Live in Texas, Work in California: Which State Taxes Your Paycheck?
Answer
Only California taxes you. California withholds from wages earned inside the state and you file a California nonresident return. Texas levies no personal income tax on wages, so there is no resident return on the other side — and no credit, because there is no Texas tax to offset.
Last verified
Living in a state with no income tax removes the resident return, but it does not shelter income you earn somewhere else. California taxes what is earned inside California, whoever earns it, and a nonresident return is how that gets settled.
What you file
- 1Nonresident return · CaliforniaForm 540NR
File a California nonresident return for the wages you earned in California. Texas has no wage income tax, so there is no second return and no credit to claim.
The two states, side by side
| Texas | California | |
|---|---|---|
| Taxes wages | No | Yes — graduated |
| Reciprocity partners | None | None |
| Convenience rule | No | No |
| Nonresident return | Not applicable | Form 540NR |
| Credit for other-state tax | No income tax | Schedule S |
| Nonresident safe harbour | Not applicable | None published |
| Local income tax | No | No |
| Revenue department | Texas Comptroller of Public Accounts | California Franchise Tax Board |
| Last verified |
The other direction
Reversing the commute does not always reverse the answer. Living in California and working in Texas 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: Texas → CaliforniaNo state income tax on your wages
- 1099 contractor: Texas → CaliforniaClient state only, if you work there
- Moved mid-year: Texas → CaliforniaOne part-year return — the state you moved to
Other Texas pairs
Questions people actually ask
I live in Texas and work in California. Which state takes the tax out of my paycheck?
Only California taxes you. California withholds from wages earned inside the state and you file a California nonresident return. Texas levies no personal income tax on wages, so there is no resident return on the other side — and no credit, because there is no Texas tax to offset.
Which state should my employer be withholding for?
California. The wages are sourced to California, so California withholding is correct and there is no Texas withholding to set up, because Texas levies no income tax on wages.
How current is this?
The Texas and California rules on this page were last checked against Texas Comptroller of Public Accounts and California Franchise Tax Board 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.
- Texas Comptroller of Public Accounts — individual income taxaccessed 2026-08-07
- California Franchise Tax Board — individual income taxaccessed 2026-08-07