Filing Taxes in 4 States: Multi-State Tax Guide for Travel Nurses

Working in four states during a single year means filing up to five tax returns: federal plus each state. Here’s how to navigate multi-state filing without overpaying.

The Basic Framework

Who Gets to Tax You?

Resident state (tax home):

• Taxes all income worldwide
• But gives credit for taxes paid elsewhere

Non-resident states (assignment states):

• Tax only income earned in that state
• You file as non-resident

Example Setup

Tax home: Texas (no state income tax) Worked in: California, New York, Massachusetts

You file:

• Federal return
• CA non-resident return (CA income only)
• NY non-resident return (NY income only)
• MA non-resident return (MA income only)

State Tax Scenarios

Scenario 1: Tax Home in No-Tax State

Best case scenario. Your only state taxes are to assignment states.

No income tax states:

• Texas, Florida, Washington, Nevada, Wyoming
• Tennessee, South Dakota, Alaska, New Hampshire*

*NH taxes dividends/interest only

Scenario 2: Tax Home in Income-Tax State

Your tax home state taxes all income, but gives credits for taxes paid to assignment states.

Example:

• Tax home: Ohio (4% state tax)
• Worked in: California (10% effective)

Ohio taxes your CA income at 4%, but you’ve already paid 10% to CA. Ohio gives you a credit for up to 4% (the Ohio rate), so you effectively only pay 10% total to CA.

Scenario 3: Reciprocity States

Some states have agreements not to double-tax workers:

Example reciprocity pairs:

• DC/VA/MD
• PA/NJ/OH/WV
• IL/IA/KY/MI/WI

If your tax home and assignment states have reciprocity, you only pay to one.

Step-by-Step Filing

Step 1: Gather Documents

From each agency:

• W-2 showing state wages (should be allocated by state)
• Any 1099s
• State wage breakdown

Step 2: File Federal Return

Complete your federal return first. This establishes your AGI.

Step 3: File Non-Resident State Returns

For each assignment state:

• File non-resident return
• Report only wages earned in that state
• Pay tax owed

Step 4: File Resident State Return

For your tax home state:

• Report all income (including other state income)
• Calculate credit for taxes paid to other states
• Pay remaining tax owed

Avoiding Double Taxation

How Credits Work

The math:

• Total income: $100,000
• Tax home state rate: 5% = $5,000
• Assignment state rate: 8% = $8,000 (on assignment income of $30,000)

If you paid $8,000 to assignment state, your home state gives credit for the lesser of:

• Tax actually paid ($8,000)
• Home state tax on that income (5% × $30,000 = $1,500)

You get $1,500 credit, so you don’t double-pay on that $30,000.

Common Problems

Issue: Assignment state taxes weren’t withheld correctly Solution: You may owe assignment state at filing time

Issue: Home state doesn’t recognize assignment state taxes Solution: Research your specific state rules; some have limits

Issue: Wages allocated incorrectly between states Solution: Request corrected W-2 from agency

Special Situations

California Daily Rule

California is aggressive about taxation:

• They tax any income earned while physically in CA
• Including remote work done in CA
• Keep documentation of days worked

New York City

NYC has its own income tax on top of NY state:

• Only applies to residents
• Non-resident travelers shouldn’t pay it
• If withheld incorrectly, file for refund

Working from “Home”

If you do any work remotely (charting, CEUs) in your tax home state vs. assignment state, allocate those hours properly. This rarely matters practically, but technically applies.

Tax Software vs. CPA

When Software Works

• Working in 2-3 states
• Tax home in no-tax state
• Straightforward W-2 income
• Tech-comfortable

Options: TurboTax, H&R Block (multi-state versions)

When You Need a CPA

• 4+ states in one year
• Tax home status questions
• Amended returns needed
• Large balance due/refund
• Audit concerns

Travel nurse CPAs: TravelTax, HealthcareTravelersGuide

Estimated Costs

Tax Preparation

Filing Fees

Some states charge filing fees beyond the software cost.

Key Takeaways

• File non-resident returns for each assignment state
• Your tax home state gives credit for taxes paid elsewhere
• You generally don’t pay more than the highest rate
• Reciprocity agreements can simplify some situations
• Consider a travel nurse CPA for complex situations
• Keep documentation of which days worked where