Live in Tennessee, Work in Arkansas: Which State Taxes Your Paycheck?
Answer
One return, filed in Arkansas. Your employer withholds Arkansas tax on the wages you earn there and you settle up on a Arkansas nonresident return. Tennessee does not tax wages, so this pair produces a single state filing rather than two.
Last verified
This is the mirror image of the more common commute. There is no home-state return to file, so the Arkansas nonresident return carries the whole obligation — and because Tennessee charges nothing, there is no credit mechanism involved anywhere.
What you file
- 1Nonresident return · ArkansasForm AR1000NR
File a Arkansas nonresident return for the wages you earned in Arkansas. Tennessee has no wage income tax, so there is no second return and no credit to claim.
The two states, side by side
| Tennessee | Arkansas | |
|---|---|---|
| Taxes wages | No | Yes — graduated |
| Reciprocity partners | None | None |
| Convenience rule | No | No |
| Nonresident return | Not applicable | Form AR1000NR |
| Credit for other-state tax | No income tax | Form AR1000TC |
| Nonresident safe harbour | Not applicable | None published |
| Local income tax | No | No |
| Revenue department | Tennessee Department of Revenue | Arkansas 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 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.
- Remote worker: Tennessee → ArkansasNo state income tax on your wages
- 1099 contractor: Tennessee → ArkansasClient state only, if you work there
- Moved mid-year: Tennessee → ArkansasOne part-year return — the state you moved to
Other Tennessee pairs
Questions people actually ask
I live in Tennessee and work in Arkansas. Which state takes the tax out of my paycheck?
One return, filed in Arkansas. Your employer withholds Arkansas tax on the wages you earn there and you settle up on a Arkansas nonresident return. Tennessee does not tax wages, so this pair produces a single state filing rather than two.
Which state should my employer be withholding for?
Arkansas. The wages are sourced to Arkansas, so Arkansas withholding is correct and there is no Tennessee withholding to set up, because Tennessee levies no income tax on wages.
How current is this?
The Tennessee and Arkansas rules on this page were last checked against Tennessee 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.
- Tennessee Department of Revenue — individual income taxaccessed 2026-08-07
- Arkansas Department of Finance and Administration — individual income taxaccessed 2026-08-07