Live in North Carolina, Work in Texas: Which State Taxes Your Paycheck?
Answer
One state, one return: North Carolina. Texas has no wage income tax, so working there changes nothing about what you owe. Your North Carolina resident return reports the Texas income along with everything else, and there is no credit to claim because Texas charged you nothing.
Last verified
The instinct that working in a no-tax state means paying no tax is the single most expensive misunderstanding in this niche. Texas takes nothing, but North Carolina still taxes residents on income earned anywhere, so the full amount lands on your North Carolina return.
What you file
- 1Resident return · North Carolina
File a North Carolina resident return reporting all of your income.
The two states, side by side
| North Carolina | Texas | |
|---|---|---|
| Taxes wages | Yes — flat | No |
| Reciprocity partners | None | None |
| Convenience rule | No | No |
| Nonresident return | Form D-400 with Schedule PN | Not applicable |
| Credit for other-state tax | Form D-400TC | No income tax |
| Nonresident safe harbour | None published | Not applicable |
| Local income tax | No | No |
| Revenue department | North Carolina Department of Revenue | Texas Comptroller of Public Accounts |
| Last verified |
The other direction
Reversing the commute does not always reverse the answer. Living in Texas and working in North Carolina gives:Work 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.
- Remote worker: North Carolina → TexasHome state only
- 1099 contractor: North Carolina → TexasHome state only — estimated payments
- Moved mid-year: North Carolina → TexasOne part-year return — the state you left
Other North Carolina pairs
Questions people actually ask
I live in North Carolina and work in Texas. Which state takes the tax out of my paycheck?
One state, one return: North Carolina. Texas has no wage income tax, so working there changes nothing about what you owe. Your North Carolina resident return reports the Texas income along with everything else, and there is no credit to claim because Texas charged you nothing.
Which state should my employer be withholding for?
North Carolina. Your employer should withhold North Carolina tax rather than Texas tax on these wages. If a Texas line is showing on your pay stub, raise it with payroll now rather than at filing time.
How current is this?
The North Carolina and Texas rules on this page were last checked against North Carolina Department of Revenue and Texas Comptroller of Public Accounts 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.
- North Carolina Department of Revenue — individual income taxaccessed 2026-08-07
- Texas Comptroller of Public Accounts — individual income taxaccessed 2026-08-07