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dgaines
New Member

I started a software development business in Mississippi. If my client(s) are in another state, did I "make money in any other state"?

 
4 Replies
KittyM2
Expert Alumni

I started a software development business in Mississippi. If my client(s) are in another state, did I "make money in any other state"?

Yes, income is sourced to the state where it is earned.

 

However, depending on the amount you made in each state, you may not need to file a return, or owe taxes if you do need to file. States have different filing requirements, which can be found on their individual tax sites. You would be considered a "Non-Resident" filer in any state other than the state in which you live.

 

Be certain to complete your Non-Resident state(s) first in TurboTax, as you will receive a Credit for Taxes Paid to Other States from your Resident state. Finally, depending on the number of state returns you have to file, it may be more practical for you to use our TurboTax Desktop download product rather than TurboTax Online.

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TomD8
Level 15

I started a software development business in Mississippi. If my client(s) are in another state, did I "make money in any other state"?

But if all your work is actually (physically) performed in Mississippi, and you never physically work in any other state, then you would have NO "other state income."

 

Currently, the only exception to that is California.  Due to a recent court ruling in CA, if you are a sole proprietor and you provide services to a client located in CA, that income is taxable by CA - even if you never set foot in California.

**Answers are correct to the best of my ability but do not constitute tax or legal advice.
Anonymous
Not applicable

I started a software development business in Mississippi. If my client(s) are in another state, did I "make money in any other state"?

other states have income tax laws regarding "telecommuting"    so the question becomes how does he deliver the software to his clients

TomD8
Level 15

I started a software development business in Mississippi. If my client(s) are in another state, did I "make money in any other state"?

If a taxpayer's company is in Mississippi and he works in Mississippi, then he's not telecommuting - regardless of where his company's clients are located.

**Answers are correct to the best of my ability but do not constitute tax or legal advice.
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