I live in Texas and work remotely from Texas. However my employer is in Colorado. There were no Colorado state withholdings this year on my W2. Do I still have to file a state tax return in Colorado? Also, is the money considered earned from Colorado since the employer resides there, or is it considered earned from Texas where I live and work?
It is Texas income. Thus, you will not have to file a Colorado return on this income. It is a good question, however, because there are states that do consider out-of-state telecommuters to be working in that state (New York is notorious for this), but Colorado is not one of them. You will not need to file a Colorado return.
I have a similar question about living and working remotely in Michigan for a company based out of Georgia. Will I have to file a return and pay state income tax to both Michigan and Georgia?
@ridesbikesdaily -- Georgia does not tax non-resident remote workers. If you never physically worked in Georgia, you need only file in your home state of Michigan.
As long as you are not physically working in the state of Georgia and your employer does not withhold Georgia income taxes, there is no reason for you to file a GA nonresident return. Enter everything in the federal section and TurboTax should prompt you to fill out a resident MI tax return only. As a Michigan resident, you pay Michigan income tax on all of your income which should be reflected on your paychecks and W-2. @ridesbikesdaily
Same question here, but I live and work in Idaho, but my employer is in Oregon?
As long as you are not physically working in Oregon and your employer does not withhold Oregon income taxes, you do not have to file a OR nonresident return. Enter everything in the federal return and TurboTax should prompt you to fill out a resident ID tax return only.
Mine is a bit more complicated. My company is based in Texas, I love in Colorado - I do not work in Colorado. I work in many states across the Nation. I have worked in North Dakota, Florida, California, Oklahoma, New York - my question is, am I taxed in each state I work in - AND have to pay state taxes in Colorado?
I got hit pretty hard last year because Texas doesn't withhold state taxes, but I got hit pretty hard with Colorado state taxes and I didn't even work there.
@kelic3 Yours is more complicated but the answer is still pretty simple. You are only a resident of one state. All of your Texas sourced income is earned as a resident of Colorado. You travel a lot for work but all of that travel is seen as traveling away from your residence so Colorado still gets dibs on everything that you earn, even though it is from a Texas source. If Texas taxed the income too then you would get a deduction for the taxes paid in Texas but since they do not Colorado steps in.
As far as filing in all of the states that you worked in the answer is - it depends. Each of those states has different rules about how long you have to be working in their state in order to have to file a return. But since the income is all being taxed by Colorado and none of it was earned from sources within those many states you can make choices about filing there. If you do choose to file a New York return, for instance, then any taxes that you paid to New York would be deductible on your Colorado return.
Here is a list for the filing requirements in every state.
In future, if you do not maintain a permanent residence anywhere and you do not stay in any one location long enough to require you to file a return in that location, then you can change your state of residence to one without any state tax filing obligations.
Thank you - I dont file Federal except in Colorado - but in the link you provided - and I pressed the state of California - it says I have to file if I earned money from California - (I’m not sure if it was talking state or federal) but my employer pays me from Texas - I just travel and work as a trouble shooter in other states
You may have to file Federal taxes and you may have to file State taxes. Federal taxes are filed regardless of the state you live in. State taxes are filed based on the State's rule for taxable income based on various criteria.
In your example, if California is requiring you to file a return based on your earnings, it can only mean State taxes.
@Kelic321
Are you required to file in all those state you travel to?
Yes, but "nobody" does. See http://money.cnn.com/2013/06/28/pf/taxes/business-traveler-tax-threat/
If I work in Colorado but my permanent address is in Texas can I file taxes in Texas to avoid CO state taxes if my company does not operate in Texas?
No. Colorado can tax any income you earn from work you do within the state of Colorado.
Sine you’re a Texas resident, you’d file a non-resident tax return in Colorado.
Texas, of course, has no income tax.
If you live in one state and work in another state; that income is subject to taxation by both states. This is how it works. You file a nonresident return for the state you worked in, reporting only the income you earned there.
You report all your income on your resident state return, including the income earned in the other state. Your home state calculates tax on all your income, but gives you a credit, or partial credit, for tax you paid to the other state.
When you live in a state without an income tax (e.g. Texas), there will be no credit, since there was no Texas tax. In other words, having legal residence in a state without an income tax does not get you out of paying state tax on that income, to the state you worked in.