Do I pay Maine taxes if I don't work in Maine?

[HoustonTexasEngineer]

If a person lives in Maine and works in Ma. does that person have to pay 8.5% to Maine then 5.1% to Mass?

[399083453]

Originally Posted by HoustonTexasEngineer

If a person lives in Maine and works in Ma. does that person have to pay 8.5% to Maine then 5.1% to Mass?

File a Mass a nonresident return declaring the income you earned there. Prepare that return first. Then prepare your Maine resident return - all of your income is taxable in ME because you live there. If you use TurboTax it will then prepare an "other state tax credit" for the MA tax due on that income that ME is also taxing to help avoid double taxation.

[HoustonTexasEngineer]

so that means I wont be paying 8.5% to maine and an additional 5.1% to mass? sorry ive never worked outside of Texas before.

[kellysmith]

Originally Posted by HoustonTexasEngineer

so that means I wont be paying 8.5% to maine and an additional 5.1% to mass? sorry ive never worked outside of Texas before.

You will be paying 5.1% to MA and when you file the ME return, you will get a credit for the amount you paid MA. Basically that will reduce your ME tax to the difference. For instance, if you pay MA $2000 and your ME tax is $3000, because of the tax credit, you would owe ME $1000

[HoustonTexasEngineer]

ok that makes sense. Thanks for the help.