Live in Tennessee, work in Arkansas
State income tax on wages · single filer · tax year 2026
Arkansas takes
$1,761
on wages earned there
Tennessee takes
$0
after the credit it gives
Both together
$1,761
state tax for the year
Cost of the line
$1,761
a year, above working at home
What crossing the line costs
costs youArkansas charges more than Tennessee would, and Tennessee only credits you up to its own bill — so the difference stays with you. Solid is what you actually pay; the faded part of the Tennessee bar is the credit it hands back. State income tax only — federal and payroll tax apply on top, and a city wage tax may too.
Which state taxes you, and what it costs
- Here is the thing people get wrong about Tennessee and Arkansas. Moving somewhere cheaper does not help if the job stays put. The state where you work takes its share first, and your home state only refunds up to what it charges itself. That leaves $1,761 a year that exists purely because the job is across the line. All in, $1,761.
- Plenty of states feed workers into Arkansas — 5 of them at this scale. Tennessee is number 4, with 6,371 jobs. You will not be the first person at your employer to have filed as an out-of-state worker.
- Arkansas taxes wages earned inside its borders by non-residents, and Tennessee taxes its residents on the same wages wherever they are earned. The resident credit resolves the overlap but does not erase it: Tennessee credits tax paid to Arkansas only up to what it would itself have charged on that income, so the commuter settles at the higher of the two liabilities rather than the sum. At the reference salary that is $1,761 against $0 for the same earner working at home — $1,761 attributable to the state line itself. ⚠️ The corollary is the part most readers have backwards: moving to a cheaper home state while keeping the job in Arkansas changes the split between the two treasuries and not the total.
- Arkansas draws commuters of this scale from 5 states, and Tennessee ranks number 4 among them with 6,371 jobs. A work state pulling from that many directions tends to have a well-established non-resident filing routine, which is a practical convenience rather than a tax saving.
Where the money goes
A $75,000 salary
- Federal income tax$7,670
- Social Security and Medicare$5,738
- Yours$61,593
| Federal income tax10.23% | $7,670 |
|---|---|
| Social Security and Medicare7.65% | $5,738 |
| Yours82.12% | $61,593 |
Which rung you are on
A $75,000 salary
| This rung starts at | $66,500 |
|---|---|
| Next rung starts at | $121,800 |
| Room before it | $46,800 |
Federal only, measured on gross pay — so the first rung is what the standard deduction covers.
The arithmetic, step by step
| Arkansas takes, on wages earned there | $1,761 |
|---|---|
| Tennessee charges its residents | $0 |
| Less the credit Tennessee gives | $0 |
| Total state tax | $1,761 |
| If you also worked in Tennessee | $0 |
| Difference | $1,761 |
On a reference salary of $60,000 a year, single filer. Both states run progressive schedules, so the figures do not simply scale — use the tool above for your own salary.
What this page does not cover
- One thing this page leaves out: city taxes. Some cities charge their own tax on people who work there, and it sits on top of everything above. Philadelphia is the well-known one. New York City only charges its own residents, so commuting in adds nothing. Check whether the city you work in is one that charges, because the Arkansas state figure is not the whole story if it does.
- The figures take the simple case: one job, in Arkansas, worked in person. Money from several states makes the credit a proportion instead of a cap. Working remotely from Tennessee can pull you under a different rule entirely, depending on the state.
- Sixty thousand a year is the assumption behind these amounts, chosen because nobody publishes average pay for a route between two states. At your own salary the numbers shift. The conclusion about which of Tennessee and Arkansas takes more usually does not, but the size of the difference can.
- These figures cover the STATE layer only. City and municipal wage taxes sit on top of them and are not included: a commuter into Philadelphia pays its wage tax on top of anything here, and Ohio's municipalities run their own credit system, which this site models in its own families. New York City, by contrast, taxes only its residents, so a commuter into it adds nothing at the city level. Whether Arkansas or Tennessee carries a local layer is a separate question from the state arithmetic above.
- The arithmetic assumes all wages are earned in Arkansas and that there is no other income. That matters for the credit: where income comes from several states, Tennessee limits the credit to the share of its own tax attributable to the Arkansas portion, computed as a ratio rather than the straightforward cap used above. It also assumes days are worked in Arkansas rather than remotely — several states tax a non-resident's remote days as though they were worked at the employer's location, which reverses the usual expectation and is handled on this site's reciprocity pages.
- Dollar amounts are computed at a stated reference salary of sixty thousand rather than a corridor wage average, which no published source provides per state pair. Because both states' liabilities and the credit between them are functions of the same income, the direction of the Tennessee to Arkansas comparison holds at other salaries even though the amounts do not — with one qualification worth stating, that a progressive schedule can change the SIZE of the gap at higher incomes, and in Arkansas's case a bracket crossed on one side and not the other is exactly where that happens.
Questions people ask
Do I pay state tax twice, to Tennessee and Arkansas?
You file in both states, but you do not pay the full amount to both. Tennessee credits the tax Arkansas collected, capped at its own charge on that income. The practical result is one bill at the higher of the two levels: $1,761 for the year.
Would moving out of Tennessee lower my state tax if I keep working in Arkansas?
Not while you work in Arkansas. That state's claim comes from where the work happens. Tennessee is the one giving ground, through the credit, and a cheaper home state gives less ground rather than costing you less. The number that matters is set by Arkansas.
Do I have to file tax returns in both Tennessee and Arkansas?
Two returns is the normal outcome here, even when only one state ends up taking anything. Arkansas generally wants to see a non-resident return from people who work there, and Tennessee wants your whole picture. It is paperwork rather than extra tax.
What if I work from home in Tennessee some days instead of going to Arkansas?
Working from home usually moves that day's pay out of Arkansas and into Tennessee alone. A handful of states disagree and tax remote days as if you had commuted. This page assumes you actually travel to Arkansas, so if a lot of your week is at home the split will differ from what you see here.
How is liability allocated between residence and work state on the same wages?
Both jurisdictions assert a claim on the same wages — Arkansas on a source basis, Tennessee on residence. The residence state grants a credit for tax paid to the source state, limited to the residence state's own liability on that income. Net combined liability therefore equals the greater of the two liabilities rather than their sum, $1,761 at the reference salary, and the split between the two treasuries is the only thing the credit changes.
Does changing residence reduce combined liability while the work state is unchanged?
No, while the source state is unchanged. Arkansas's claim arises from where the services are performed and is unaffected by residence. Because the residence credit is capped at the residence state's own liability, combined liability equals the greater of the two — so substituting a lower-tax residence reduces the residence-state component toward zero while leaving the total at Arkansas's level. The binding variable is the work location, not the home one.
What filing obligations arise in each state on this corridor?
Generally two. Tennessee requires a resident return reporting all income; Arkansas requires a non-resident return reporting the income sourced to it, which is also the mechanism by which the resident credit is substantiated. ⚠️ A filing obligation is distinct from a liability: a reciprocity exemption or a zero net position removes tax without necessarily removing the return, and the non-resident return is frequently what establishes the credit claimed on the resident one.
How do remote working days affect sourcing between these two states?
Ordinarily wages are sourced to where the services are performed, so days worked remotely from Tennessee fall outside Arkansas's jurisdiction and the source-state apportionment shrinks accordingly. ⛔ The exception is the "convenience of the employer" rule, which several states apply: a non-resident's remote days are sourced to the employer's location unless the remote work is required by the employer rather than chosen by the employee. The figures on this page model in-person attendance in Arkansas throughout.