Live in Tennessee, Work in Hawaii: Which State Taxes Your Paycheck?
Answer
Hawaii withholds, Tennessee does not. As a Tennessee resident you have no home-state income tax return at all, so the Hawaii nonresident return is the whole of your state filing. Nothing offsets the Hawaii tax, because a credit has to be claimed against a home-state tax that does not exist.
Last verified
Living in a state with no income tax removes the resident return, but it does not shelter income you earn somewhere else. Hawaii taxes what is earned inside Hawaii, whoever earns it, and a nonresident return is how that gets settled.
What you file
- 1Nonresident return · HawaiiForm N-15
File a Hawaii nonresident return for the wages you earned in Hawaii. Tennessee has no wage income tax, so there is no second return and no credit to claim.
The two states, side by side
| Tennessee | Hawaii | |
|---|---|---|
| Taxes wages | No | Yes — graduated |
| Reciprocity partners | None | None |
| Convenience rule | No | No |
| Nonresident return | Not applicable | Form N-15 |
| Credit for other-state tax | No income tax | Schedule CR |
| Nonresident safe harbour | Not applicable | None published |
| Local income tax | No | No |
| Revenue department | Tennessee Department of Revenue | Hawaii Department of Taxation |
| Last verified |
The other direction
Reversing the commute does not always reverse the answer. Living in Hawaii 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 → HawaiiNo state income tax on your wages
- 1099 contractor: Tennessee → HawaiiClient state only, if you work there
- Moved mid-year: Tennessee → HawaiiOne part-year return — the state you moved to
Other Tennessee pairs
Questions people actually ask
I live in Tennessee and work in Hawaii. Which state takes the tax out of my paycheck?
Hawaii withholds, Tennessee does not. As a Tennessee resident you have no home-state income tax return at all, so the Hawaii nonresident return is the whole of your state filing. Nothing offsets the Hawaii tax, because a credit has to be claimed against a home-state tax that does not exist.
Which state should my employer be withholding for?
Hawaii. The wages are sourced to Hawaii, so Hawaii 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 Hawaii rules on this page were last checked against Tennessee Department of Revenue and Hawaii Department of Taxation 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
- Hawaii Department of Taxation — individual income taxaccessed 2026-08-07