Working from two states

[efaramarzi]

I used to work for my company fully from Texas but recently moved to Vermont since my wife got a job in the NewYork state close to Vermont. Although this year I will be working more than half of the time from Vermont, I am still considering myself as a permanent Texas resident but a tempory Vermont resident since my wife is contracted for only one year, I am still going to work from Texas for less than half of the year and Texas is the location of my permanent house, my driver's license and vehicle registrations,  the banks of my financial accounts, my doctors and dentists, permanence of my work assignments, and my social ties. I am wondering if the address in the W4 form can be set to my Texas address, and I file my federal taxes with my Texas address and my state taxes as a non-resident.

[TomD8]

Although your domicile or permanent home may be in Texas, Vermont will consider you a resident for tax purposes if you maintain a permanent place of abode (such as a rented apartment) in Vermont and you are present in Vermont for more than an aggregate of 183 days of the taxable year.  This is called being a "statutory" resident.  It is possible to be both a domiciliary resident of one state and a statutory resident of another.  https://legislature.vermont.gov/statutes/section/32/151/05811

In any case, the income you earn by physically working in Vermont is fully taxable by Vermont, whether or not you are technically a Vermont resident.

[DavidD66]

You can file your tax returns as a Texas resident.  You will need to file a Vermont part-year resident tax return and pay tax on the amount you earn while working in Vermont.  

[efaramarzi]

Thanks for your reply. Can I keep the address in my W4 form as my Texas address for the whole year or I should change my W4 form address every time I change my location?

[DavidD66]

The address you put on your W-4 doesn't have any tax implications.  Just be sure your payroll department withholds Vermont tax during the period you're working in Vermont so you don't owe a lot of Vermont tax when you file.

[TomD8]

If your employer is unable to withhold Vermont tax, you may want to make estimated tax payments to Vermont.  You can read the details of that here: https://tax.vermont.gov/individuals/estimated-income-tax

[efaramarzi]

Thanks. For the time I am in Vermont, will my income be fully taxable by Vermont considering that I am working remotely from my rental apartment in Vermont for my company in Texas? 

[TomD8]

Correct.  The income you earn from work physically carried out in Vermont is considered Vermont-source income, and is fully taxable by Vermont.

Wages & salaries are "sourced" where the work is actually performed.