We have foreign income for which we must pay federal taxes since there is no tax treaty between the countries. Do we also have to pay state income on this?

[GeoffreyG · Accepted solution]

Generally speaking, the answer to your question is yes.  If your foreign-source is taxable by the Internal Revenue Service (IRS) on a federal level, and is not excludable by international treaty or by other means (such as the foreign earned income exclusion claimed on Form 2555), then it will also be taxable income in your "home" state (also known as your state of "legal domicile") as well, provided that your state has an income tax.

However, each state does have its own unique tax laws, and an absolutely 100% conclusive answer to your question would require knowing the particular state and the type of foreign-source income you have.

If you care to share that information here, in a follow-up comment, I'd be glad to do some more tax research on the issue for you.

Thank you for asking about this.