It's going to depend on the states involved. It's entirely possible you'll have to file a return in both states, even if you only end up paying one. You have a couple of ways to find out what you have to do. If you want to do it yourself, you'll need to call the tax department of BOTH states and ask them. Have paper and pencil ready to take down their instructions. If you're not intimidated by tax forms and have the time, you can get the same information by getting the non-resident form and instructions for the state you work in, and the resident form and instructions for the state you live in, and read them carefully. Both should tell you exactly what you need to do for each state. There are a couple of things to be aware of: The state where you live will have specific standards you have to meet to be considered a full-year resident. Likewise, the state you work in may not recognize your non-resident status for various reasons. Again, the instructions with the respective tax forms should tell you what you need to know. And you'll want to look at your W-2 and find out what state your employer has been withholding for, so you know where the money went. The alternative is to consult a licensed tax preparer, which is probably going to be the easiest and safest way to deal with it.

John lives in Illinois but his job requires him to frequently travel the country working for various clients. For the Tax Year 2004, he has worked in Pennsylvania,Texas, Michigan, and Florida. He would file a "resident" state tax return for his home state of Illinois and a "non-resident" state tax return for Pennsylvania and Michigan. He would not have to file for Texas or Florida because they don't have state taxes on personal income. This is only a GENERAL rule....the best bet is to find a good CPA and let them sort it out. Use this directory to search for one nearest you..... http://www.cpadirectory.com

YOU FILE FOR THE STATE YOU WORK IN. IF YOU WORK IN BOTH STATES, THEN ONE TIME FOR BOTH STATES.