Q. I understand that working for an Oregon company and living in WA, that Oregon state taxes are required?
A. No.
Q. I understand that physically working in Oregon (regardless of where the employer is domiciled or stationed) and living in WA, that Oregon state taxes are required?
A. Yes.
The general rule is: your report all your income on your home state return, even the income is earned out of state. You file a non-resident state return for the state you worked in and pay tax to that state. Your home state will give you a credit, or partial credit, for what you paid the non-resident state. You will have to file a non resident OR state return and pay OR tax on the income earned there. Since WA does not have an income tax, you do not need to file a WA return. But, you get no credit for the income tax you pay to OR. If you itemize deductions on your federal return, you do get a deduction (not a credit) for any state income tax paid (with an upper limit)
