I live in Vermont, but work remotely from home for a company in CT. My W2 is from this CT company. Do I need to pay income tax in Vermont AND CT?

You are only subject to the income tax of your state of residence and, if applicable, any other state/s where you physically performed work or earned income (e.g. rental property, business income).

If you are working from home in VT, you do not have to pay CT income tax even if you were working for a CT company. If your employer withheld CT tax from your wages, you would have to file a CT return in order to get a refund of those taxes.

I have the exact issue but when I just did my turbo tax return for CT they did not refund the full amount. WHY???

Change your Connecticut wages to $0 if you want a full refund of your withholding.

 

1. In the Connecticut section go to the screen "Nonresident Wage Allocation"
2. On How to you want to allocate your nonresident wages? select Use the actual dollar amounts
3. Change the Connecticut Total to $0

You may not be able to e-file with a $0 wage Connecticut return.

 

Additionally complete Form CT-W4NA and give this form to your employer to be exempt from Connecticut withholding.