I live in alabama but my w2 is from georgia. i paid taxes in georgia. im currently doing my state returns as an alabama resident.

[lfrancendese]

1. is there reciprocity between alabama and georgia
2. do i use the double taxed option or adjusted income option

[DianeW]

No, there is not a reciprocal agreement between Georgia and Alabama.  You will file the Georgia return as a nonresident and the Alabama return as a full year resident.  Prepare the nonresident state return first.

Resident State:  All income worldwide is required to be reported on your resident state return.  Any money that is also taxed in a nonresident state allows you to use "credit for taxes paid to another state" when you complete your resident state return.  Your resident state does not want you to pay tax twice on the same income.  The credit will be the amount of tax charged by the nonresident state or the tax that would have been charged by the resident state, whichever is less.

Nonresident State: Any money earned in a nonresident state is required to be reported on that state tax return (with the exception of reciprocal agreements which does not apply in this case).  The nonresident state will tax any income earned that is derived from that state or while you were in that state for work. 

You will allocate the taxable income for Georgia.