How do I file taxes if I work in two different states?

You generally need to file a tax return in every state where you earned income, plus your state of residence. Here's how multi-state filing works:

The basic rules:

• Resident state: You file a resident return in the state where you live. Your resident state taxes your worldwide income (all income from all sources).
• Non-resident state(s): You file a non-resident return in each state where you earned income but don't live. You're taxed only on income sourced to that state.
• Credit for taxes paid: Your resident state typically gives you a credit for taxes paid to other states, preventing double taxation. This credit is usually limited to the lesser of the tax paid to the other state or the tax your home state would have charged on that income.

Common multi-state scenarios:

• Remote worker with office in another state: Some states have a "convenience of the employer" rule (notably New York and several others) that taxes you based on where the employer is located, even if you work remotely from another state. This can result in double taxation if your home state doesn't offer a full credit.

• Reciprocal agreements: Some neighboring states have agreements where you only pay tax to your resident state. For example, NJ and PA have reciprocity — if you live in NJ and work in PA, you only owe NJ state taxes. You'd file a PA exemption form with your employer.

• Traveling workers: If you travel to multiple states for work (consultants, sales reps), you technically owe taxes in each state based on days worked there. Many states have a de minimis threshold (e.g., fewer than 30 days) below which you don't need to file.

How to allocate income:

Most states use a formula based on days worked in that state divided by total working days. If you worked 60 days in State A and 240 days total, State A can tax 25% of your income.

Filing tip: Use tax software that handles multi-state returns (TurboTax, H&R Block). Manually calculating credits and allocations is error-prone. Also check if your employer is withholding correctly for each state — review your W-2 boxes 15–17, which should show state wages and withholding for each state.