Living in a tax-free state doesn’t mean you aren’t responsible for income taxes if you work in a bordering state.
Texas is an income tax-free state. Fantastic, right? It is for residents of Texas who both live and work in the state. For those that live in Texas but work in bordering states such as Louisiana, New Mexico or Oklahoma, there is an income tax to pay.
If you live in Texas but work in a different state, it’s best to learn the income tax details of the state you work in and the importance of filing a non-resident return for that state.
I Live in Texas but Work in Louisiana
If you work in Texas but travel to Louisiana for work, you will need to file a non-resident state return for Louisiana reporting all income earned from Louisiana sources.
Personal Louisiana Income Tax Rate:
Single Taxpayers:
- 2% on the first $12,500 of taxable income
- 4% on taxable income between $12,501 and $50,000
- 6% on taxable income of $50,001 and more
- For those married filing jointly, the rates are the same, the income brackets are just doubled.
For more on Louisiana’s income taxes, visit the Louisiana Department of Revenue website
I Live in Texas but Work in New Mexico
If you are one of the many people that lives in the Lone-star state but travels to New Mexico for work, you will need to file a non-resident state return for New Mexico reporting all income earned from New Mexico sources.
Personal New Mexico Income Tax Rate:
For Single Individuals:
- 1.7% on first $5,500 of taxable income
- $93.50 plus 3.2% of excess of income over $5,500 and below $11,000
- $269.50 plus 4.7% of excess of income over $11,000 and below $16,000
- $504.50 plus 5.7% of excess of income over $16,000
For married filing jointly:
- 1.7% on first $8,000 of income
- $136 plus 3.2% of excess of income over $8,000 and below $16,000
- $392 plus 4.7% of excess of income over $16,000 and below $24,000
- $768 plus 5.7% of excess of income $24,000
For married filing separately:
- 1.7% on first $4000 of income
- $68.00 plus 3.2% of excess of income over $4000 and below $8000
- $196 plus 4.7% of excess of income over $8000 and below $12,000
- $384 plus 5.7% of excess of income over $12,000
For more on New Mexico’s income taxes, visit the New Mexico Taxation and Revenue Department website
I Live in Texas but Work in Oklahoma
If you live in Texas but make frequent visits to Oklahoma for work, you will need to file a non-resident state return for Oklahoma reporting all income earned from Oklahoma sources.
Personal Oklahoma Income Tax Rate:
Oklahoma cut income tax rates in 2009 by more than 20%.
For single taxpayers and couples filing separately:
- 0.5% on the first $1,000 of taxable income.
- 1% on taxable income between $1,001 and $2,500.
- 2% on taxable income between $2,501 and $3,750.
- 3% on taxable income between $3,751 and $4,900.
- 4% on taxable income between $4,901 and $7,200.
- 5% on taxable income between $7,201 and $8,700.
- 5.25% on taxable income of $8,701 and above.
For married joint filers, heads of households and qualifying widows/widowers:
- 0.5% on the first $2,000 of taxable income.
- 1% on taxable income between $2,001 and $5,000.
- 2% on taxable income between $5,001 and $7,500.
- 3% on taxable income between $7,501 and $9,800.
- 4% on taxable income between $9,801 and $12,200.
- 5% on taxable income between $12,201 and $15,000.
- 5.255 on taxable income of $15,001 and above.
For more on Oklahoma’s income taxes, visit the Oklahoma’s tax commission website
How Do I File If I am married and work in a different state than my spouse?
If you live in an income tax free state (like Texas) and your spouse works in a state with income taxes while you do not, you can file a joint federal tax return with your spouse and file separate state returns.
Don’t forget to File Federal Taxes along with your Non-Resident State Taxes!
Living in Texas may mean you aren’t in tune with the state income taxes of your neighboring states. If you are just starting a job in one of these states while still holding residency in Texas, you’ll still have to pay state taxes. You can get started on both your federal and state taxes and file your taxes anytime with RapidTax.
Photo via M Glasglow on Flickr
I live and am based in Texas but from time to time have to visit another office of my company in PA. My accountant is telling me that for these 3 to 4 days trips 3 to 4 times a year, I have to file a PA tax return, is this the case?
You may want to investigate the tax rules that apply to PA. Since you worked in PA but did not reside there, you may have to prepare a Non-resident PA return.
My Husband and I live in Texas and I work for a retail branch headquarted in Texas but located in OK, My accountant is making us pay in more to OK state tax because of our joint income. That doesn’t sound right, how can he/we be penalyzed by a state where he doesn’t live or work. It should only be based on my income.
If you received a W-2 form from your retail branch, whether or not you will need to file your OK state return, will be dependent on whether your company took out state taxes for Oklahoma. If box 15 indicates that you earned income in Oklahoma, then you would need to file your Oklahoma state tax return, as for the increase in fees with your accountant you can choose to have your return filed and processed elsewhere if it has become expensive. We, however do offer additional services apart from our base fee for your tax return forms, as Professional Reviews for $29.99 or our CPA Review as $99.99. If you would like any further assistance, please feel free to contact us by phone at (877) 289-7580 during our hours of business Monday-Friday, 10am-5pm EST. (excluding holidays).
In regards to working in Oklahoma, or even a border state to Texas. Is there not a minimum that has to be met before paying OK state tax? For example, if i work there for 2 weeks every 3 months. Would i be required to still pay state tax?
Oklahoma residents are required to file an Oklahoma income tax return when they have enough income that they must file a federal income tax return. Nonresidents are also required to file an OK income tax return if they have at least $1,000 of income from an OK employer or other source.
I live in Texas but worked in Oklahoma a few months in 2016. I noticed that my employer took out a total of $400 for Oklahoma state taxes for the time I was working there. Should I be receiving a w-2 for this? I want to file my taxes already, but I didn’t know if I still had to wait for a w-2 from Oklahoma.
It is best to prepare your non-resident Oklahoma return from the State information reported in boxes 15-20 of your W-2 income statement. Rapidtax handles Non-resident returns. Once you have received your income statements, click here to get started with the preparation of your non-resident return.
If I live and work in Texas as a truck driver, clock in and out in texas, but occasionally have to stay a couple nights at a time up in Oklahoma, do I have to pay Oklahoma taxes?
Hi Ricky,
This will depend on how your employer has recorded your work thus far. Your state tax withheld on your W-2 will indicate which state you will put your income was from. Ideally, you would have no state tax due being that you are a TX resident. However, your W-2 will be the deciding factor on this.