Taxes

The work state always gets first crack at your income. So your agency is doing it right. Some agencies have payroll software or companies that can withhold from both your work state and your home state and get it right, but most will withhold only one state. Withholding your home state only is wrong, unless you are working in a no income tax state such as Florida.

In principle, you will end up paying the higher of your work state and your tax home state. Your home state will give you a credit for income taxes paid to other states.

Yes, you are required to file in every state you've worked (not including no income tax states) and your tax home state.

The news can be worse. Several states are looking at current professional licenses and issuing tax bills based on a presumption that you have been working in their state. A couple years ago, California sent me a bill for three thousand something, completely made up as I hadn't worked there (but I did have an RN license). A phone call cleared it up, but TravelTax warns travelers about this practice and I believe he recommends filing zero returns for those states to preempt this issue. Too much work for me for what is a kind of reprehensible state practice trolling for dollars. Heck, that is why the government mandates withholding taxes, to reduce cheating. That is so effective that it is really hard to be completely missed as an employee.

Anyway, just be aware as a traveler with multiple state licenses that other states may come after you even if you hadn't worked there.