Remotley working in Washington

[zareed9]

Hi,

 I live in Missouri and for the first 4 months last year I was paying into Missouri taxes with my job (w2). For the remaining 8 months I was working in Washington state (which has no state tax). I've always been a resident of Missouri. But there doesn't seem to be anywhere I can put that I was working in Washington on my turbotax forms that I can see? Therefore it appears that I am not paying state taxes into Missouri, yet I wasn't in missouri working. 

[Vanessa A]

This is because as you noted there is no state tax in WA.  So, since you are a resident of MO, you will pay taxes on all of your income from all sources to MO.  The only way working in another state is relevant is if that state taxed your income and then you would take a credit for the taxes paid in that state on your resident return.  Since WA does not have income tax, there is no credit to take.

Also, if you are working remotely, many, but not all, states consider you to be working in the state where you live or do the actual work so you again would not have any type of tax liability to the state you were working in unless you are in one of the states that do consider you to be working in the state your employer is in even if you are not physically present. 

When you say it appears as though you are not paying state taxes into MO, are you talking about your employer not withholding taxes?  It may be that they do not withhold state taxes for other states.  If this is the case, you would be responsible for making quarterly estimated taxes to MO. 

[Hal_Al · Accepted solution]

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.  

When you worked in a state without an income tax (e.g. Washington), there will be no credit, since there was no WA tax. In other words, having worked in a state without an income tax does not get you out of paying state tax on that income, to your home state.