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New Member
posted May 31, 2019 5:54:41 PM

I live in Texas and work for company in Texas but travel to New Mexico; Am I still suppose to pay New Mexico State tax

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1 Best answer
Alumni
May 31, 2019 5:54:42 PM

Even without a residence in NM, if you are physically in NM when you perform services, you would need to file a non-resident return for that state.

The  normal rules for interstate taxation are -

·         you file a non-resident return for the states where you worked but did not live, reporting only the income earned in that state.

·         you file a resident return for the state you live in reporting all of your income, no matter where it was earned. You claim on your home state resident return a credit for taxes paid to other states that you worked in. If the out of state income was from a state without an income tax, you would have no credit.

The result of these rules is that you will pay tax on the income, but only once, and the net result is it will be at the tax rate in the higher tax state.

·         If the resident state is a non-income tax state like Florida, Texas and others, the result will be that you still will owe taxes in your non-resident state.

·         If the non-resident state is a non-income tax state like Florida, Texas and others, the result will be that you still will owe taxes in your resident state.

There are some exceptions to this rule, but  can handle them. Exceptions are in "Reciprocal Tax Agreement" states. This URL provides information on filing multi-state returns

In Turbotax you must follow this sequence:

·         Prepare your federal return,

·         Prepare your non-resident state return, then

·         Prepare resident state return.


2 Replies
Alumni
May 31, 2019 5:54:42 PM

Even without a residence in NM, if you are physically in NM when you perform services, you would need to file a non-resident return for that state.

The  normal rules for interstate taxation are -

·         you file a non-resident return for the states where you worked but did not live, reporting only the income earned in that state.

·         you file a resident return for the state you live in reporting all of your income, no matter where it was earned. You claim on your home state resident return a credit for taxes paid to other states that you worked in. If the out of state income was from a state without an income tax, you would have no credit.

The result of these rules is that you will pay tax on the income, but only once, and the net result is it will be at the tax rate in the higher tax state.

·         If the resident state is a non-income tax state like Florida, Texas and others, the result will be that you still will owe taxes in your non-resident state.

·         If the non-resident state is a non-income tax state like Florida, Texas and others, the result will be that you still will owe taxes in your resident state.

There are some exceptions to this rule, but  can handle them. Exceptions are in "Reciprocal Tax Agreement" states. This URL provides information on filing multi-state returns

In Turbotax you must follow this sequence:

·         Prepare your federal return,

·         Prepare your non-resident state return, then

·         Prepare resident state return.


New Member
May 31, 2019 5:54:45 PM

You would only pay taxes in NM if you have a residence there.