Should Alabama withhold federal income tax on my RSA teachers income now that I live in Tennessee full time and pay federal tax on my Tennessee return?
Should Alabama withhold federal income tax on my RSA teachers income now that I live in Tennessee full time and pay federal tax on my Tennessee return?
Yes, you should probably still have Federal income tax withheld from your income. But, since there is not a state income tax in Tennessee, you would not need to have state taxes withheld.
When you are reporting retirement income, the state that is the source of the retirement is not a factor. Your resident state determines whether the retirement income is taxable. In your example, you would not need to have Alabama state taxes withheld because you are living in Tennessee.
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