Online Tax Filing Blog

The Official Blog of Tax Software


Live in One State; Work in Another

As if your tax return wasn’t confusing enough, you have now gotten a job across the border from the state where you live. So now that you live in one state and work in another, to whom do you pay state taxes?

Let’s look at the various possibilities for state tax filing, from the most tear-inducing to the least:

1. Both states? Sounds like a possibility, doesn’t it? Well it is. It’s a very distinct possibility that you will pay state taxes in both states and owe in each state if you are not careful how you fill out your tax return.

2. Your home state. Makes sense. After all, you always seem to be giving some of your money to the place where you live. This, however, deserves further investigation before you cheerfully say, “Okay, here’s a third of my money.”

3. Your employer state. You’re getting warmer.

4. Neither state. May be a possibility!

Generally, when you do your state tax filing, you file a resident return for the state where you live. If you work but do not live in the other state, you may have to file a non-resident or part year resident return.

There is a nifty little credit that a lot of states offer, called the Credit for Taxes Paid in Other States, which you seriously need to take advantage of if at all possible. Check for this credit when you do your taxes online with TaxSlayer by going into your state return from the Main Menu and clicking on the Credits option.

Some states actually have a reciprocal income tax agreement with one or more nearby states. According to Pennsylvania’s reciprocal income tax agreement with their neighbors, one state will not tax employee compensation if the employer in the other state withholds part of the paycheck. In other words, your employer state withholds Pennsylvania tax withholdings from your check instead of your employer’s state tax withholding.

Comments are closed
Copyright © 2013 TaxSlayer LLC | 706-922-6741 | 3003 Allen Drive Evans, GA 30809
© 2013 Refund distribution subject to IRS acceptance of return & University National Bank. *IRS refund times will vary but most IRS refunds will be issued in less than 21 days after efiling. TaxSlayer cannot guarantee date of receipt of refund. Your Privacy is Important: We do not rent, sell or share your personal information with anyone. Your e-mail is used to communicate with you about your return status, retrieve your Username or reset your Password. *TaxSlayer phone support available January 2nd through April 19th. (C) 2013 JR Motorsports, LLC. The name, likeness and signature of Dale Earnhardt Jr are used with the permission of JR Motorsports, LLC and JRM Licensing, LLC.

*Free tax advice is available for free with TaxSlayer Premium Edition. This product is available by phone or email, Monday – Friday through April 15th. Please check the website for the hours of operation as they may vary due to capacity. * guarantees accurate calculations or we will reimburse you any Federal and/or State penalties and interest charges. *Maximum Refund Guarantee- Your refund is based on data supplied by you and is calculated based on the schedule and forms supported by A larger refund or smaller tax liability cannot be due to differences in data submitted to or positions taken that are contrary to law. If you find that another tax software calculated a larger refund or smaller tax liability based on the same information provided to, we will refund your applicable fees paid to *Actual prices for services rendered are determined at the time of print or efile and are subject to change without notice. Prices are good until April 1st 2013.

*All major forms and schedules: Your return is completed by all of the major forms and schedules supported by To see the complete list of major forms and schedules supported by visit *Supported Federal Forms page.
Go to top