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If I'm legal resident of a state with no state income tax, but work a W-4 job in a different state that has a very high state income tax... (lemmy.world)

submitted 8 months ago by LemmyKnowsBest@lemmy.world to c/personalfinance@lemmy.ml

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... is it normal/legal for the state I work in to withhold state income tax from my paychecks?

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[–] Fermion@mander.xyz 2 points 8 months ago* (last edited 8 months ago) (1 children)

You need to look this up specifically for the states involved. It varies. Some neighboring states have reciprocity agreements if they have a major city near a shared border. Frequently what happens is you'll have to file in both states, but one will give you a non-refundable credit for the tax amount paid in the other.

I suspect that in your situation you'll end up having to pay the full amount of income tax of the state your employer is in.

Whether that's legal: states get to do whatever they want to collect taxes.

https://www.cnn.com/2022/03/01/success/state-income-tax-ramifications-remote-work/index.html

[–] LemmyKnowsBest@lemmy.world 1 points 8 months ago* (last edited 8 months ago)

I guarantee I will not have to file in my home state because I deliberately chose that state for residency because it has no state or personal property taxes and no annual vehicle inspections.