GeoffreyG
New Member

State tax filing

As an individual taxpayer, you only have to file a tax return in a state where you are either physically living, or working, or where you may happen to travel and receive taxable income (we'll explain that below).  But your short answer is that no, you don't need to file a tax return or pay taxes in the state where your company is located or headquartered.  You only have to file and pay taxes in your home state of residence (where you are working for your employer remotely).  Please let us explain further.

Actually, it doesn't matter where you employer is located, as far as your personal income taxes are concerned.  Your employer could be from California, New York, or Paris (France), for that matter.  For your personal taxes, the only relevant factors are where your legal residence is (called "domicile" in the tax jargon), where you work, and from where you may receive income.  An example here will be illustrative.

Let's say a woman lives in Idaho, drives to work every day for a job in Montana, but her company is based in Colorado.  On a vacation, she travels to Louisiana and wins money there at a gambling casino.  She also owns a rental house in Oregon.  In this (hypothetical) set of circumstances, this taxpayer would have to file a state tax return in Idaho (home state), Montana (because she worked there), Louisiana (because she received taxable gambling winnings from a casino there), and Oregon (because she has an income-earning rental house there).  But, notice that she does not have to file a Colorado state return, even though her company is there.  The reason for this is that she has no Colorado "nexus" for tax purposes.

If this same woman's situation is simplified down to just living and working all year in Idaho, for a Colorado company, then she just files a tax return for Idaho only.

The same rules apply to those who are paid by W-2 (employees) as well as those who are paid by 1099-MISC (independent contractors).

All that is to say that you just need to file a tax return for your home state . . . and don't worry about where your employer is located.

Hopefully this explanation makes sense.  However, if you have further questions, encounter any difficulties, or just want to speak with a live tax expert who can walk you through your TurboTax entries (including the ability to screen-share with your computer), please feel free to contact us.  We would be happy to help you (and as a paying customer, the call is free to you).  Here is a link where you can create a support ticket and reach us:

https://support.turbotax.intuit.com/contact/


Thank you for asking this important question.

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