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Live in Arkansas, Work Remotely for a Vermont Employer: Who Taxes You?

Home state onlyArkansas withholds

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

  1. 1Resident return · Arkansas

    File a Arkansas resident return reporting all of your income.

The two states, side by side

 ArkansasVermont
Taxes wagesYes — graduatedYes — graduated
Reciprocity partnersNoneNone
Convenience ruleNoNo
Nonresident returnForm AR1000NRForm IN-111 with Schedule IN-113
Credit for other-state taxForm AR1000TCSchedule IN-117
Nonresident safe harbourNone publishedNone published
Local income taxNoNo
Revenue departmentArkansas Department of Finance and AdministrationVermont 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.

Vermont to Arkansas →

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.

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.