them. If the state in which you work has the higher rate then the state in which you live gets nothing extra. When you work in two states in the same year the same general rule applies, although the distribution of said taxes gets more complicated, as each state wants its share of what was earned in that state, and the one with the higher rate wants more in addition to that from what was earned in the other (lower rate) state. This is why an accountant or tax attorney is needed--to make the paperwork and money go where it is supposed to go.

I have a freind who over the last several years lived in one state, had drivers licenses at various times in various states where he was working (which has compounded the problem a bit) and living part time, but over the last couple years has worked in several other states, sometimes several in one year---he is up to his eyeballs in attorneys paperwork trying to make sure he does not owe any back taxes anywhere.

[MuffinMan]

Thanks guys, I was on the AZ tax site last night and of course very confussing, I will call them and see whats up. I am trying to contact my new HR, since we do have cancer centers here in the valley, have them just assign me here for pay. Wish me luck and if anyone is in Palm Springs area during the week I buy the first beer at the Tilted Kilt just let me know.

MM

[dfmacliam]

I am only working on a jobsite.. doing electrical work at a compressor station, temporarily.. Texas does not have a State income tax, while I pay my taxes in every other means to the local community.. Since I will be in Illinois, as a very temporary resident, living in a motel, for a short time.. I wonder how this woud affect me.. I guess I will contact an ccountant.

[MacMillan of Rathdown]

SEEKING OR SOLICITING PROFESSIONAL ADVICE IS NOT ALLOWED like almost everyone has suggested, contact an accountant. I pay taxes in six different tax jurisdictions and each one is handled separately, by an accountant in each jurisdiction. Tax codes are tricky, at best, and an economic snare for the unwary and arrogant. Most tax advisers will provide a simple "yes"-"no" opinion over the phone at no charge. Do yourself a favour and ask an expert. After all, it's your money, not mine, that you are talking about.

[MuffinMan]

I want to thank everyone for their advise, seeking an professional in these cases is the only way to go. If I have broken any rules of this forum, it was not done purposely and I apologise to the board.

MuffinMan