How do I fill out new employee tax forms, including W-4, when I permanently live in one state and temporarily live in another? (2024)

How do I fill out new employee tax forms, including W-4, when I permanently live in one state and temporarily live in another?

I work in the state in which I temporarily live, but plan to return to my permanent address/state within the year. Once I return to my permanent address, I plan to resign from my current job, which is within the state where I temporarily live.

‎May 31, 201911:14 AM

It depends on which states you are asking about*.The general rule is: your reportall your income on your home state tax return, even the income earned out of state.You file a non-resident state return for the state you worked in and pay tax tothat state. Your home state will give you a credit, or partial credit, for whatyou paid the non-resident state.

So, do withholding for the state you are working in.

*Some states have reciprocal agreements; in which case you would withhold for your permanent residence state.

The question cannot be answered, completely, until we know which states you are asking about, Which one do you live in which do you work in.

You also need to check with your employer if the will withhold for your home. So will tell you they only do work state.

That said:

Q.But are you still filling out a w-4 for the state you live in and getting both state taxes with held??

A. General rule: No. You only do the work state. The credit that your home state gives you will wipe out any tax on that income, so withholding is not necessary. But, for example, if the work state has a 2% tax rate and the home state 4%, the credit will not be enough. So, you either need to do withholding or make quarterly estimated payments.

I formed a domestic PLLC incorporated in TX. I live in TX that has no state tax.
1. If I work as an independent contractor in a different state, where I only stay temporarily to render my service, do I still pay state tax on the earned income on 1099?

thank you

Q1. If I work as an independent contractor in a different state, where I only stay temporarily to render my service, do I still pay state tax on the earned income on 1099?

A.1. Yes. As explained above, you are required to file a state return and pay state tax to any state that you physically work in. The fact that your hoe state (TX) does not have an income tax does not get you out of paying state tax.

Q. 2. Can I still use my domestic PLLC for this purpose? Professionals living in one state may often travel to different states for job. What kind of PLLC are they required to form?

A2. This is a tax forum, not a legal forum. For tax purposes, an LLC is a disregarded entity. You file as a self employed person on your federal (Schedule C) and state returns.