Live in Arkansas, Work Remotely for a Texas Employer: Who Taxes You?
Answer
Arkansas gets all of it. Because Texas does not tax wage income, no Texas withholding exists and no Texas return is required — but Arkansas taxes residents on worldwide income, so every dollar earned in Texas still belongs on your Arkansas resident return.
Last verified
The instinct that working in a no-tax state means paying no tax is the single most expensive misunderstanding in this niche. Texas takes nothing, but Arkansas still taxes residents on income earned anywhere, so the full amount lands on your Arkansas return.
What you file
- 1Resident return · Arkansas
File a Arkansas resident return reporting all of your income.
The two states, side by side
| Arkansas | Texas | |
|---|---|---|
| Taxes wages | Yes — graduated | No |
| Reciprocity partners | None | None |
| Convenience rule | No | No |
| Nonresident return | Form AR1000NR | Not applicable |
| Credit for other-state tax | Form AR1000TC | No income tax |
| Nonresident safe harbour | None published | Not applicable |
| Local income tax | No | No |
| Revenue department | Arkansas Department of Finance and Administration | Texas Comptroller of Public Accounts |
| Last verified |
The other direction
Reversing the commute does not always reverse the answer. Living in Texas and working in Arkansas gives:No state income tax on your wages.
Same two states, different situation
The withholding answer turns on how you are paid and where the work happens, not only on which two states are involved.
- W-2 commuter: Arkansas → TexasHome state only
- 1099 contractor: Arkansas → TexasHome state only — estimated payments
- Moved mid-year: Arkansas → TexasOne part-year return — the state you left
Other Arkansas pairs
Questions people actually ask
I live in Arkansas and work remotely for a Texas employer. Which state do I pay?
Arkansas gets all of it. Because Texas does not tax wage income, no Texas withholding exists and no Texas return is required — but Arkansas taxes residents on worldwide income, so every dollar earned in Texas still belongs on your Arkansas resident return.
Which state should my employer be withholding for?
Arkansas. Your employer should withhold Arkansas tax rather than Texas tax on these wages. If a Texas line is showing on your pay stub, raise it with payroll now rather than at filing time.
How current is this?
The Arkansas and Texas rules on this page were last checked against Arkansas Department of Finance and Administration and Texas Comptroller of Public Accounts on 2026-08-07. We re-check the full grid every December after state legislative sessions close, and re-check the convenience-of-the-employer states quarterly because that is where the rules move fastest.
Sources
Every fact above comes from the revenue department that publishes the rule. We do not cite secondary summaries, and we do not restate a figure we could not find at source.
- Arkansas Department of Finance and Administration — individual income taxaccessed 2026-08-07
- Texas Comptroller of Public Accounts — individual income taxaccessed 2026-08-07