Travel Tax Logo
Travel Tax GIF

Basic Tax Math – Part 6 – State Taxation

While dealing with federal taxes is hard enough, anyone who works in more than one state has a greater challenge juggling all the different state tax returns.
How are taxes computed when you work in more than one state?  Well on paper,  it’s pretty simple, however, it is a great source of confusion for most.
The rules run like this : your home state will tax your global income  regardless of where you earned it and regardless of whether you earned any income in your home state. It doesn’t even matter if you were gone for an entire year and never set foot in your home state- the fact that you maintain a legal domicile in your home state is sufficient basis for that state to tax your global income .
At the same time,  when you work in  another state and labor on its soil,  that state has the right to tax all of your income earned within its borders.
Now.  Are you being taxed twice on the same income?  Yes.  But, there is relief.  Your home state is obligated to give you a credit for the tax that you pay to the work state on the same income . Many states will call this,  “credit for taxes paid to other states”.
To illustrate:  say you live in a state that has a 5% tax . You work a temporary assignment in a state that has a 2% tax. Since the tax you pay to the work state is less than the tax you would pay to your home state on the same income, you will have to make up the 3% difference.
Let’s look at this illustration in reverse : say you live in a state with a 2% tax and work temporarily in a state that has a 5% tax. Since you pay more to the work state than you would in the home state, there is nothing due to the home state, since the credit brings the tax liability for that income to zero.
I will explore other nuances of multistate taxation in later posts.

Contact Us

We prefer emails for quick questions. Please email us and if we’re able to answer your questions we will! If not, we’ll let you know if you need to schedule a tax home or a preparer consult.We are unable to answer questions related to the use of tax software programs.

If you haven’t heard from us within 72 hours, please email us at, or call us at 402-379-7818.

Tax Home Questions

If you are calling to talk about establishing or maintaining a tax home, you may schedule a tax home consult here. Remember that tax home issues can create a major tax liability if not handled correctly.

Hours of Operation

Monday to Friday – 8:30 a.m. to 4:30 p.m. Eastern Time
(Please note: On Fridays our phones may switch over to voicemail at noon, in order for us to prepare for the upcoming week.

Please note: Your inquiry is private. We do NOT share your information, directly solicit, and we only message through social media if initiated by you.

Phone: 402.379.7818         Canada: 902.482.8128

Send Us Documents

The most secure way to send us your documents is to utilize this link that will allow you to select your saved files and upload them via our encrypted site.

Documents are processed within 24 hours EXCEPT ANY DOCUMENTS SENT AFTER 2:00 PM EST ON FRIDAYS OR ON THE WEEKEND. Weekend docs will be processed Monday or Tuesday at the latest.

Mail: 46 St. Mark Rd., Taylors, SC 29687
Fax: 877.872.8829

Pay Your Invoice Online

You will be directed to a separate PayPal portal page to complete the transaction. A PayPal account is not required.

Need to Make a Payment to the IRS?

Taxpayers can make electronic debit or credit card payments through our official IRS payment website, Drake e-Payment center, at Convenience fees for credit cards (1.96%) or debit cards ($2.55) will be applied at the time of payment. Use this link to make your payment.

TravelTax, LLC BBB Business Review