In general, wage income is taxed where you work, but your home state can tax all of your income from any source. So someone who lives in one state and works in another may have to file two state tax returns: one in their home state and a “nonresident” return in the state where they work.

Who must pay North Carolina income tax?

North Carolina Filing Requirements You must file a state return in North Carolina if you had income from North Carolina sources and your total federal gross income is $8,750 or more (for single taxpayers or married people filing singly), or $17,500 (for those filing married, joint returns).

Do you have to pay taxes in North Carolina and Virginia?

Imagine that this person lives along Virginia’s southern border with North Carolina and works out of an office in the Tar Heel State. North Carolina would tax them on the income they earn in the state (which, in this example, would be all of their salary income), and Virginia—as their domiciliary state—would tax them on all income from all sources.

Do you pay state income tax in Maryland?

The guidance explains that Maryland state income tax and state income tax withholding applies to employees domiciled in Maryland and non-resident employees receiving Maryland-source income, absent a reciprocal agreement Maryland has with residents of DC, Virginia, and West Virginia.

Can a person work in North Carolina and work in Virginia?

If, during the pandemic, she started working from her home in Virginia, she would stop accruing additional tax liability in North Carolina. Her office may be located there, but she is not working there. She is not earning any income from that location. She both lives and works in Virginia now, and thus only incurs tax liability in Virginia.

Can a state claim income from a remote employee?

But a remote employee’s work theoretically could be performed in the employer’s state, no matter how inconvenient or even impossible that might be for a given employee. These states claim that income even if the employee never sets foot in the state. [1]