Live in Virginia, Work Remotely for a Nebraska Employer: Who Taxes You?
Answer
Nebraska taxes you even though you never work there. Its convenience-of-the-employer rule sources your remote workdays back to the employer's state unless the job genuinely cannot be done in Nebraska. You file a Nebraska nonresident return and a Virginia resident return, claiming the credit at home.
Last verified
A handful of states refuse to accept the ordinary sourcing rule for their own employers' remote staff. Nebraska is one of them, and its convenience-of-the-employer rule is the reason this page does not end with "only your home state taxes you".
Nebraska sources the wages of a nonresident employee of a Nebraska employer to Nebraska unless the work is performed outside the state because the employer requires it. Working remotely by the employee's own choice does not break the Nebraska claim.
The rule is not an administrative preference. Nebraska applies it under Neb. Admin. Code tit. 316, ch. 22, §003, and the burden of showing that remote work is an employer necessity rather than an employee convenience falls on you and your employer, not on Nebraska Department of Revenue.
A Virginia resident taxed by another state on the same income claims the credit for taxes paid to other states on Schedule OSC. The credit is capped at the Virginia tax on that income, so it removes the double tax but never refunds the excess when the other state charges more.
What you file
- 1Nonresident return · NebraskaForm 1040N with Schedule III
File the Nebraska nonresident return FIRST — you need the Nebraska tax figure before you can complete Virginia.
- 2Resident return · VirginiaSchedule OSC
File a Virginia resident return reporting all income, then claim the credit for tax paid to Nebraska. The credit is capped at what Virginia would have charged on that same income, so if Nebraska taxes it at a higher rate the difference is not refunded.
The two states, side by side
| Virginia | Nebraska | |
|---|---|---|
| Taxes wages | Yes — graduated | Yes — graduated |
| Reciprocity partners | 5 (Form VA-4) | None |
| Convenience rule | No | Yes — general rule |
| Nonresident return | Form 763 | Form 1040N with Schedule III |
| Credit for other-state tax | Schedule OSC | Form 1040N Schedule II |
| Nonresident safe harbour | None published | None published |
| Local income tax | No | No |
| Revenue department | Virginia Department of Taxation | Nebraska Department of Revenue |
| Last verified |
The other direction
Reversing the commute does not always reverse the answer. Living in Nebraska and working in Virginia 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: Virginia → NebraskaBoth states — credit offsets the double tax
- 1099 contractor: Virginia → NebraskaHome state, plus the client state if you work there
- Moved mid-year: Virginia → NebraskaTwo part-year returns
Other Virginia pairs
Questions people actually ask
I live in Virginia and work remotely for a Nebraska employer. Which state do I pay?
Nebraska taxes you even though you never work there. Its convenience-of-the-employer rule sources your remote workdays back to the employer's state unless the job genuinely cannot be done in Nebraska. You file a Nebraska nonresident return and a Virginia resident return, claiming the credit at home.
Which state should my employer be withholding for?
Both, potentially — and that is the problem. Nebraska expects withholding because it claims the income, while Virginia taxes you as a resident. Many employers withhold only for Nebraska, which leaves a Virginia balance due at filing unless you make estimated payments during the year.
Will I end up paying tax twice on the same income?
Not twice over, but you will pay the higher of the two rates. Virginia gives residents a credit for tax paid to Nebraska on the same income, claimed on Schedule OSC. The credit is capped at the Virginia tax on that income, so if Nebraska taxes it more heavily the excess is not refunded by either state.
How current is this?
The Virginia and Nebraska rules on this page were last checked against Virginia Department of Taxation and Nebraska 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.
- Virginia Department of Taxation — individual income taxaccessed 2026-08-07
- Virginia — Form VA-4accessed 2026-08-07
- Virginia Tax — Reciprocityaccessed 2026-08-07
- Nebraska Department of Revenue — individual income taxaccessed 2026-08-07