I have a New Mexico driver’s license, but all my work has been in Arizona. Should I be paying taxes in both states? Can someone explain why or why not?
Also, my last paycheck was for work done only in Colorado, yet they still took out taxes for New Mexico and Arizona, but not for Colorado. I’m going to speak to a tax pro soon, but this just doesn’t seem right to me.
Where are you actually living? And what’s your domicile?
LINCO said:
Where are you actually living? And what’s your domicile?
I have a New Mexico ID, but I live in an RV in Arizona for work. I get a non-taxable per diem for staying there, but it’s not part of my pay.
@Xavi
How long have you been living in the RV? Is it temporary until you settle somewhere or is your mom’s address just your official one for now?
Keegan said:
@Xavi
How long have you been living in the RV? Is it temporary until you settle somewhere or is your mom’s address just your official one for now?
The RV is my permanent home, wherever it’s parked. I’ve lived in 18 states over the past 8 years. Changing my ID every time I move doesn’t make sense, and it’s nearly impossible to get a new ID when your address is an RV. Arizona isn’t my final stop, so I’ve stuck with my New Mexico ID. I’m saving up to buy a house someday, but I don’t know where yet.
@Xavi
Tax agencies care about where your domicile is. An RV doesn’t count unless you’ve gone through specific steps to make it your legal domicile, and it can’t be constantly moving. If your mom’s address is tied to your ID, voter registration, and vehicle registration, then that’s where they consider you a resident. You’d owe taxes there and in the states where you work. Your resident state might give you a tax credit for what you pay in other states, but filing taxes in multiple states can get tricky. You should definitely hire a professional to handle this.
@Xavi
As others mentioned, RVs don’t usually count as a domicile. Courts look at several factors, like voter registration, where your mail goes, and other ties. For lifetime RVers, there are services that set up a legal domicile for you and forward your mail. Using a family member’s home address might be easier. Either way, you need to declare a state as your domicile, but you’ll still owe taxes in states where you work.
LINCO said:
@Xavi
Do you have any other ties to New Mexico?
No, I don’t own property or have vehicles registered there. Just my ID, which has my mom’s address.
LINCO said:
@Xavi
Do you have any other ties to New Mexico?
No, I don’t own property or have vehicles registered there. Just my ID, which has my mom’s address.
Why haven’t you updated your driver’s license then?
Your ID doesn’t determine your domicile—it’s where you actually live. If you’re in Arizona, you should get an Arizona ID to prove your domicile there. But keep in mind, doing that could affect your per diem, which might be worth more than the taxes you’re paying to New Mexico. So it’s up to you:
Your per diem might outweigh the taxes anyway.
@Laine
My per diem is separate from my paycheck. I won’t lose it because it’s based on me living 49 miles or more from my work location. It’s a completely untaxed check and doesn’t affect my regular pay.
What address did you put on your W-4? Payroll usually withholds taxes for the state where you work, not where you live, but your payroll department might have messed up. If you’re not actively living in New Mexico or working there, they shouldn’t be taking out taxes for that state. It should all be Arizona since that’s where you’re working.
You’re at least paying twice 
I’m not familiar with New Mexico or Arizona laws, but most states offer a tax credit so you don’t get hit twice. In states like NY or NJ, commuters get a credit for taxes paid in the state where they work. For Arizona, look into Form 309—you’ll probably need it.
Taxes should only come out for the state where you work. Your living situation shouldn’t matter.
