Check out some similar questions!

samorin · Dec 9, 2008, 09:23 AM

My husband and I live in MS and our employers are based in AL. I work from home and my employer does not deduct AL state and local taxes, but does deduct MS state taxes. My husband is a truck drive and his employer states that they are to deduct AL state and local taxes and will not switch to just deducting MS state taxes. Can you please clarify for me what is the correct form of taxation? Thank you.

ebaines · Dec 9, 2008, 10:30 AM

You pay taxes the state you work and the state you live. If you live and work in one state then you pay onlyto that state. It does not matter where the company is headquartered. In your case your employer is doing it right - you must pay MS taxes, but not AL taxes. In your husband's case - you haven't told us where he works. If he works in MS (and does not work in AL), then his employer should be withholding MS taxes, not AL taxes. Now it may be that his employer doesn't want to bother registering with the tax authorities in MS, so are taking the lazy way out by withholding AL taxes instead. The problem is that this means your husband will have to file taxes in AL in order to get back the money that was incorrectly withheld by his employer, and he may have to pay estimated income tax to MS during the year to avoid underpayment of taxes to MS. So in effect he has to pay 2 sets of state taxes, and wait for his refund to get the AL taxes back.

samorin · Dec 9, 2008, 11:10 AM

My husband is a truck driver and picks up material in AL and delivers it to 5 surrounding states.

ebaines · Dec 9, 2008, 11:36 AM

OK, so for tax purposes I would say he works in AL, so his employer is doing it right. Your husband will have to file a non-resident income tax form with AL. As a couple you will also file a joint tax return for MS, which will require that you report the total of all your incomes, and do an initial calculation as if it was all earned in MS, but then you get a credit for taxes paid to other jurisdictions (meaning AL), so at the end you pay taxes to MS only on your salary (not his) plus any other unearned income you may have (dividends, interest, capital gans, etc). Hope this helps.

ryanavey · Feb 28, 2011, 02:09 PM

I'm glad I found this thread, because I have a similar question: I worked and lived in Ohio until October 1, 2010.

On Oct 1, I moved roles (within the same Ohio-based company) to a department in Massachusetts. I was instructed to change my "work tax location" to Mass. At this time, my company moved my job to Mass-based in SAP, payroll, etc. and they began withholding Mass taxes and stopped withholding Ohio taxes.

However, I did not physically move to Mass until December, at which time I declared my change in home address. Should I have kept my work location as Ohio until I physically moved (even though my job was "located" in Boston)? And now that it's tax time, should Ohio still get the taxes from Oct-Dec (not Mass as my W-2's are showing)?

ebaines · Feb 28, 2011, 02:28 PM

The state in which you were physically present between October - December is the state that is due your tax payments for that time. So it sounds like you should pay Ohio taxes through mid-December, then MA starting with your relocation to MA at that time. You will file part-year resident returns for both OH and MA, and you should show your period of Ohio residence as being from January to mid-December and your period of MA residence from then to the end of the year. You will probably find that you get a refund from MA, but owe additional taxes to OH. I really hope for your sake it doesn't result in you having to make an interest payment to OH because of the lack of withholding for the period October - December.

ryanavey · Mar 1, 2011, 08:11 AM

And to determine how much income to declare to each state, I need to do the calculation myself, including pro-rating the month that I moved (I get paid monthly)? The W-2's split the Wages/Income in October, when my job changed, so I can't use those to determine how to split the OH and MA income.