Why do you have to file 2 state returns if you live in one state and work in another?

When you work in a state other than where you live you must file two tax returns. You must do so because your resident state taxes income from all sources. Therefore, you must file a resident return to pay tax on your total income and a nonresident return to pay tax on your out-of-state income.

It may sound as though you are being double-taxed, but you are not. You will get a credit for the tax paid to other states on your resident state return. However, you must prepare your nonresident state return first so that the credit will be calculated correctly. Please follow the directions in the TurboTax FAQ below to file your nonresident state return.

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