say state A and state B border one another. i live in state A but work in state B.

1.
state A has income tax of 5%
state B has income tax of 8%

i have no doubt that i pay state B 8% taxes. however, what else do i need to know?

does state B pay some or all of my taxes to state A? (ex. indiana and illinois do this i believe)
do i get refunded a portion of what i paid state B?
do i owe state A anything as far as income? (of course property taxes)

2.
state A has income tax of 8%
state B has income tax of 5%

i still live in state A and work in state B.

do i owe state A anything?


thanks!

(reason i am asking these question is that we may consider moving to an area where we'd likely face this situation)

2/1/2006 12:56:11 PM

gg on a very organized, calculated thread

good use of variables helping the reader understand the question, and also good use of bold, and the smile and () at the end help shape up a wonderful thread

A+

2/1/2006 1:00:32 PM

Okay, well, past years I've lived in NC but worked in GA when school was out. I don't honestly remember what I did for taxes, but it wasn't hard. Err, good luck.

2/1/2006 1:02:08 PM

It may vary by state.

When I moved to NC, I paid income tax on the income earned during the last couple months of the year. I didn't pay NC tax on income earned before I moved here.

The tax form instructions were tedious but straighforward.

2/1/2006 1:07:04 PM

each state is different

State Tax Rate:
* = Flat Tax Rate
** = Highest State Tax Rate
0% = No Flat Rate -- defaults to W4 exemption for any "other compensation" (i.e. not salary)


Tax Reciprocity Rules:

Rule R: Tax withheld in the resident state only.
Rule 1: The work state tax is withheld first and the difference, if any, is withheld for the resident state.
Rule 2: Tax withheld in the work state only, but the gross is also reportable to the resident state.
Rule 3: Both work state and resident state are withheld at the full amount with no credits.
Rule 4: The resident state tax is withheld first and the difference, if any, is withheld for the work state.


sorry this doesn't translate to tww better - if you say specific states i can make it look better maybe

State Taxation /Reciprocity Rules Table
State 	Tax Rule 	State Tax Rate 	Reciprocal States 	Tax Rule
AK Alaska 	2 	Non-Taxable 	No Reciprocals 	
AL Alabama 	2 	5.0% 	AK FL NH NV SD TN TX WA WY 	R
AR Arkansas 	2 	7.0% 	AK FL NH NV SD TN TX WA WY 	R
AZ Arizona 	3 	% of FIT 	CA DC IN VA 	4
CA California 	1 	6.0%* 	AZ JN VA 	4
CO Colorado 	2 	4.75%* 	AK FL NH NV SD TN TX WA WY 	R
CT Connecticut 	1 	4.5%
0% 	No Reciprocals 	
DC District of Columbia 	2 	9.5% **
0% 	MD VA 	R
DE Delaware 	1 	7.7% **
0%	No Reciprocals 	
FL Florida 	2 	Non-Taxable 	No Reciprocals 	
GA Georgia 	2 	6.0%
0% 	AK FL NH NV SD TN TX WA WY 	R
HI Hawaii 	3 	7.8%**
0% 	No Reciprocals 	
IA Iowa 	1 	6.0% 	IL 	R
ID Idaho 	2 	8.2% 	AK FL NH NV SD TN TX WA WY 	R
IL Illinois 	2 	3.0% 	AK FL IA IN KY MI NH NV SD TN TX WA WI WY 	R
IN Indiana 	3 	3.4%*
0% 	AZ CA DC NM
KY MI OH PA WI
IL 	4
R
1
KS Kansas 	1 	5.0%	No Reciprocals	
KY Kentucky	3 	6.0%
0%	IL IN MI OH VA WI WV	R
LA Louisiana	2 	3.0%
0%	AK FL NH NV SD TN TX WA WY	R
MA Massachusetts	1 	5.85%	No Reciprocals	
MD Maryland	2 	4.85%	AK DC FL NH NV PA SD TN TX VA
WA WI WV WY
DE	R
R
3
ME Maine	3 	5.0%*	No Reciprocals	
MI Michigan	2 	4.2%	AK FL IL IN KY MN NH NV OH SD TN TX WA WI WY	R
R
MN Minnesota	1 	7.0%*	MI ND WI	R
MO Missouri	2 	3.0%*	AK FL NH NV SD TN TX WA WY	R
MS Mississippi	2 	5.0% **
0%	AK FL NH NV SD TN TX WA WY	R
MT Montana	3 	6.0%*	ND	R
NC North Carolina	2 	6.0%*	AK FL NH NV SD TN TX WA WY	R
ND North Dakota	2 	14% of FIT	AJ FK MN MT NH NV SD TN TX WA WY	R
NE Nebraska 	1 	5.0%	No Reciprocals	
NH New Hampshire	2 	Non-Taxable	No Reciprocals	
NJ New Jersey	1 	7.2%
0%	PA
Philadelphia	R
1
NM New Mexico	3 	8.2%	No Reciprocals	
NV Nevada	2 	Non-Taxable	No Reciprocals	
NY New York	1 	7.35%*	No Reciprocals	
OH Ohio 	2 	3.5%*	AK FL IN KY MI NH NV PA SD TN
TX WA WV WY	R
OK Oklahoma	2 	6.75%*	AK FL NH NV SD TN TX WA WY	R
OR Oregon	3 	9.0%*	No Reciprocals	
PA Pennsylvania	2 	2.8%*	AK FL IN MD NH NJ NV OH SD TN
TX VA WA WV WY	R
PR Puerto Rico	3 	33.0% **
0%	No Reciprocals	
RI Rhode Island 	1 	10.9% **
0%	No Reciprocals	
SC South Carolina	2 	7.0% **
0%	AK FL NH NV SD TN TX WA WY	R
SD South Dakota	2 	Non-Taxable	No Reciprocals	
TN Tennesee	2 	Non-Taxable	No Reciprocals	
TX Texas	2 	Non-Taxable	No Reciprocals	
UT Utah	1 	6.7%**
0%	No Reciprocals	
VA Virginia	2 	5.75%**
0%	AK DC FL KY MD NH NV PA SD TN
TX WA WV WY	R
VT Vermont	1 	7.0%	No Reciprocals	
WA Washington	2 	Non-Taxable	No Reciprocals	
WI Wisconsin	3 	6.75%*	IL IN KY MI MN	R
WV West Virginia	3 	6.5% **
0%	KY MD OH PA VA	R
WY Wyoming	2 	Non-Taxable	No Reciprocals

2/1/2006 1:10:58 PM

looking specifically at pennsylvania and new jersey - working in jersey, living in pa

[Edited on February 1, 2006 at 1:12 PM. Reason : must learn to spell pennsylvania before moving there however]

2/1/2006 1:12:06 PM

here you go






[Edited on February 1, 2006 at 1:26 PM. Reason : .]

2/1/2006 1:24:33 PM

argh so that actually makes me more confused (i hate taxes and everything associated). let me see if i get this:

if i work in nj and live in pa, i pay the 7.2% and owe nothing to pa. but my income would be reported to pa (what would that mean to me?)

if i live in nj but work in pa, 2.8% would be withheld for pa and then 7.2-2.8 would be withheld for jersey.

so in other words, if i live OR work in jersey, i'm screwed regardless at 7.2%

is that right?

[Edited on February 1, 2006 at 1:35 PM. Reason : thanks by the way]

2/1/2006 1:33:44 PM

here's how it works for me

i live in NC - i worked in NC (as far as taxes go for 10months) - 1 month in IL - 1 month in MO

i pay 10 months of income tax to NC - 1 month to IL - 1 month to MO

i also have to report to NC all 12 months of my income so they get the full amount there - basically i get fucked by a little bit because of the way the reciprocity rules work

states will get their money from you somehow - it is not advisable to live in states that have bad reciprocity rules if you work somewhere else

2/1/2006 1:37:31 PM

hmmm im confused

see I live in VA

and I work in DC

yet I only pay VA income taxes, and that is what is taken out of my taxes


is this abnormal? or is this just how it works around here

2/1/2006 1:52:36 PM

that is normal because DC is a reciprocal state for VA - thus taxes are only withheld in your resident state

which is why queti will only pay taxes in her resident state - b/c of the reciprocity rule for PA/NJ

[Edited on February 1, 2006 at 1:57 PM. Reason : unless she meant philly]

2/1/2006 1:55:20 PM

ok just talked to my dad (a cpa)

live in PA

Work in NJ

you would pay income tax in NJ as a NON-RESIDENT

then you would pay income tax in PA as a resident, but you should get a credit for the amount of tax you paid in NJ

caveot...if its a border town you may fall under the reciprocity rule


That help?

[Edited on February 1, 2006 at 1:59 PM. Reason : if nj/pa have one]

2/1/2006 1:57:43 PM

ok - figured it out. ended up going to a nj employers guide for taxes that spelled it out pretty clearly....

if i live in pa but work in nj, their deal is that i would not pay nj taxes at all. the pa flat tax of 2.8% would be deducted by my nj employer BUT sent to pa via some system they have. apparently pa is the only state nj has this deal with.

gah so complicated BUT it does make me happier if we have to move. see property tax in nj is outrageous... that is why i'd be looking at living in pa anyway. plus it would only be like 45 minutes from philly.

thanks everyone!!!

2/1/2006 4:53:31 PM

heh i said that already

2/1/2006 5:05:30 PM

oops.... told ya i suck at that whole tax crap...which disturbs me since i have an mba... i'd think i'd at least be decent at that.... but then i focused on supply chain type stuff not $$$

anywho, thx.

2/1/2006 5:27:17 PM

hahaha your mba won't ever help on taxes

you would need a masters in accounting (what my dad has)

yeah looks like you are getting lucky on this one

2/1/2006 8:58:26 PM

Whatever state you live in you pay taxes, too

Hurrrrrrr

2/1/2006 9:01:45 PM

hmmm

FL doesn't have state income taxes...I changed my residency to FL when I got stationed here for that reason

I wonder how long I can get away with keeping it in FL after I leave? I'll be going to either CA or WA for about a year sometime this coming fall/winter, then to either NC or SC.

2/1/2006 11:09:02 PM

Eh, i'd just go to H&R Block and let them figure it out*shrug*

2/1/2006 11:53:34 PM

Duke,

I know someone who bought a small property in FL (while stationed there) and no matter where he moved with the navy he kept residency in FL

from my co-worker (retired petty officer first class) you don't ever have to change your residency no matter where you move to, you can still change your address, buy a house and everything

2/2/2006 8:15:12 AM