My home state is Georgia, but I made a little over half my income in Louisiana. I was taxed in Louisiana as a nonresident based only on the amount I made in Louisiana, but in Georgia my total gross income was taxed, minus the resident credit for income made in the other state.
My resident credit was the lesser of the would be Georgia tax on the money I made in Louisiana, and the tax I paid to Louisiana on Louisiana income. State income tax is lower in Louisiana than in Georgia, so my credit was not enough to cover all of the money I made in Louisiana. Thus the dollar amount of taxes I then owed to Georgia is the tax owed on an income greater than the amount of money I made in Georgia, and it includes some of the Louisiana income. Since I already paid state taxes to Louisiana based on my income made in Louisiana, is this not double taxation?
Many states use this method for income made in other states and it seems off.
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It is not double taxation. It is because of the difference in the tax rates between the two states.
Example:
Work state rate is 5%.
Home state rate is 6%.
Home state gives you credit for the 5% paid to Work state. You owe Home state the additional 1%.
You come out the same as if you had worked in Home state.
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