Paid taxes for a state I don't live in

wittlemwan
wittlemwan Member Posts: 1 Newcomer
in Filing my taxes

At my current job, I paid taxes for Alabama despite living in TN after a role change within the company. I'm lost on what I'm supposed to do, as I'm getting conflicting info across the board. I'm told that I need/don't need a corrected W-2, that I need to file a nonresident return. Just curious on next steps, and wanna see if I can get a definitive answer.

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Answers

  • MatthewD
    MatthewD FreeTaxUSA Admin, FreeTaxUSA Agent Posts: 758 image
    Hi Wittlemwan,

    There are two basic tax concepts to understand when it comes to state taxes when working in or living in different states.

    1. You pay taxes to the state you work in (or have income earned from that state's sources, like rental income)
    2. You pay taxes to the state you are a resident of on all sources of income.

    Here is a community article you may read on the topic. https://community.freetaxusa.com/kb/articles/72-how-to-claim-the-credit-for-taxes-paid-to-another-state?

    Did you work in Alabama? If so, then you probably owe taxes on the Alabama source income. Since you live in TN and don't file a state tax return in TN, you cannot claim a credit for taxes paid to another state.

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