State Taxation & Tax Treaties

States are independent in their taxing authority, and all state tax forms differ in some respects. States are not bound to honor federal tax treaties, but most do. These are the ones that DON’T:

1) Alabama

2) Arkansas

3) California

4) Connecticut

5) Hawaii

6) Kansas

7) Kentucky

8) Maryland

9) Mississippi

10) Montana

11) New Jersey

12) North Dakota, and

13) Pennsylvania

Keep in mind that If you live or work in one of these states, you MAY owe state income tax even though your income is exempt from federal income tax by a treaty. In addition, If you worked in more than one state, you will probably have to file two state return (assuming both states have income tax)