Work in Mississippi, Live in Tennessee: How Your Wages Are Taxed

Reciprocity

Do Mississippi and Tennessee have a reciprocity agreement?

Reciprocity does not enter the picture, because Tennessee has no wage tax to trade. Article II, Section 28 of the Tennessee Constitution says the Legislature shall not levy, authorize or otherwise permit any state or local tax upon payroll or earned personal income. That covers city and county wage taxes as well as a state one.

Mississippi, for its part, taxes nonresidents on work done inside its borders. Its employer instructions state that nonresident employees, including seasonal or temporary workers, are subject to Mississippi withholding on any part of their wages received for services performed within Mississippi. The list of income exempt from withholding covers items such as domestic service in a private home and farm work; it has no exception based on the employee's home state. So a commuter from Memphis, Collierville or another Tennessee town to a job in Mississippi pays Mississippi, and only Mississippi.

Filing

Which tax return does a Tennessee resident file for a Mississippi job?

You file Form 80-205, the Non-Resident or Part-Year Resident Individual Income Tax Return. The Mississippi instructions say you should file if you had Mississippi income tax withheld from wages or if you are a nonresident with income taxed by Mississippi. There is nothing to file in Tennessee for your wages.

• Due date: calendar year returns must be filed no later than April 15.
• Extension: if you are due a refund or owe nothing more, Mississippi gives you the same extra time the IRS allows. If you owe, the tax must be paid with Form 80-106 by the original due date.
• Total income: the return asks for income from all sources, including anything earned outside Mississippi, because that total is used to prorate your exemptions and deductions.

Two details trip people up. First, casino winnings are handled separately: winnings reported from Mississippi casinos carry a 3% non-refundable tax, and an out-of-state resident whose only Mississippi income was those winnings does not need to file. Once you also have Mississippi wages, the wage rules above apply. Second, lateness costs money. Unpaid tax after the original due date draws interest of 1/2% per month plus a penalty of 1/2% per month, capped at 25%, and a return filed after October 15 faces a failure-to-file penalty of 5% per month up to 25%, never less than $100.

The math

How does Mississippi calculate tax on a nonresident?

Form 80-205 turns on one ratio. On line 13c of the 2025 form you divide Mississippi income (line 13a) by total income from all sources (line 13b); the result cannot exceed 100%. That percentage is then applied to your standard or itemized deduction and to your exemption, so a nonresident gets only the Mississippi share of each.

Mississippi then taxes the first $10,000 of taxable income at 0% and the remaining balance at 4.0% for tax year 2026. These figures come from the Department's 2026 withholding publication. For the 2025 return you file in 2026, the booklet sets the rate at 0% on the first $10,000 and 4.4% on taxable income above $10,000. The booklet also lists the next scheduled steps: 3.75% above $10,000 for tax year 2027 and 3.5% for 2028. This is general information, not tax advice.

Couples

How do a spouse's Tennessee wages affect the Mississippi return?

If you are married and only one of you works in Mississippi, the Tennessee paycheck still shows up on Form 80-205. Mississippi prorates the exemption and deduction by the ratio of Mississippi income to the total income of taxpayer and spouse from all sources. Only the Mississippi income is taxable, but total income must be declared so the proration comes out right.

The effect is easy to miss. Say one spouse earns $50,000 at a Mississippi job and the other earns $50,000 in Tennessee. The ratio is 50%, so the couple keeps half of the married exemption of $12,000 and half of the $4,600 standard deduction. The Tennessee wages are never taxed by Mississippi; they simply shrink the share of the allowances the Mississippi earner can use.

Credits

Is there a double-taxation credit to claim?

No. A credit for taxes paid to another state only matters when two states tax the same wages, and Tennessee taxes none of them. Mississippi's own credit for income tax paid to another state is meant for Mississippi residents, and the instructions mark that line as not applicable on the Non-Resident Return. Your Mississippi tax, less the Mississippi withholding shown on your W-2, is the whole story.

That also tells you what a correct pay stub looks like. Expect federal income tax, Social Security, Medicare and one state line for Mississippi. There should be no Tennessee state or city income tax line, because the same constitutional provision reaches local taxes on earned income. If your stub shows Mississippi withholding far above what the worked example on this page suggests, check that payroll has your Form 89-350 on file and that your Mississippi and non-Mississippi days are split correctly.

One Tennessee charge can still apply to some commuters: the professional privilege tax. Tennessee charges $400 a year, due June 1, to people licensed or registered to practice certain professions, including attorneys, securities agents, broker-dealers, investment advisers and lobbyists. You pay it once a year even with more than one license. The constitutional bar on earned-income taxes does not affect it, because the same section keeps any tax that was in effect on January 1, 2011.

Example: hybrid commuter, single, $60,000 salary

Tennessee resident with 80% of workdays at a Mississippi site and 20% at home in Tennessee, standard deduction, 2026 rate and allowances from Pub 89-700. Approximate; check the 2026 Form 80-205 instructions when released.

Payroll

What should your Mississippi employer withhold?

Give your employer a Mississippi Employee's Withholding Exemption Certificate, Form 89-350. The Department warns that federal exemption certificates will not supply the proper information for Mississippi withholding, and if you do not file Form 89-350, the employer must withhold based on zero exemption. As a single filer you enter $6,000; married filers split $12,000 depending on whether the spouse works.

If your employer is not set up for Mississippi withholding, or your pay includes income with no withholding, check the estimated tax rule. You must make estimated payments with Form 80-106 if less than 80% of your annual Mississippi liability is prepaid through withholding and that liability is more than $200. The four installments fall on April 15, June 15, September 15 and January 15.

Tips and bonuses follow the same state rule as salary. Mississippi treats tips and gratuities as taxable income subject to withholding, whether they come from the customer or the employer. When a bonus, commission or overtime payment arrives in the same check as regular pay, the employer withholds as if the two were a single wage payment for the pay period.

Remote work

What if you work some days from home in Tennessee?

Mississippi taxes only the Mississippi share. Its FAQ says that if you perform services partly in and partly out of the state, only the wages you are paid for the services performed in Mississippi are subject to Mississippi income tax, and your W-2 should show the wages earned in each state.

Withholding can run ahead of that. Under the employer instructions, when a nonresident's principal place of employment is in Mississippi and the employee only occasionally works outside the state, withholding applies to total wages unless the other state requires withholding. Tennessee requires none, so an occasional home-office day may still carry Mississippi withholding. On a regular hybrid schedule, where your principal workplace is not in Mississippi, the employer withholds only on Mississippi-day wages. Either way, your return is where the tax is settled: report only Mississippi-source wages in the Mississippi column and keep a calendar showing where you worked.

Corrections

What if the wrong amount of Mississippi tax was withheld?

If the state wage figure on your W-2 is wrong, the Department's answer is direct: obtain a corrected Form W-2C from your employer. Then file Form 80-205 with the corrected numbers. Even if your income turns out to be too low to require a return, the FAQ says you must file a Mississippi return to get back Mississippi tax withheld from your wages.

If no W-2 arrives at all, contact the employer first. If that fails, attach federal Form 4852 and a copy of your final pay stub to the Mississippi return so the Department can verify the withholding.

Moving

What if you moved between Tennessee and Mississippi this year?

A move in either direction makes you a part-year resident, and part-year residents also use Form 80-205. The instructions say a part-year resident is taxed on income earned while a Mississippi resident and prorates deductions and exemptions. Wages for work performed in Mississippi during the months you lived in Tennessee are still Mississippi-source pay, the same as for a full-year nonresident.

Mississippi treats someone who keeps a home or place of abode in the state, votes there or claims homestead exemption as a resident even when temporarily away, and it points to changes in driver license, vehicle tags, voter registration and property taxes as signs of a new legal residence. Update those records promptly when you move to Tennessee, and keep proof of the move date.