Hal_Al
Level 15

State tax filing

It may only appear that you are paying state tax on the self employment. On a state return  you usually pay tax based  on a ratio of your state income to your total income. So, the TN income gets reported on the other state (OS) return, but is not taxed. As Critter-3 said, you are asked, in the interview, to identify each piece of income as OS income or not OS income.  That establishes the tax ratio.  W-2 income may be identified by the state abbreviation in box 15 of the W-2 (rather than in the interview).

For more specific help, you need to identify the state (rules vary).