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 ·Verizon FiOS
| yes, it works both ways, but is entirely dependent on how the tax laws of the specific states are written. Everyone who lives in or who has any income from a business or other source of income located in NY even if not a NY resident must pay NY income tax. Similarly everyone who lives in or who has any income from a business or other source of income located in CA even if not a CA resident must pay CA income tax. (These are only 2 examples, several other states do it too.) For a nonresident, the amount taxable in either state is the amount that was from the business source in that state. The only exception is when a nonresident lives in a state whose own tax laws do NOT have a provision for crediting income taxed in another state - there are only a few of them, but don't know which they are without researching it. So... A NY resident with some CA source income (or conversely, a CA resident with some NY source income) would split the taxes - NY income would be taxed in NY and CA income would be taxed in CA, and each state tax authority will require the taxpayer to file a copy of BOTH state returns showing that the other state actually got that share of the tax bite. The tax authorities know which are the few states where this doesn't apply, and if your mailing address is in one of those states, they won't bother you. But if you live in a state that allows out-of-state credits, they will hound you and hound you and hound you until you file the NY return and amend your home state return to take the credit.
A NY resident working in a state that doesn't have a source tax provision in its tax code owes tax on everything to NY because of the NY residency.
The issue here is that there are a handful of states who have written their income tax laws very carefully to capture taxes from non-residents who can't possibly vote the bastards out of office in the next election. Kinda like the exorbitant hotel taxes you pay when travelling. Don't like them? Well, stop by the mayor's office on your way to the airport and tell him/her you aren't going to vote him/her back into office next time if this hotel tax stays on the books...
dw |
