How are taxes taken out...

[jodyangel, RN]

Hi all. So when you travel to another state, do you pay state taxes in both states?

[NedRN]

Yes. The work state has first claim and taxes paid their will be credited to your home state. In effect, you will always pay the higher rate of the two split between the two states and file in both states (or all work states and home state). Only if you reside in a state with no income tax and work in another will this not be true.

Agency withholding has to be checked. Many agency can only run one state (can only withhold for taxes due in one state). This should be the work state, not the state the agency has their office in. If the agency does multistate taxes, you should see a withholding on your payroll report in the work state and the home state. This way gets you the closest to the correct total state tax withholding so you don't have to come up with extra money when you file.

If you don't have a tax home (itinerant status), you only have to pay state taxes in the work state. But then you would have to pay taxes on those stipends!