I have been reading this forum about others with similar issues and just wanted to clarify before submitting this year's taxes. I currently live in AL but work in GA (and have for all of 2007). Per some of the previous posts, I should do the following (correct?):

File in Georgia as a non-resident and pay the taxes on what I earned.

File in Alabama as a resident, apply the paid taxes credit from GA to the AL return.

The reason I ask is because the GA DoR said that we should get all (or most) of the taxes paid to GA back. But if that is the case, then I will owe AL taxes (which would be OK also). The main issue I have would be the with the amount owed to AL this year, and next years looking similar, I would be required to pay estimated tax (which I would rather not). Using the tax credit from GA has both states owing me just a little and not having to pay estimated tax for 2008. Is this correct?

Regards,
D

The concept you write about sounds correct; I am not familiar with the tax credit from GA, so I can't help with your question about estimated taxes; if the amount is small, I would rather pay a small penalty than file quarterly returns, but that's just lazy me.

You have it right!