If I live in Texas and worked in Oklahoma for an Oklahoma-based company, why do I owe Oklahoma taxes?

[queenwasp]

In box 17 it shows an amount for state income tax

[DS30]

Unfortunately yes, you will need to file an OK nonresident state income tax return to report any OK-source earned income.

If you worked in OK, then regardless of where you lived or where the company is located, your earnings from this work are considered OK-source income. Earned income is sourced where the work is performed. Usually, you will get a state income tax credit on your home states income tax return but since TX has no state individual income tax filing requirement, no credit is available to you in your home state.

To add a state filing in TurboTax, just select the "state taxes" tab and "add a state"

Also, make sure that you select "yes" to the question " Did you make money in any other states?" under the Personal Information section in TurboTax (see screenshots)

[CodeGuy]

This really depends.

Just because you cross the border and work for an OK company doesn't necessarily mean you pay OK taxes. Technically, you're still a Texas resident. This is definitely a question you should ask your CPA.

[NCperson]

@CodeGuy - states require tax if your live or work in that state.  

If you work in OK, even if you don't live there, you file a "non-residency" tax return.  TX does not have state income tax, so there is nothing to file there. 

In states where there is a state income tax in both states, it works this way:  You pay tax in the state where you work and then file a 2nd tax return in the state where you live.  The state where you live will calculate a credit based on the state wher you work, so that you are not taxed by both states on the same dollar of income.

https://oklahoma.gov/tax/individuals/file-taxes.html

from the OK Department of Revenue website: 

WHO IS REQUIRED TO FILE?

1. If you live in Oklahoma: Does your gross income earned in Oklahoma or outside of Oklahoma exceed the Oklahoma standard deduction?
2. If you don’t live in Oklahoma: Does your gross income generated from Oklahoma meet or exceed $1,000?

If you answered “Yes” to either of these statements, you are required to file an Oklahoma income tax return. 

[CodeGuy]

It also depends if your company is based in Oklahoma or Texas.

Again, talk to your CPA. 

You probably will have to file a non-residency return and pay taxes.

[TomD8]

@CodeGuy wrote:  "It also depends if your company is based in Oklahoma or Texas."

No, it doesn't.  Any income you earn from work physically carried out from a location in Oklahoma is fully taxable by Oklahoma.  Doesn't matter where the employer is located.

[CodeGuy]

Wrong. If your company is based in Texas and your domicile is in Texas, why would said company withdraw state income tax if you're simply working on a job site in Oklahoma?

Example: wedding musicians that travel from Dallas to Tulsa to play a wedding for an entertainment company based in Austin would NOT pay taxes in OK.

If you work at Walmart in Choctaw OK and live in Denton, Texas, the HR dept. would take state income taxes out... and rightly so.

Big difference.

[TomD8]

Your own state income tax obligations and your employer's tax withholding are two different things.

Your state tax obligations have nothing to do with what your employer does or does not withhold. 

In your example, the wedding musicians would absolutely owe OK income tax on the income they earned in Tulsa - regardless of whether or not their employer withheld OK taxes. 

Some states (for example Illinois and Wisconsin) have "reciprocity" agreements, under which a taxpayer who lives in one state and works in another pays income tax only to his/her home state, but OK and TX have no such agreement.

[NCperson]

@CodeGuy on the muscian example, look at sports teams....The Dallas Cowboys are owned by a TX based company.  Every time the Dallas Cowboys play a game in another state, each and every player has to pay tax to the state where the game was played, as they WORKED in that state.  And in fact most of these players file taxes in many. many states as their work takes them to a number of states over the course of the season.

[CodeGuy]

That is completely and thoroughly incorrect.

Football players in the NFL would be a completely invalid example as there are SPECIFIC laws that tax professional athletes (aka the "Jock Tax").

I have been in the largest event bands in the United States and I can tell you that there has been literally not one musician in the history of wedding musicians that has paid state income tax for playing a date contracted by party A in Texas / Florida (or other state) and Party B  in a state with state income tax.   With that said, I'm sure that is NOT the case with large acts say for example Bon Jovi in which he is the only party and is working in every state.

[TomD8]

@CodeGuy wrote:  "I have been in the largest event bands in the United States and I can tell you that there has been literally not one musician in the history of wedding musicians that has paid state income tax for playing a data contracted by party A in Texas / Florida (or other state) and Party B  in a state with state income tax."

I'm not sure how you would know that.  In any case, all we can do in this forum is tell you what the tax laws require.  Whether you or anyone else chooses to follow those laws is up to you and to them.