KeshaH
Expert Alumni

State tax filing

Because you worked in North Carolina, you would typically owe North Carolina tax on the income you earned within the state. You'd need to indicate how much of your income was earned inside of North Carolina.

 

Since you live in Kentucky, you have to pay income tax there - even if you don't actually work in the state. If your job didn't withhold any Kentucky income tax from your pay, you will have the balance that you're seeing on your Kentucky return.

 

The good news is, if you do have to pay tax to North Carolina, Kentucky will give you a credit for those taxes paid. This credit will lower the amount of tax owed to Kentucky.

 

The best option for 2025 is to have Kentucky income tax withheld from your paycheck to avoid having a balance due when you file your tax return next year.