Please prepare your tax returns in the following order:
- Federal return
- Nonresident state return (Missouri)
- Resident state return (Arkansas)
Since you live in one state and work in another, you're required to file and pay income tax in both states. So that your income isn't double taxed, you'll claim a tax credit on your Arkansas return for the taxes you pay to Missouri. That's why it's crucial to prepare the non-resident state return first--you need to know your tax liability there before you can claim the tax credit in your home state.
Please follow this link for more information. http://blog.turbotax.intuit.com/tax-tips/i-work-in-one-state-and-live-in-another-state-what-do-i-fil...