Now, we're gonna be talking about today something working in multiple states. You know, we have a lot of CRNAs that do go to different states and travel for work. And you need to understand the ramifications of that. A lot of times I find CRNAs are told one thing, possibly by a recruiter, and didn't fully understand that. So that's really what the session is about. Again, this is an extremely complicated area. I'm just gonna put that out there. So Sharon, you might be asleep by the end of this. But I'm not gonna get really in detail again. It's just stuff that you need to know the basics on. And if you work in multiple states, there are certain things that you need to be doing and tracking and so forth. So that's really what we're gonna cover today. One, you need to understand a little bit of the basics. So you got what we call resident taxation, and that is you live and work in a state, you know, you pay all your income taxes in that state. If they have income taxes, you know, there are states that don't have it. And you receive a credit for taxes if you've paid to other states, okay? In a lot of cases. And then you've got part of your residence, okay? And that can be you're there for work, you're staying for a certain amount of time. You know, there's a lot of people that come from New York to Florida and stay down there two or three months, and then they come back or stay six months and come back and so forth. But every state has rules regarding that as well. Some of that involves separating your income to where you're allocating tax based on how much money was earned in that state versus earned in the other state. And again, this can get really, really complicated. There are some states that are extremely aggressive in going after these taxes and other states that aren't quite as aggressive. But either way, you wanna make sure that you're doing it right and you understand at least the basic terminology of what you should and should not be doing. A big word that you'll hear anytime you talk about this is apportionment. And that's what happens in a lot of cases for multi-state income. They apportion your income based upon where you earn that income. So Sharon, let's say you live in North Carolina and you go to Minnesota to work for a month. You wanna go up and see the girls. Grant gets you a gig up there somewhere and you go up there and work. But let's say that month that you're up there, you make $20,000 working. You made that money in Minnesota, right? But you live in North Carolina. Where do you pay the taxes? I would suspect Minnesota. So what would happen is you would apportion that $20,000 of income to Minnesota. You would then tell North Carolina that you paid taxes on that 20,000 in Minnesota and you would receive a credit in most instances for the amount of tax that you paid in Minnesota. This is the basics of how it works. You basically have an apportionment schedule. You allocate your income and your deductions. And then you get this apportionment percentage. And if you think this is complicated, it is very complicated. It is a complicated thing to do. And many, many, many, many, many people get it wrong. But the states, like I said, that really go after this, you do not want to cross some of these state governments and not pay your taxes. For example, New York. I wasn't gonna mention any names, but yes, New York has a way of going after people for taxes that should have been paid in their state. Sometimes even after you move from the state of New York. So I've got a buddy who was telling me about the scenario that he went through the other day with New York. But yes, there are states that are more aggressive than others, so for sure. Now, what about states who have no state income tax, i.e., Florida? It would seem beneficial to go and work in Florida, in my mind. Yeah, I mean, it could be, because there's no tax. Now, let me give you another scenario, which I've used this before, whereas you live in Florida, but you go to New York to work. In that scenario, I had a recruiter who was telling all these Florida CRNAs to go to New York, because they were gonna make X amount of money per hour. What he didn't allude to them was that, one, New York has a pretty high tax rate. They were in the city, so you got city taxes, and you've got other taxes that go along with that. So by the time you factored all that in, they were basically making less money than if they stayed in the state of Florida and worked. Did they not waive any of that during COVID? No. Okay, just asking. It would have seemed to have been in their best interest to do so. So one, as a non-resident, you need to make sure that you understand that apportionment of income, and you need to determine whether you owe state taxes. There is a potential in this for you to be double-taxed. If you get a credit in your state for what you've paid, that can kind of offset. If you don't, then you could pay tax in that state and your state. My question is this. If you get a credit, then that should decrease your taxable income in your home state. What you're saying is they may not acknowledge that you pay taxes in the other state. It makes no sense to me. It's state by state. You need to understand the rules. You might not get a full credit for higher taxed states. So let's say that you're in North Carolina and our state tax rate is lower than New York, and you go to New York and work. North Carolina might not give you the credit. You made $20,000, back to my example. Your effective tax rate for New York was 12%, let's say, whereas North Carolina is 5%. They might not give you the credit for the 12. They might only give you credit for five. Again, it's complicated, but you need to understand that you should be doing this. Some states have reciprocity agreements, meaning that they view money made in the other state just like they view it in your state. So you don't have to do these multi-state returns here. So, and this just kind of shows you which states have agreements with which states. So for some reason, Montana and Iowa have an agreement together. North Dakota and Minnesota have an agreement. Wisconsin and Illinois, Indiana, Ohio, West Virginia, and Virginia all have reciprocal agreements. Michigan and Pennsylvania. So certain states have reciprocity agreements with other states and so forth. And you got to kind of look into that and see if that state has a reciprocity agreement. And if it does, then you don't have to pay tax in that state. It's just like you made money in your home state. So gray, which is the majority of the country, means that you have to do this business of paying taxes in the other state. Right, they do not have reciprocity agreements in those particular states. What is interesting is, back to what you said before, I have never heard a recruiter allude to any of this. No. Never. Never. They're probably not going to talk about this, but you can kind of see what a big difference it could make in that scenario. So, you know, Florida, Texas, Tennessee, they don't have a state income tax. You don't have to worry about it there, but other states, it could be a big deal. If you're an S-corporation owner, and your S-corporation works in another state, because remember, you work for your S-corporation. You get paid from your S-corporation. Your S-corporation contracts with a facility in Minnesota. They pay that. Then that corporation and that shareholder, they have to pay taxes in the state in which that money was earned. If you have a partnership, you know, then you go across state lines. You have to do it in the other state. If you work in a state without reciprocity, as we just talked about, then you have to do multiple state returns. So not only could you end up paying more taxes, you're also going to end up paying more accounting fees, because now you've got to do a tax return, not only in North Carolina here, but in Minnesota. And if you've got to do apportionment and do all that, I guarantee your accountant's going to charge you more to do that. So in every state that you work in, if you work in five different states that have no reciprocity, and they all have state income tax, you have to do apportionment, and you have to do a return in each one of those states for the money that you earn in that state. So you can see how this could get really, really complicated really quickly. Again, the credits, most states allow for a credit paid to the other state. There are some limitations in the fact that if you go to a higher tax state, your state just might not give you all the amount that you paid to the other state. And remember what a credit is. It's not a deduction, a credit is dollar for dollar. So if you paid South Carolina $5,000 in taxes, then you get a credit back to North Carolina for $5,000 in taxes, which offsets. So it's actually a dollar for dollar. If you're working in your state of residence, you pay tax on all the income there. If you're in a non-resident state, you pay on in-state earnings, and then apportionment is a percentage of the total income is apportioned to certain states. So one, you need to make sure that you are taking advantage of all the deductions you can for your resident state. Your non-resident state, you might not have those deductions, and it could result in higher income taxes in a non-resident state, because you don't have the deduction. Something to know and pay attention to. If you're gonna work in multiple states, make sure you're working with someone that can help you work through these scenarios, so you know, or have a general idea of what your tax situation is gonna be. Would it be better for me to work at home? Would it be better to maybe work somewhere else? What am I working for? Am I working for travel? Am I working for adventure? You know, I just wanna get away. There's all kinds of reasonings that go into this for doing what you do, but understand that upfront. Don't let it nip you in the butt on the way out. You know, one, what you gotta do is identify all your income sources. You've gotta complete your apportionment schedules, and then you file your returns in each state based upon that percentage of apportionment or income made in those states. I guess to circle around without getting, again, too in detail on all this, is to say, this is a complicated area. If you're gonna do it, make sure that you get some help with this, again, CRNAs are smart. If you wanna take the time and learn the rules and go through this, you absolutely, positively can, but make sure you understand it if you're working in multiple states.

certified registered nurse anesthetist

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tax implications

resident taxation

reciprocity agreements