I live in Tennessee but I work in Alabama. I am confused as to whether I am supposed to file taxes with TN since I haven't earned any income there.

Tennessee does have a income tax on interest and dividends so Tennessee only collects tax on interest from bonds and dividends from stock.

The state of Tennessee, taxes only dividend and interest income. If you do not have this type of income you are not required to file a state return.

Tennessee does not have a state income tax on wages so Tennessee does not tax their residents' income.

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My office is in AL but I telework in TN at my home 80% of the time. Am I only subject to 20% of my income be taxes in AL? My employer withholds taxes based on my office so I am paying all of my taxes on income in AL.

@John190  File a Non-Resident State Tax Return to Alabama.

Click this link for info on How to File a Non-Resident State Return.