If you work in two different states, you will file a tax return in both the states. One state is your Home Tax State with the other state being where you were/are a part year resident. Or as I get a lot of here in Kansas City, You live in one state and work in another. In some cases, you may have even more states.
Last year I had a client (new) that lived in one state and worked in five states.
- (Interestingly enough that particular client had one W-2 and the employer withheld for all five states – Self-filers, would you know how to work that out?)
In the state that is not your tax home, you are part year resident or a non-resident; you report income you earned while in that state, to that state. If you have received only one W-2 from your employer, then use simple arithmetic based on number of days spent in the state to figure out the income that you should report to that state.
- (Of course, that in itself brings up a really interesting taxing issue. You paid your home state taxes that should have gone to the other.)
In the state that is your tax home, report your worldwide income for the full year. Also in this state, claim credit for the taxes paid to the other state/s. Hopefully, you did this or your employer did it through withholdings.
States with no income tax
The states that do not have individual income taxes are Alaska, Florida, Nevada, South Dakota, Texas, Washington, and Wyoming. In New Hampshire, you only pay income tax on Dividend and Interest income at flat rate of 5%. Tennessee does have tax on income (at a 6% rate) received from stocks and bonds not taxed ad valorem.
Alaska, Florida, and South Dakota have corporate income tax. Washington has a corporate tax called the “Business and Occupation Tax (B&O)”, which is a gross receipts tax. Texas has a franchise tax on businesses (sole proprietorships and some partnerships are exempt).
States with a flat rate personal income tax
Most states (34) have a progressive income tax, where the rate rises as an income gets larger. The following states have flat rate income tax:
- Colorado - 4.63%
- Illinois – 3%
- Indiana – 3.4%
- Massachusetts – 5.3%
- Michigan – 4.35%
- Pennsylvania - 3.07%
- Utah – 5%.
(The above rates may have changed)
Moving After Retirement
Yes This post is on top on purpose Don’t Let the Naysayers Get You Down. 
Truck-driving is a vital industry to our economy. I have been a part of that industry for 22 years and know I will always be a part of it. I even maintain a Class A CDL. As such I am very familiar with the ins and outs of the trucking industry and its related tax issues.
