Career Path > Tax Q&A

State Income Tax for Travelers

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Rennhack:

--- Quote from: ksheed12 on Sep 11, 2015, 01:22 ---You pay $1,100.00 to have your taxes prepared?! Good lord, do you wipe with 5's or 10's?

--- End quote ---

In the past, I did my own taxes and would have scoffed at someone paying that much money.  However, with the complication of being my own employer.... I hired a CPA several years ago, which costs me ~$1,800/yr.  That covers more than tax prep, and as GLW says, I have complicated finances as well.

traveltax:

--- Quote from: ksheed12 on Sep 10, 2015, 10:02 ---DISCLAIMER: I'm not looking for any sneaky ways to do things. I just want to know the actual rules and how it will effect me come April.

I'm a full time employee of the company that I work for and will be sent to work a job in a state that does not have state income tax. My company and home are in a state that does have state income tax.

Do I continue to pay my standard state income tax of my state of residence while working out of state on a temporary job that is expected to last 6 weeks, or am I not required to pay state income taxes on wages earned in the other state?

If I don't pay state income taxes while working out of state and maintaining my home state residence would I be penalized by my home state for not paying the appropriate percentage of state income tax on my annual gross income?

If I pay my home state's withholding rate will I be entitled to a refund for the amount/percentage withheld while working out of state?

Thanks in advance for any advice on this issue.

--- End quote ---

The state that taxes your global income is the state that you have a legal residence (DLN, Car Registration). Do not confuse this with a "tax home" which is a different animal that determines from where you have deductible/reimbursable travel expenses.

Your employer is only obligated to the state you work in but since the state you are assigned to has no state income tax, you can ask that they withhold for your home state. Even though there is no income tax in this work state, there is still unemployment, state disability and other items that the work state requires for your services within its borders.

If this work state had an income tax, you would be able to offset some or all of your home state tax with the amount paid to the work state for that income.

chuckdhuff:

--- Quote from: traveltax on Oct 31, 2015, 09:53 ---The state that taxes your global income is the state that you have a legal residence (DLN, Car Registration). Do not confuse this with a "tax home" which is a different animal that determines from where you have deductible/reimbursable travel expenses.

Your employer is only obligated to the state you work in but since the state you are assigned to has no state income tax, you can ask that they withhold for your home state. Even though there is no income tax in this work state, there is still unemployment, state disability and other items that the work state requires for your services within its borders.

If this work state had an income tax, you would be able to offset some or all of your home state tax with the amount paid to the work state for that income.

--- End quote ---

There's the answer I was looking for. Thanks.

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