My collage student daughter is a North Carolina resident studying in Tennessee. She worked part time during 2006 both in NC and TN. TN don't have state income tax so no state taxes were withheld or charged by TN. The standard NC state tax form includes her TN income as a taxable income in NC. Is that right? If not where is the place to deduct that TN income? Thanks,
Eylon Shalev
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"Eylon Shalev" wrote
Every state taxes all of the income of their resident citizens. So TN income is taxed by NC because that is her home state.
-- Paul A. Thomas, CPA Athens, Georgia
Your state, like others, tax all income of it's residents, and that includes your daughter. Only IF TN had an income tax, and daughter filed a return, could she get credit for another state's tax on the NC return. Every so often I have a client who worked down in Florida for maybe six months and has to pay tax on that and all other to Alabama. And I do mean he pays. ChEAr$, Harlan Lunsford, EA n LA
Your daughter pays income taxes to her state of residence on all income recieved during the year. Most states with an income tax (including North Carolina) give a credit for state income taxes paid on the same income to other states to avoid double taxation.. Since Tennessee has no individual income tax there is no double taxation and no additional deduction on her NC return.
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