With Disney, beautiful beaches and no income taxes, Florida seems like heaven on Earth!
But what if you live in Florida but travel to a neighboring state for work? Well, working in a state with an income tax while living in Florida means you’ll have to pay taxes to the state you earn your income from.
For Florida residents, working in a bordering state such as Georgia, Alabama or Mississippi, you’ll have to pay tax only on the income you received there. To report this, you will file a non-resident return for the state you work in when filing your taxes.
I Live in Florida and Work in Georgia
According to the Georgia Department of Revenue website, non-residents who work in Georgia or receive income from a Georgia source…
“…are required to file a Federal income tax return and required to file a Georgia income tax return… If you are a legal resident of another state, you are not required to file a Georgia income tax return if your only activity for financial gain or profit in Georgia consists of performing services in Georgia for an employer as an employee when the compensation for services performed does not exceed the lesser of five percent of the income received in all places during the taxable year or $5,000.”
That means if you have income from a job, rental income, income from entities (trusts, estates, partnerships, s-corporations, LLCs) in Georgia, then plan on filing a non-resident tax return for the state and pay Georgia taxes for that income.
Georgia Income Tax Rates (single filers):
-
1% on the first $750 of income
-
2% on income between $751 and $2,250
-
3% on income between $2,251 and $3,750
-
4% on income between $3,751 and $5,250
-
5% on income between $5,251 and $7000
-
6% on income over $7,000
Georgia Income Tax Rates (joint filers):
-
1% on the first $1,000 of income
-
2% on income between $1,001 and $3,000
-
3% on income between $3,001 and $5,000
-
4% on income between $5,001 and $7,000
-
5% on income between $7,001 and $10,000
-
6% on income over $10,000
I Live in Florida and Work in Alabama
If you’re a Florida resident but travel to Alabama for work, you are liable to pay Alabama taxes on the income earned in the state and file a non-resident return for Alabama. According to Alabama’s website, you must file a non-resident Alabama return…
“If you received taxable income from Alabama sources or for performing services within Alabama and your gross income from Alabama sources exceeds the allowable prorated personal exemption. Nonresidents must prorate the personal exemption. If your Alabama gross income exceeds the prorated amount, a return must be filed.”
Alabama Income Tax Rates (single filers):
-
2% on first $500 of income
-
4% on income between $501 and $3000
-
5% on income over $3000.
Alabama Income Tax Rates (joint filers):
-
2% on first $1,000 of income
-
4% on income between $1,001 and $6,000
-
5% on income over $6,000.
I Live in Florida but Work in Mississippi
Florida residents traveling to Mississippi will have to file a non-resident return for Mississippi. According to Mississippi’s website , non-resident filers must;
“Include all income on your Mississippi non-resident return. If you perform services partly in and partly out of the state, only the wages you paid for the services performed in Mississippi are subject to Mississippi income tax. The W-2 forms issued to you from your employer(s) should indicate the state in which the wages were paid, along with the wages you earned in that state.”
Mississippi Income Tax Rates (single filers):
-
3% on first $5,000 of income
-
4% on income between $5,001 and $10,000
-
5% on income over $10,000.
Filing a joint tax return for Mississippi? The rates will remain the same.
Avoid confusion and file with RapidTax
Interstate taxation can get confusing, especially if you live in a state without an income tax, like Florida. The general rule of thumb is that you will have to file a non-resident return in the state you worked in but did not live in and report only the income earned in that state.
If you’re a Florida Resident, you’ll need to file your federal taxes. If you worked in states outside of the Florida lines, don’t forget to file a non-resident return for those states.
Ok, so I live in Florida permanently. I am starting a new remote position with a company based in California. I will go for training (4 days) and maybe 10 days a year for meetings. Also, I will travel maybe 4-5 times a year for conferences. My company is thinking they need to have a legal entity here in the State of Florida in order to hire me, but have not yet. In Florida as you know, I have never paid State taxes. How will this position effect me and my tax situation? Will I be required to now pay some kind of non-resident state tax to California? If so, I may reconsider this position. Thanks
Hi Giovanni,
Congratulations on the job offer!
When it comes to state taxes, under general circumstances, you are only responsible for state taxes where you reside and where you physically earn an income. If you take this position, you may only be liable for California state taxes for the duration that you are working (physically) in the state of California. In your case, as stated above, that would only be during your training and on the few business trips you take there throughout the year. You will not be liable for CA state taxes while working remotely from Florida.
That being said, IF your employer does withhold California state taxes from your paychecks for times when you are not actually working in the state of CA, then you would file a CA non-resident state tax return along with your federal tax return and report all withheld taxes. This will allow a refund to be issued to you.
I live in Florida and work as a remote salesperson for a software company headquartered in Iowa and travel around the country to perform sales demos, what state withholdings would I have, if any?
Hi Curt,
Lucky for you, you live in an income-tax free state so when you are working remotely (and not travelling), your income is not taxed. The situation becomes a bit more complicated once you begin to travel from state to state for your demos. You should know that each state has their own guidelines. There are some states that see you as liable for withholding the moment you begin working in that state. Then there are other states which have a threshold in place and once you have exceeded that threshold of working in that state, you are are then liable for state withholding. Most thresholds will be 30 days. This is all depending on how your employer would like you to document where you are travelling and earning an income. It will all come down to the states listed on your W-2 form. These are the states that have withheld from your paychecks over the course of the year. You can easily check with each state’s government website and even contact them directly for specific regulations. Here is Iowa’s to start you off since you mentioned that is where your company is headquartered.
Would the same be true if I live in FL and work remotely but my company is based in GA?
Hi Maria,
That is correct. Assuming that you have a similar situation to Curt, you are only responsible for state taxes where you physically earn an income and where you physically reside. In your case, Florida does not apply as it is income-tax-free. However, keep in mind that travelling to Georgia for business could then cause you to be liable for state taxes for the duration of your stay.
If your employer IS withholding GA taxes from your paychecks, you will then file a non-resident GA tax return along with your federal tax return so that you can claim that money back.
I work remotely for an employer in New Jersey. I am required to go up there every month for a week. They do not pay any of my travel expenses. So I physically work and live in Florida. I should not pay New Jersey state taxes, correct?
Hi Mary,
That is correct. You are not subject to NJ state taxes. The most your employer could be withholding is for the income earned in that one week you are working physically in New Jersey. However, that is highly unlikely as your employer would be obliged to go through more trouble than it is worth with the paperwork involved. That being said, if that is the case, you would just file a non-resident NJ state tax return along with your federal tax return and report that income.
If I live and work in Florida but my employer is in Maine, Do I pay Maine state income taxes?
Hi Amy,
You care only responsible for taxes where you are a resident and where you physically earn an income. In your case, you are not responsible for Maine taxes just because your employer is based there.
If I live part time in Texas (where there is no state income tax) and part time in NY, but have no earned income in NY, will I have to pay NY income tax, or even file a return there? I will have some rental income in Texas and draw retirement from accounts established in Texas and from prior Texas employment.
Hi William,
The first thing you’ll want to do is make sure that you are a resident for tax purposes of both states. I say this because although you may live in each state for half the year, there are specific guidelines for each state when it comes to residency for tax purposes. You don’t want to be responsible for paying NY state tax if you don’t absolutely need to. That being said, if you are considered a resident of both Texas and New York, then you will need to file a resident state tax return for New York. Take a further look at another article on our blog about what to do if you’re a resident of two states at once. This should clear up any questions that you have. If you are still feeling unsure, feel free to contact us via free live chat or telephone support.