MS and AL do not have reciprocal tax agreements, this means you will need to file for both states.
Whichever state is your home state (is your home address AL or MS?) you will file last. You will pay taxes in both states. You will need to include the deliveries to your non-resident state on the non-resident state return and then include ALL deliveries on your state return. The non-resident state will not tax the deliveries that you made to your resident state.
In general, your home state will tax all income from all sources. How you will do this, is you will file a nonresident return for the state that you do not reside in, but you visit for work and earn money in. So if you live in AL, you will file MS first. Since you are self-employed, you will likely end up having to pay taxes to the non resident state if did not make estimated payments.
Then you will fill out your resident state, claiming a credit for taxes paid to the nonresident states on your home state return. You may or may not still end up owing money to your resident state depending on whether or not their tax rate is higher or lower than your nonresident state and how much you earned in your resident state versus your non resident state. If the non resident state had a higher tax rate than your resident state, your credit on the income earned in the nonresident state will be limited to the amount of tax you would have paid to your resident state. They will not give you a refund of the taxes you paid to the nonresident state.
Also, since you are self-employed, you should be filing quarterly estimated taxes for both the federal government and the states where you are delivering. DoorDash and UberEats will send you a 1099-NEC, you can then use TurboTax Premier Online or TurboTax Home and Business to file a Schedule C reporting your income and expenses as part of your return. This income will be reported on Schedule C which is part of your overall tax return. This also means you will be subject to SE Tax. If you did not pay SE Taxes in 2024, and if you plan to do this again in 2025, it may be a good idea to make quarterly estimated payments to cover your SE taxes of 15.3% and avoid penalties.
Taking Business Expense Deductions
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