Some situations that may lead to a requirement to file a tax return in a nonresident state are:
You worked in a state that you are not a resident of. For example, Jane lives in New Jersey and commutes to work in New York. Jane would file a nonresident return in New York and a resident tax return in New Jersey.
Your employer withheld state taxes for the wrong state and you want a refund
You made non-employment income in a state other than your home state
Non-employment Income That is Taxable to Nonresidents
Most states tax any income that is sourced to their state, including the income of nonresidents. You don’t have to actually work in a state to owe taxes, these other types of income can also be taxable for a nonresident.
Your income as a partner in an LLC, partnership, S-corporation. Your share as a partner can be taxable in the state where the company is based. Note that this does not apply if you are simply an employee of a company.
Income from services performed within the state. For example, an appliance repair person travels across state lines to repair an oven in someone’s home.
Lottery or gambling winnings
Income from the sale of property within the state
Rental income
Carrying on a business, trade, profession, or occupation in a state. For example, working as a consultant or contractor in another state.
You May Not Need to File a Return in Reciprocal States
Certain states have agreements that allow residents of certain states to work in their state tax-free. These agreements are known as reciprocal agreements. If your resident state and the state you are working in have such an agreement you may not have to file a return in the nonresident state. Keep in mind that these agreements typically cover only earned income (income made from employment). Also, if you had taxes withheld for the nonresident state you would still need to file a return to get that money refunded. Also see:Which states have reciprocal agreements?
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