The Deduction You Might Owe Taxes in a State You Don’t Live In
Should you have to file a tax return in a state where you babysat for one hour? In 22 states, the answer is technically yes.
In this episode of The Deduction, host Kyle Hulehan and co-host Erica York sit down with Katherine Loughead, Director of State Tax Projects at the Tax Foundation, to break down the tangled mess of state nonresident income tax laws — and why they're a growing problem in the remote work era.
Katherine walks us through how credits for taxes paid to other states are supposed to prevent double taxation, why "convenience rules" in 8 states can saddle remote workers with two full tax bills, how a wild patchwork of filing thresholds creates confusion for workers and employers alike, and what reforms states should adopt to simplify the system.
📄 READ THE FULL PAPER:
"Nonresident Income Tax Filing and Withholding Laws by State, 2026"
https://taxfoundation.org/data/all/state/nonresident-income-tax-filing/
📄 RELATED: "State Individual Income Taxes on Nonresidents: Remote Work & Hybrid Work"
https://taxfoundation.org/research/all/state/state-income-taxes-nonresidents/
📄 "How Burdensome Are Your State's Nonresident Income Tax Filing Laws?" (Interactive Map)
https://taxfoundation.org/data/all/state/nonresident-income-tax-filing-laws/
📄 Mobile Workforce State Income Tax Simplification Act
https://taxfoundation.org/blog/complicated-state-taxes-business-travelers/
———
HOSTS & GUEST:
Kyle Hulehan — Host, Senior Marketing Associate & Creative Producer
Tax Foundation: https://taxfoundation.org/about-us/staff/kyle-hulehan
Erica York — Co-Host, Vice President of Federal Tax Policy
Tax Foundation: https://taxfoundation.org/about-us/staff/erica-york
Twitter/X: https://twitter.com/ericadyork
LinkedIn: https://linkedin.com/in/erica-york-a68ab474
Substack: https://ericadyork.substack.com
Katherine Loughead — Guest, Director of State Tax Projects
Tax Foundation: https://taxfoundation.org/about-us/staff/katherine-loughead
Twitter/X: https://twitter.com/KELoughead
LinkedIn: https://linkedin.com/in/katherine-e-loughead-6020a568
———
FOLLOW THE DEDUCTION:
Twitter/X: https://twitter.com/deductionpod
FOLLOW TAX FOUNDATION:
Website: https://taxfoundation.org
Twitter/X: https://twitter.com/TaxFoundation
📬 Have a question? Email us at podcast@taxfoundation.org or DM @DeductionPod on Twitter.
#taxes #remotework #statetaxes #taxfiling #incometax #taxreform #taxfoundation #deduction #podcast #workfromhome
Follow us!
https://twitter.com/TaxFoundation
https://twitter.com/deductionpod
Support the show