Live in Arkansas, Work Remotely for a Vermont Employer: Who Taxes You?
Answer
Only Arkansas taxes you. Vermont levies no personal income tax on wages, so nothing is withheld there and you file no Vermont return. Arkansas taxes its residents on all income wherever earned, which means your Vermont earnings go on a Arkansas resident return in full.
Last verified
The instinct that working in a no-tax state means paying no tax is the single most expensive misunderstanding in this niche. Vermont 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 | Vermont | |
|---|---|---|
| Taxes wages | Yes — graduated | Yes — graduated |
| Reciprocity partners | None | None |
| Convenience rule | No | No |
| Nonresident return | Form AR1000NR | Form IN-111 with Schedule IN-113 |
| Credit for other-state tax | Form AR1000TC | Schedule IN-117 |
| Nonresident safe harbour | None published | None published |
| Local income tax | No | No |
| Revenue department | Arkansas Department of Finance and Administration | Vermont Department of Taxes |
| Last verified |
The other direction
Reversing the commute does not always reverse the answer. Living in Vermont and working in Arkansas gives:Home state only.
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 → VermontBoth states — credit offsets the double tax
- 1099 contractor: Arkansas → VermontHome state, plus the client state if you work there
- Moved mid-year: Arkansas → VermontTwo part-year returns
Other Arkansas pairs
Questions people actually ask
I live in Arkansas and work remotely for a Vermont employer. Which state do I pay?
Only Arkansas taxes you. Vermont levies no personal income tax on wages, so nothing is withheld there and you file no Vermont return. Arkansas taxes its residents on all income wherever earned, which means your Vermont earnings go on a Arkansas resident return in full.
Which state should my employer be withholding for?
Arkansas. Your employer should withhold Arkansas tax rather than Vermont tax on these wages. If a Vermont line is showing on your pay stub, raise it with payroll now rather than at filing time.
Does my Vermont employer's location alone create a Vermont tax obligation?
No. Vermont sources wages to the place where the work is physically performed, and it does not apply a convenience-of-the-employer rule that would override that. Days you actually spend working inside Vermont are a different matter — those are Vermont-source income and can require a nonresident return.
How current is this?
The Arkansas and Vermont rules on this page were last checked against Arkansas Department of Finance and Administration and Vermont Department of Taxes 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
- Vermont Department of Taxes — individual income taxaccessed 2026-08-07