Which tax should I pay

[exploited]

Hello,

My employer is based in IL and I have a contract in CA. He is currently witholding IL state tax on my paychecks. Can someone tell me which state tax should I be paying?

Also, what benefits would an employer get by setting up a retirement plan for an employee?

Thanks

 

[sdrblr]

you should pay the tax in the state you work

 

[priyajohar]

2 cents

2 cents and thus confirm it from some other source.

There are some rules like if you are travelling to another state (in your case CA) and rent/own apartment in ( IL) than you have to file state tax of (IL).
Most of times one has to file state tax in which she/he works.

 

[PhillyKP]

There's no single correct answer, because it all depends on individual state laws. You are usually liable for state taxes in both locations. Depending on declared tax-reciprocity between states, you might be able to offset the liability for your residence state by showing the tax receipts for the work state. However, states usually set up reciprocity with neighbouring states only.

If your employer is using any kind of payroll software, it should be smart enough to take in to account all these types of conditions(your individual circumstances, exemptions, laws, etc), since tax laws in the US require recording of both residence and work tax locations. If not, be advised that you are probably liable for taxes both places. *Key word is probably*. Please confirm your situation with a qualified tax professional.

 

[subash1977]

I had the same Issue, Employer In NJ, I was in state XX.
Empoyer was deducting NJ tax. I had to file NJ non resident tax & state tax for XX I could claim tax crediit for the net amount in the state reuturn for XX.

In effect I felt I paid more tax.