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State Taxes if you live in another state

Topic closed. 2 replies. Last post 8 years ago by KY Floyd.

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United States
Member #15989
May 24, 2005
183 Posts
Posted: September 25, 2008, 7:12 am - IP Logged

Does anyone know if you live in GA and were to win the powerball in TN or SC, do you pay the state tax of the state you played in or the state you live in......or do you have to pay both? Reason I ask, I travel for work to both states, live in GA, and can buy tickets in either place. SC has a 7% state tax, while TN has none? Cash value at this point would be 75M in TN, and 68 M in SC, a significant difference. Also, if you were to win in TN, could you personally move your residence to TN before claiming, get a new drivers license, wait a month, then claim as a TN resident to save 7 Million? I know it is far fetched, but just wondered if any tax accounting types on here might know. Thanks!

    Stew12's avatar - bad egg-64x64.png
    United States
    Member #61398
    May 21, 2008
    781 Posts
    Posted: September 25, 2008, 9:19 am - IP Logged

    I'm not 100% sure, but if it works like income tax you might pay taxes in the state where you claim the ticket, and then come tax time you would be getting most (if not all) back from that state, but you would owe your home state.  That's how it works for me (I live in one state and work in another)..

      United States
      Member #23835
      October 16, 2005
      3502 Posts
      Posted: September 25, 2008, 11:02 am - IP Logged

      Each state has their own laws,but here's how it generally works. Any state in which you earn income has the authority to assess income tax on those earnings, assuming the state has an income tax. If the income came from them, then they're the ones who get the income tax. Being a non-resident will be somewhat different than if you were a resident of that state, but you'll still owe them income tax.

      Your state of residence also has the authority to assess income tax on all of your income regardless of where it is earned, unless that income is specifically exempt. The good news is that you will generally get a credit for any income tax paid to another state.  As an example, suppose you won a million dollars, your taxable income for that year was  $1,047,000, and your state's tax on that is $57,000. The state where you won has a lower income tax, and you pay them $48,000. Your state will credit you for the $48,000 paid to the other state, and you'll only pay the remaining $9000. so it's possible that your state  will do things differently

      You can run, but you can't hide. A state is entitled to income tax on income earned while you're a resident.  Waiting a month to cash your paycheck doesn't change when you earned it, and neither does waiting to cash in a lottery ticket.