I live in Tennessee but work in Alabama. From some short googling, I read that Alabama does not have a tax reciprocity agreement with Tennessee and therefore I would have to file in Alabama due to the state having state income tax. Is this true? I have seen a few similar questions on this site that state that I would file with Tennessee but none have mentioned the reciprocity agreement.
You'll need to sign in or create an account to connect with an expert.
Since you work in Alabama but live in Tennessee, you will need to file a nonresident Alabama state income tax return.
Tennessee does not have a state income tax so there would not be a Tennessee state return to file.
There is no need for a reciprocity agreement between TN and AL, because TN has no state income tax. If you live in TN but work in AL, you file a non-resident AL tax return for the income earned while working in AL.
The general rule is: your report all your income on your home state return, even the income earned out of state. You file a non-resident state return for the state you worked in and pay tax to that state. Your home state will give you a credit, or partial credit, for what you paid the non-resident state.
Since your home state, Tennessee, does not have an income tax, you do not file a resident state return and you do not get a credit for tax paid to AL.
Still have questions?
Questions are answered within a few hours on average.
Post a Question*Must create login to post
Ask questions and learn more about your taxes and finances.
KirstenWheat
New Member
ebd256
New Member
mpwolfe13
New Member
stephov
New Member
leannmoyer1
Returning Member