Live in Tennessee, Work Remotely for a Montana Employer: Who Taxes You?
Answer
Nothing is owed on either side. Tennessee has no wage income tax, and Montana taxes nonresidents only on work actually performed inside Montana. Never setting foot in Montana keeps the income entirely outside its reach, so this pair produces no state return at all.
Last verified
Wages are sourced to the place where the work is physically performed. That default is what makes remote work simple, and it is only disturbed when the employer's state runs a convenience-of-the-employer rule. Montana does not.
What you file
There is nothing to file in either Tennessee or Montana on these wages. Your federal return is unaffected — the federal government taxes the income whatever the states do.
The two states, side by side
| Tennessee | Montana | |
|---|---|---|
| Taxes wages | No | Yes — graduated |
| Reciprocity partners | None | 1 (Form MW-4) |
| Convenience rule | No | No |
| Nonresident return | Not applicable | Form 2 with the nonresident/part-year schedule |
| Credit for other-state tax | No income tax | Form 2 (credit for income tax paid to another state) |
| Nonresident safe harbour | Not applicable | None published |
| Local income tax | No | No |
| Revenue department | Tennessee Department of Revenue | Montana Department of Revenue |
| Last verified |
The other direction
Reversing the commute does not always reverse the answer. Living in Montana and working in Tennessee 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: Tennessee → MontanaWork state only
- 1099 contractor: Tennessee → MontanaClient state only, if you work there
- Moved mid-year: Tennessee → MontanaOne part-year return — the state you moved to
Other Tennessee pairs
Questions people actually ask
I live in Tennessee and work remotely for a Montana employer. Which state do I pay?
Nothing is owed on either side. Tennessee has no wage income tax, and Montana taxes nonresidents only on work actually performed inside Montana. Never setting foot in Montana keeps the income entirely outside its reach, so this pair produces no state return at all.
Which state should my employer be withholding for?
Neither. There is no state income tax to withhold on either side of this pairing, so a state line on your pay stub for Tennessee or Montana is an error worth querying.
Does my Montana employer's location alone create a Montana tax obligation?
No. Montana 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 Montana are a different matter — those are Montana-source income and can require a nonresident return.
How current is this?
The Tennessee and Montana rules on this page were last checked against Tennessee Department of Revenue and Montana Department of Revenue 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.
- Tennessee Department of Revenue — individual income taxaccessed 2026-08-07
- Montana Department of Revenue — individual income taxaccessed 2026-08-07