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Filing a joint return. Husband lives and works in Maine.I earned no income Maine in 2016. Will the state returns be figured on Maine income?

 
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ThomasM
New Member

Filing a joint return. Husband lives and works in Maine.I earned no income Maine in 2016. Will the state returns be figured on Maine income?

Generally you pay state tax to the state where you earned the money.  If that state is not your resident state, then your resident state may also include that income but, in turn, give you a tax credit for the amount paid to the non-resident state. So you're not taxed twice.  This is common amongst the states.

Per the State of Maine Revenue Services:

"If you are a Maine resident for the entire tax year, you must pay Maine tax on all of your taxable income regardless of its sources wages, investment income, interest income, pension, and dividends among other things.

If you are subject to income tax by another state or similar jurisdiction in another country on some of this same income, you may be allowed a credit against Maine income tax for all or some of the tax paid to the other state or jurisdiction. (See the MRS Instructional Pamphlet, "Credit for Income Taxes paid to Another Jurisdiction.")" [http://www.maine.gov/revenue/incomeestate/guidance/Residency_Guide_12.htm]

In other words, you'll pay tax to Maine for income earned in Maine.  The only wrinkle would be if, while a resident of Maine, you earned money in another state which doesn't have income tax.  In that case, you would pay income tax to Maine, because there's no tax credit to give you when you haven't paid taxes to the other state.  This situation is also common amongst the states.

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