I live in Alabama work in Georgia but it's saying I have to pay state taxes for both states why do I have to pay? And do I have to file state taxes for both states

[DanielV01 · Accepted solution]

Yes, you have to file taxes in both states.  You file a Georgia nonresident return because you work in Georgia.  Alabama will also tax all of your income because you are a resident of Alabama.  However, AL will give you a credit for the taxes you must pay to GA for the income you earned in Georgia.  For this reason, you want to prepare the Georgia return first so that Turbo Tax can correctly calculate the credit on your Alabama return 

As far as paying taxes to both states, it depends.  If you didn't have enough Georgia tax withheld on your paycheck, then you would owe some to Georgia.  And if your tax liability in Georgia is less than what it is in Alabama, your credit for Georgia would still leave you a balance due to Alabama as well.  

However I recommend deleting the Alabama return and completing the Georgia nonresident return first.  Then start the Alabama return.  You may still owe Alabama even with this, but hopefully it is very little if that's the case.

[bgwolfe]

I have a scenario where I moved from Alabama to florida(doesn’t have tax) January 1 2017...my employer withheld Alabama state taxes all year. How can I get back all the money that I paid to Alabama when I shouldn’t?!?  My employer is not willing to do anything at this point. Thank you

[xmasbaby0]

Did you work in AL but live in FL?  

[Spud]

I have a similar situation in 2020 with the same states.  The exception is that I was a resident of GA for 4 days at the end of the year--I sold my AL residence on 12/28 (purchased the GA home on 12/16).  Does this change your answer below?  Would I still file a GA non-resident return?

[DanielV01]

@Spud  While technically speaking you are a part-year resident of Georgia (although all of your income is taxable there regardless, either as a nonresident with Georgia income or as a resident with Georgia-only income) as well as a part-year resident of Alabama, in practical terms you can file as a Georgia nonresident and an Alabama full-year resident.  Since the move was so late in the year, you probably did receive all of the income while you still were living in Alabama.  In addition, all of your income will be taxable and taxed by Georgia no matter how you file the Georgia return.  And Alabama will give you a credit for the tax you pay to Georgia on  the income earned there regardless.  Your end result should not be significantly (or inaccurately) affected.