Hello,

I've been working remotely for Holloman AFB, NM while my office and residence is in Florida. Recently, I was converted from being a Contrator to Civil Service. My first paycheck with Civil Service shows that they are deducting NM state taxes from my check. While I worked as a Contractor, they did not deduct NM state taxes from my pay. In both jobs, my residence and office were in Florida. Which way is correct?

Thanks so much!

If you live in FL, and work in FL, then you have no obligation to pay NM income taxes. It does not matter that your employer is in NM -what matters is the state where you actually work. Talk to your HR and have them immediately stop withholding NM tax, and if possible refund to you the amount they already withheld. If they don't stop withholding, and/or can't or won't refund what they have already incorrectly withheld, you will have to file a state income tax return with NM in 2010 to get a full refund of the amount withheld.

If you live in FL, and work in FL, then you have no obligation to pay NM income taxes. It does not matter that your employer is in NM -what matters is the state where you actually work. Talk to your HR and have them immediately stop withholding NM tax, and if possible refund to you the amount they already withheld. If they don't stop withholding, and/or can't or won't refund what they have already incorrectly withheld, you will have to file a state income tax return with NM in 2010 to get a full refund of the amount withheld.

Thank you for your quick response. I agree with you and have forwarded your answer to my payroll dept. I'm awaiting their response.