Today TaxMama hears from Myra in Weaver, AL who tells us. “My husband works for a company that occasionally has him working out of state. He has w2’s from our home state and 4 other surrounding states how do we file his state taxes?”
Dear Myra,
Oh this is going to be fun!
Look at the W-2s to see how much he earned, and how much withholding was taken out in each state.
If the earnings are minor, just a couple of thousand dollars or so; and the withholding is minor – low enough so you wouldn’t get it back if you filed a tax return in that state – you may be able to skip filing tax returns for each state.
If not, if your husband has significant earnings and withholding for each state – you will need to file non-resident tax returns in each every state.
This is a relatively complicated process, since some states will give you credit for taxes paid to other states, some won’t.
Once you’ve prepared all the other states’ tax returns, you can finalize your home state’s tax return. Be sure to take credit for taxes paid to the other states, if your state allows it.
This is not for the faint of heart. Each state has different tax forms and allows different deductions and exemptions for non-residents. And you essentially have to do 6 tax returns simultaneously (IRS + 5 states) to get it right.
Get help. Even a tax professional will have to think this through.
Remember, you’ll find answers to questions about multiple states and all kinds of tax issues, free. Where? Where else? At TaxMama.com
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