You Might Owe Taxes in a State You Don’t Live In

Should you have to file a tax return in a state where you babysat for one hour? In 22 states, the answer is technically yes. In this episode of The Deduction, host Kyle Hulehan and co-host Erica York sit down with Katherine Loughead, Director of State Tax Projects at the Tax Foundation, to break down the tangled mess of state nonresident income tax laws — and why they're a growing problem in the remote work era. Katherine walks us through how credits for taxes paid to other states are supposed to prevent double taxation, why "convenience rules" in 8 states can saddle remote workers with two full tax bills, how a wild patchwork of filing thresholds creates confusion for workers and employers alike, and what reforms states should adopt to simplify the system. 📄 READ THE FULL PAPER: "Nonresident Income Tax Filing and Withholding Laws by State, 2026" 📄 RELATED: "State Individual Income Taxes on Nonresidents: Remote Work & Hybrid Work" 📄 "How Burdensome Are Your State's Nonresident Income Tax Filing Laws?" (Interactive Map) 📄 Mobile Workforce State Income Tax Simplification Act ——— HOSTS & GUEST: Kyle Hulehan — Host, Senior Marketing Associate & Creative Producer Tax Foundation: Erica York — Co-Host, Vice President of Federal Tax Policy Tax Foundation: Twitter/X: LinkedIn: Substack: Katherine Loughead — Guest, Director of State Tax Projects Tax Foundation: Twitter/X: LinkedIn: ——— FOLLOW THE DEDUCTION: Twitter/X: FOLLOW TAX FOUNDATION: Website: Twitter/X: 📬 Have a question? Email us at podcast@taxfoundation.org or DM @DeductionPod on Twitter. Support the show

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You Might Owe Taxes in a State You Don’t Live In is an episode from The Deduction by Tax Foundation.

This episode is 41:06 long.

This episode was published on Apr 8, 2026.

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