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Anonymous
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Do I have to pay Oregon income tax if i live in CO and travel to OR and WA for work?

I am a resident of Colorado that is married/files jointly.  My wife works in CO. 

I am taking a job with a company headquartered in Portland, OR but has offices around OR and WA.  Other than me, they will not have a presence in CO.

 

I have a couple of questions.

If my company does CO withholding on my salary, do I need to file OR income tax and pay them income tax for the # of days I work in OR?  (OR income tax is almost double CO income tax).

If yes, am I able to get back the CO income tax I paid for those days to avoid double taxation when I file my return?

If I work in WA for some days, am I also able to reduce CO income tax for the days in WA (even though WA has no income tax)?

 

On the flip side, if they withhold OR income tax for all my earnings, when I file tax return in OR , am I able to get a refund for all the days I worked outside of OR (in either WA or CO)? Or only the days I worked in CO and have to pay CO tax?

Likewise when I file my CO income tax, do I only need to pay taxes on the days I worked in CO or since I am a CO resident do I need to pay taxes on any amounts that are not taxed by another state?

 

Thanks for your time on a convoluted issued. I haven't accepted the job yet and trying to understand the impact to my income taxes to make sure I don't wind up making less money at this new job.

 

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2 Replies

Do I have to pay Oregon income tax if i live in CO and travel to OR and WA for work?

OK...nutshell...assuming it is all as W-2 income

 

1)  As a resident of CO, CO will calculate a tax on ALL your income from everywhere...even if WA doesn't tax it.

 

2)  To avoid double taxation, CO will then allow a tax credit for any taxes you had to pay to another state (like Oregon)....but will only allow a credit "up-to" what CO would have taxed the same $$.   SO you get taxed by CO on any WA income, and get at least a partial credit for any taxes you had to pay to OR.

 

3)   The company "Should" only withhold OR taxes for the time you physically are working in Oregon...and at no other time.  Doesn't mean they won't foul up...depends on how good their payroll department is.

 

4) IF...if they can withhold CO taxes for the time you are physically working outside of OR...great...but if they are not registered with CO to do that, they may not be able to do so, and you may need to set up CO estimated tax payments yourself for some of your income to get it prepaid and avoid any CO tax penalties.

 

5) at tax time, you must fully full in federal income tax forms first, then the non-resident state (Oregon)  to calcualte the appropriate OR nonresident tax.......and CO tax return last.

____________*Answers are correct to the best of my knowledge when posted, but should not be considered to be legal or official tax advice.*
Anonymous
Not applicable

Do I have to pay Oregon income tax if i live in CO and travel to OR and WA for work?

@SteamTrain ,

Thanks for the excellent summary.  That is essentially what I had anticipated but couldn't find it clearly documented anywhere.

Yes it is all W2 income.

As I thought, I really get not benefit for any time working in WA as CO will tax all my income less where I am taxed by another state.  

And they are a pretty small company (less than 100 employees) so entirely sure how they run their payroll (internal, via ADP, Gusto or others).  So I will press them on setting up my withholding for the correct states/amounts.  Probably the best outcome is to withhold CO income tax and then for me to pay OR and get any refund due from CO.

Thanks!

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