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tripp2019
New Member

State Tax Allocation

I live in NC and do consulting work in NC, IN and TX.   Since TX has no income tax, can I allocate part of my income there, or will it be taxed in my home state.   Don't see anywhere in TT that address this issue.

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2 Replies

State Tax Allocation

Your resident state of NC will tax ALL your income no matter where it is earned.  What you will do is complete the non resident IN return first and then the NC return so you get a credit for the IN taxes on the NC return.  The fact that TX has no income tax is immaterial to NC. 

State Tax Allocation

A bit of added detail:

TX has no income tax.

IN can tax you as a non-resident on any income you earn from work actually (physically) performed within IN.

Your resident state of NC can tax you on ALL your income, regardless of where you earned it.

Therefore you have two state tax returns to file: a non-resident IN return AND your home state NC return.

 

You cannot pick and choose where to allocate your income.

 

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

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