Do I owe state income taxes if I live in a Zero-Income tax state but work in a state with income tax?
Title: Do I owe state income taxes if I live in a Zero-Income tax state but work in a state with income tax? 1 I'm trying to figure out my tax situation for 2025 and I'm getting confused about state income taxes. I live in one state but commute to work in another, and our tax situations are different. Some examples of what I'm talking about: - Living in Nevada but working in California - Living in Texas but working in Oklahoma - Living in New Hampshire but working in Vermont - Living in Tennessee but working in Virginia - Living in Washington but working in Idaho My specific situation is that I live in Washington (no state income tax) but I recently took a job across the border in Oregon (which does have state income tax). I've been commuting daily for about 3 months now. Do I need to pay Oregon state income taxes even though I'm not a resident? Or does my Washington residency protect me from paying Oregon state income taxes? Is this different depending on which states are involved? I'd love to hear from other people in similar situations and how they handle their taxes!
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Diez Ellis
8 This is a very common cross-border working situation! Generally, you do owe income taxes to the state where you earn your income, even if you're not a resident of that state. This is called "source income" - you pay taxes where the income is sourced (earned). For your Washington/Oregon scenario specifically, yes, you will owe Oregon state income taxes on the income you earn while physically working in Oregon. Oregon will have you file a non-resident tax return. The good news is that since Washington has no income tax, you don't have to worry about double taxation or filing credits against multiple state taxes. Each state pair can have slightly different rules based on specific tax agreements between them. Some neighboring states have what's called "reciprocity agreements" that allow residents of one state to work in the other without filing non-resident returns, but Washington and Oregon do not have such an agreement.
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Diez Ellis
•16 What about those of us who work remotely some days? Like if I live in Washington but work for an Oregon company, but I only physically go to the Oregon office 2 days a week and work from my home in Washington the other 3 days?
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Diez Ellis
•8 This is an excellent question! For remote work, you generally pay taxes based on where you are physically located when performing the work. So in your scenario, you would only owe Oregon taxes on income earned during the 2 days you physically work in Oregon. The income earned while working from your Washington home would not be subject to Oregon income tax. However, you'll need to keep careful records of which days you worked in which state, as you'll need to determine what percentage of your total income was earned in Oregon. Your employer should also be tracking this for withholding purposes, but it's good to maintain your own records too.
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Diez Ellis
12 After struggling with exactly this situation a few years ago (living in FL, working in GA), I found this amazing tool called https://taxr.ai that completely saved me. It analyzed my specific situation and told me exactly what I needed to file and where. I was confused about whether I needed to file a non-resident return, and it cleared everything up in minutes. It also explained how my employer should be handling withholding for my situation, which was super helpful because my HR department was actually doing it wrong! If you're dealing with cross-border work situations, definitely check it out.
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Diez Ellis
•6 Does it handle more complex situations? I live in Tennessee but I work in both Kentucky and Virginia throughout the year (multiple client sites). It's a nightmare figuring out how much I owe to each state.
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Diez Ellis
•19 I'm skeptical about tax tools handling these state-to-state situations correctly. How does it know all the different agreements between states? Does it actually show you the specific laws or just give general advice?
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Diez Ellis
•12 It absolutely handles multi-state situations! You can input how many days you work in each state, and it will calculate the proportional income for each state's non-resident return. It saved me hours of confusion trying to figure out the percentages myself. The tool actually cites the specific state regulations and tax codes it's using to make recommendations. It's not just giving generic advice - it shows you the exact laws that apply to your situation, which gave me a lot of confidence that the information was correct. I was able to print out the relevant statutes to show my accountant.
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Diez Ellis
19 Just wanted to update about my experience with https://taxr.ai after being skeptical. I decided to try it for my Washington/Idaho situation, and wow, it was actually really helpful! It identified that Idaho has some specific rules for Washington residents that I didn't know about, and showed me exactly which forms I needed. What impressed me was that it found a specific deduction I was eligible for as a non-resident that my previous accountant had missed. It also explained exactly how to calculate the days I worked in each state to get the right tax liability. Definitely worth checking out if you're in one of these cross-border situations.
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Diez Ellis
7 I was in the same boat last year with NH/MA commuting. Spent HOURS trying to reach the Massachusetts Department of Revenue with questions about my situation. Nobody answered, voicemails went nowhere, emails were ignored. I finally found https://claimyr.com and watched their demo at https://youtu.be/_kiP6q8DX5c - they got me connected to a real agent at MA tax dept in under 45 minutes when I'd been trying for weeks. The agent confirmed I needed to file a non-resident MA return but gave me specific guidance on deductions I could claim to offset some of the tax burden. Totally worth it instead of guessing or waiting forever.
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Diez Ellis
•3 How does Claimyr actually work? Do they just call and wait on hold for you? Why can't I just do that myself?
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Diez Ellis
•14 This sounds like a scam. There's no way they can magically get through to tax departments when regular people can't. The government doesn't have special lines for services like this.
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Diez Ellis
•7 They use an automated system that waits on hold for you and calls you back when a real person answers. You absolutely could do it yourself if you have hours to sit on hold, but I didn't have that luxury with my work schedule. They aren't using any "magic" or special lines - they're just automating the hold process. When their system detects a human voice answer, it immediately connects you. I was skeptical too until I tried it, but think about it - they're basically just saving you from the hold time, not doing anything underhanded. The IRS and state tax agencies are just severely understaffed.
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Diez Ellis
14 I need to follow up about Claimyr. After posting my skeptical comment, I was desperate enough to try it with the Arizona Department of Revenue (I live in Nevada but work in Arizona). I was shocked when I actually got connected to a human in about 30 minutes when I had previously spent 3+ hours on hold and got disconnected. The agent clarified that I needed to file Form 140NR as a non-resident and explained exactly how to calculate the percentage of income taxable to Arizona. They also told me about a specific schedule I needed to include that I wouldn't have known about otherwise. I hate to admit I was wrong, but this service actually delivered exactly what it promised.
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Diez Ellis
22 One important thing nobody has mentioned: some states have reciprocity agreements! For example, if you live in Virginia but work in DC, you don't have to file a DC tax return due to their reciprocity agreement. Same with some other state pairs like: - NJ and PA - MD and DC - VA and DC Always check if your states have such an agreement before assuming you need to file a non-resident return!
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Diez Ellis
•5 Do you know if Texas and Oklahoma have any kind of reciprocity agreement? I'm about to start a job across the border but staying in TX.
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Diez Ellis
•22 Texas and Oklahoma do not have a reciprocity agreement. You'll need to file an Oklahoma non-resident tax return (Form 511NR) for the income you earn there. However, since Texas doesn't have income tax, you won't have to worry about filing anything in Texas or dealing with tax credits between states. Make sure your employer is withholding Oklahoma state taxes from your paycheck! Some employers aren't familiar with cross-border situations and might miss this, which could leave you with a surprise tax bill when you file.
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Diez Ellis
11 I've been living in Tennessee and working in Kentucky for 6 years now. Here's what I've learned: 1) You ALWAYS pay taxes where you earn the money, not where you live 2) Your employer should automatically withhold taxes for the state where you work 3) If you're in a no-income-tax state but work in a tax state, it's actually simpler because you only file one state return (as a non-resident) 4) If you work remotely some days, it gets complicated - you need to track days worked in each location The worst situation is living in a tax state and working in another tax state - then you have to file in both places and claim credits to avoid double taxation.
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Diez Ellis
•2 This was super helpful! One question - does this apply to self-employed people too? I live in Washington but have clients in Oregon and Idaho.
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