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Live in Massachusetts, Work in Arkansas: Which State Taxes Your Paycheck?

Both states — credit offsets the double taxArkansas withholds

Answer

Both states tax the same wages, and a credit undoes the overlap. Arkansas withholds as your work state and you file a Arkansas nonresident return; Massachusetts taxes residents on all income, so you also file at home and claim the credit for tax paid to Arkansas. File Arkansas first.

Last verified

Without an agreement between Massachusetts and Arkansas, the overlap is handled after the fact rather than prevented. That is why the filing order matters: the Arkansas figure is an input to the Massachusetts return, so completing Massachusetts first means doing it twice.

A Massachusetts resident taxed by another state on the same income claims the credit for taxes paid to other states on Schedule OJC. The credit is capped at the Massachusetts tax on that income, so it removes the double tax but never refunds the excess when the other state charges more.

What you file

  1. 1Nonresident return · ArkansasForm AR1000NR

    File the Arkansas nonresident return FIRST — you need the Arkansas tax figure before you can complete Massachusetts.

  2. 2Resident return · MassachusettsSchedule OJC

    File a Massachusetts resident return reporting all income, then claim the credit for tax paid to Arkansas. The credit is capped at what Massachusetts would have charged on that same income, so if Arkansas taxes it at a higher rate the difference is not refunded.

The two states, side by side

 MassachusettsArkansas
Taxes wagesYes — flatYes — graduated
Reciprocity partnersNoneNone
Convenience ruleNoNo
Nonresident returnForm 1-NR/PYForm AR1000NR
Credit for other-state taxSchedule OJCForm AR1000TC
Nonresident safe harbourNone publishedNone published
Local income taxNoNo
Revenue departmentMassachusetts Department of RevenueArkansas Department of Finance and Administration
Last verified

The other direction

Reversing the commute does not always reverse the answer. Living in Arkansas and working in Massachusetts gives:Both states — credit offsets the double tax.

Arkansas to Massachusetts →

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 Massachusetts pairs

Questions people actually ask

I live in Massachusetts and work in Arkansas. Which state takes the tax out of my paycheck?

Both states tax the same wages, and a credit undoes the overlap. Arkansas withholds as your work state and you file a Arkansas nonresident return; Massachusetts taxes residents on all income, so you also file at home and claim the credit for tax paid to Arkansas. File Arkansas first.

Which state should my employer be withholding for?

Arkansas. The wages are sourced to Arkansas, so Arkansas withholding is correct and there is no Massachusetts withholding to set up.

Will I end up paying tax twice on the same income?

Not twice over, but you will pay the higher of the two rates. Massachusetts gives residents a credit for tax paid to Arkansas on the same income, claimed on Schedule OJC. The credit is capped at the Massachusetts tax on that income, so if Arkansas taxes it more heavily the excess is not refunded by either state.

How current is this?

The Massachusetts and Arkansas rules on this page were last checked against Massachusetts Department of Revenue and Arkansas Department of Finance and Administration 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.