You work in one state but live in another. Who gets your income tax?

The number one question from everyone who has gone out of state for a job site or a contract.

Two states have a claim on you. The state where you live taxes all of your income, wherever it was earned. The state where you physically worked taxes what you earned there. You don't pay twice: your home state gives you a credit for the tax paid to the other state.

But if the other state is Tennessee, Texas or Florida, which have no income tax, there is nothing to credit. Your home state taxes the income in full. Working in a no-tax state doesn't reduce your home-state tax by a single dollar.

And no, six months on a job site doesn't make you a resident of that state. Residency is where your home is, not where you sleep.

What to check today: which state is listed in the withholding box of your W-2. If no state tax is withheld at all, the whole amount will arrive as a bill in April.