In today's world, it is not uncommon for a person to live in one state and work in another. In these situations, it is important to understand that income taxes may be due to both the state of residence and the state where the income was earned. A non-resident income tax return may also need to be filed. Failing to abide by these obligations can result in a tax problem with the Oklahoma Tax Commission.

Three Types of Income Tax Problems Faced By Non-Residents of Oklahoma

Below is an overview of some of the common income tax problems faced by non-residents:

1. Thinking that just because you are not a resident of Oklahoma, you are not obligated to file and pay an Oklahoma state income tax return. In reality, if you earned more than $1,000 for the year in this state, you are required to file a non-resident income tax return even though you do not live in Oklahoma.
2. Failing to understand what Oklahoma considers to be taxable income. The answer to this question is not always straightforward. For example, earnings from a rental property, or winnings from gambling, are countable as taxable income. Selling property in Oklahoma is also taxable even if you are not a resident of the state. It is important to consult with an experienced tax professional for guidance.
3. Failing to report and pay taxes on income related to your business. For example, distributions made from a limited liability company (LLC) doing business in Oklahoma are taxable income. Similarly, income for partnerships and Subchapter S corporations from business conducted in Oklahoma is also taxable. This includes income earned from shares, gains, losses or deductions.

If you are a non-resident who earned an income in Oklahoma, you may need the guidance of an attorney well versed in the tax laws of this state. We are here to help. We encourage you to reach out by contacting us directly to begin to learn the answers to the questions that you have.