My experience is brenda's. Being in Chicago, we have employees who live in Indiana and pay Indiana income tax.

Also, my sister lives in Mississippi but worked in Tennessee. She paid Mississippi income tax.

Yeah, I think I've heard of others working in the good ole crazy state you're talking about, and state taxes are still happening. There's just no way to avoid them unless you live AND work there.

Though, disclaimer: Although I may present myself like I know everything about everything, and in a supercilious manner to boot, I actually know jack all about nothing, and am usually talking out of my ass. Why even bother posting then? er. good question, actually.

But, I have heard that (about mystery state in question) from the vague and nefarious "them"...

vw, if you're still around, thanks for posting about Annie's Attic free pattern of the day. I've snagged a couple off of there. Today's is pretty: [link]

Great, Cashmere. Did you learn this the hard way?

Well, we had that roof claim before Owen was born--BIG ASS check, no claiming it as income because it was essentially to replace something that was ours and not additional income. Although this knowledge is DH's (as his experience with property casualty insurance). Still, best to call the pros and make sure--especially since you have the other questions.

In our case of city taxes, we have to pay based on residence--even though DH's job pays into a different municipality which we do not get back. They apply it to our city tax but we do have to pay substantially more.

This reminds me that I have a few days left to file the city and school taxes which we do have to pay, having already spent the state and fed returns. *sigh*

Hate to say it, but I'd be very surprised if that was the case. My mom, among others, lived in one state and worked in another for years (and much of my company works in multiple states, often not including their own) and I've always seen it based on state of residence.

Mmm. It's so confusing and up in the airy, it's making me nuts. It would just be nice to know there'd be eventual effective compensation for the increased commuting costs.

I've heard the exact opposite, here--that the income is taxed by the state in which you work. A lot of people move to southern NH, because there is no sales tax, and no state income tax (although property tax is generally way higher in NH), then they find out they still have to pay their MA state taxes, because they work in Boston.

Scott's new boss lives in our state and has been working in the neighboring state for quite some time, so he'll likely know, but he hasn't had a chance to ask yet, and regardless, we'll want to confirm it with the tax people, before we make any changes to our withholding.

The state's Department of Revenue site seems to indicate we only have to file MA income taxes for income earned in MA, but it doesn't explicitly rule out out-of-state income.

A Massachusetts full year and/or part-year resident is required to file a tax return with the state of Massachusetts if his/her Mass gross income is in excess of $8000. >[link]

Even if we aren't taxed on the out-of-state income, filing the 2006 taxes in 2007 will be tricky, because through this week, the income came from MA.

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vw, if you're still around, thanks for posting about Annie's Attic free pattern of the day.

I love them. Some of the patterns are WACKY, but some are really good.

Cindy, I also think that work travel is tax deductible but not commuting expenses--so that sucks.

I've heard the exact opposite, here--that the income is taxed by the state in which you work. A lot of people move to southern NH, because there is no sales tax, and no state income tax (although property tax is generally way higher in NH), then they find out they still have to pay their MA state taxes, because they work in Boston.

A lot of cities have considered things like commuter taxes to solve this problem, maybe Boston was successful?

It's a big issue, actually, with people earning money in the cities but not contributing to the tax base, and thus any of the infrastructure/services they use, because they go back to their homes in the suburbs or neighboring states.

I do hope this works out your way, though, especially since I'm given to understand that there in the Soviet Republic of Taxachusetts (isn't that the neocon line?) you pay some pretty hefty ones.

Cindy, DexH files in over 37 states every year becaise of the whole travel/work thing. Alas, when he works in states with no income tax, the excess goes back onto the home state. Wheeee.