live in Memphis, work in AR, pay state income tax? (insurance, unemployment)

[fatbench]

Live in Memphis, work in AR, pay state income tax? how about vice versa?thanks,

[Dd714]

You will pay state income tax to AR. OTher way around - you will pay state income tax to AR.

[fatbench]

so if you live in a state and work in another state, both states levy income taxes, then you have to pay both states or there is an agreement between the states that you only have to pay one of them?

[tigergal]

Originally Posted by fatbench

so if you live in a state and work in another state, both states levy income taxes, then you have to pay both states or there is an agreement between the states that you only have to pay one of them?

There is no income tax in Tennessee.

[beachbyrd]

I thought you only pay income tax in the state you live in...

[strumpeace]

Some states apply a payroll tax to wages earned in that state. We do not have payroll taxes or state income taxes in Tennessee.

[Dd714]

Originally Posted by beachbyrd

I thought you only pay income tax in the state you live in...

That is incorrect. You pay state income tax to the state the income was earned in. In the OP's example the AR employer will withold state income tax regardless of the state he lives in, and he will be required to complete an AR return if he lives in TN.

Edit because I just know some accountant is going to come on an disagree and give some boring 3 paragraph disertation on state tax laws - GENERALLY you pay tax to the state the income was earned in but state to state they have different tax laws and recipricocity agreements between states. And TN has a capital gains income tax. Still, if you work in AR and live in TN you will be required to pay AR state income tax.

[alwaysok]

You pay State Income Tax (SIT) where you work and pay State Unemployment Insurance (SUI) where you live. Some states like California require the employee to pay the SUI tax while other states require the Employer to pay the SUI tax.

Some state have reciprocity agreements in place to eliminate the need to pay taxes to 2 different states.

For example, West Virginia has a reciprocity agreement in place with Kentucky, Maryland, Ohio, Pennsylvania and Virginia.

So if you lived in West Virginia and worked in Ohio, you would only have to pay taxes in West Virginia. But if you lived in West Virginia and worked in Arkansas, you would have to pay SIT tax to Arkansas and SUI tax to West Virginia.

I do payroll for a living and I love it.

[joninclay]

For example, West Virginia has a reciprocity agreement in place with Kentucky, Maryland, Ohio, Pennsylvania and Virginia.

That is correct. My grandparents lived in southeastern OH. My grandmother worked in Huntington, WV, and my grandfather worked in Ashland, KY. What you said is correct.

As for the Memphis vs. AR vs. MS situation, it's simple: if you live OR work in either AR or MS, you will pay a state income tax for that state. My dad lives in Tipton County, TN, and used to work in Mineral Wells, MS (now THAT was an awful drive). He had to pay MS state income tax for the few months that he worked there.

[ajax7]

Let's say I work as a consultant for a company based in CA that pays me by the hour to do work in perhaps 10 different states over the course of any year. I live in TX

Who do I owe State tax?

Do pro athlete's pay income tax to every state they play in? Does it matter where their W2 is generated?