Work in Tennessee, Live in Mississippi: How Taxes Work

Reciprocity

Do Tennessee and Mississippi Have a Tax Reciprocity Agreement?

No formal reciprocity agreement exists between Tennessee and Mississippi, and none is needed. Reciprocity agreements only matter when both states impose an income tax on wages. Tennessee does not tax wage income at all, so there is nothing for Mississippi to negotiate against.

Tennessee's only prior personal income tax was the Hall income tax, which applied to certain interest and dividend income. That tax was phased out through 2020 and fully repealed effective January 1, 2021. Since that date, Tennessee levies no personal income tax on individuals, whether on wages, interest, or dividends. Federal payroll taxes, Social Security, and Medicare continue to apply, but no Tennessee state income tax is withheld from your paycheck.

Mississippi taxes its residents on all income from all sources, including wages earned by a resident who commutes to a Tennessee job. The result for a Memphis-area or DeSoto County resident is simple in structure: Tennessee takes nothing on your wages, and Mississippi taxes the full amount on your Mississippi resident return.

Filing Obligations

Which Tax Return Do I File as a Mississippi Resident Working in Tennessee?

File Mississippi Form 80-105, the Resident Individual Income Tax Return, and include your Tennessee wages in the total. Mississippi residents report income from all sources regardless of where the income was earned. Your Tennessee W-2 wages flow through Mississippi adjusted gross income the same as any Mississippi-source earnings.

You do not file a Tennessee individual income tax return on wages, because Tennessee does not levy one. There is no Tennessee nonresident return, no Tennessee resident return, and no Tennessee withholding to reconcile at the state level.

For tax year 2025, Mississippi taxes taxable income at 0 percent on the first $10,000 and 4.4 percent on amounts above $10,000. Standard deductions are $2,300 for single filers, $3,400 for head of household, and $4,600 for married filing jointly. Confirm the current-year rate and deduction with the Mississippi Department of Revenue before filing, since the flat rate is on a legislated glide path in later years.

Mississippi returns are due April 15. The 2025 return filing deadline is April 15, 2026.

Employer Withholding

Will My Tennessee Employer Withhold Mississippi State Tax?

Not always. Tennessee employers have no obligation to register for Mississippi withholding solely because a worker lives in Mississippi. Some large employers with multi-state payroll systems will withhold Mississippi tax as a courtesy if you request it in writing. Smaller Tennessee-based employers may decline.

Ask your payroll department whether they can set up Mississippi withholding. If yes, complete Mississippi Form 89-350, the Withholding Exemption Certificate, and give it to your employer. If no, you are responsible for paying Mississippi tax directly through estimated payments.

Federal withholding, Social Security, and Medicare are handled by every U.S. employer regardless of state, so your paycheck still has federal tax withheld. Only the state layer is affected by the Tennessee employer location.

Check your first pay stub after any change. If you see Tennessee state tax withheld, that is an error, since Tennessee has no wage income tax. Contact payroll and ask them to correct the box and refund any amount withheld in error. Save the corrected pay stub and updated W-2 for your records.

Estimated Payments

How Do I Avoid a Mississippi Underpayment Penalty?

When your Tennessee employer does not withhold Mississippi tax, you generally owe Mississippi estimated tax payments in four installments during the year. The Mississippi Department of Revenue provides Form 80-106 for estimated payments. Installments are due April 15, June 15, September 15, and January 15 for the following year.

Compute your expected Mississippi tax for the year based on projected wages, then divide into four equal installments and pay each on time. Underpayment penalties apply if total withholding plus estimated payments fall short of a safe-harbor threshold under Mississippi rules. Review the current instructions for Form 80-106 for the exact safe-harbor percentages before filing your first installment.

An alternative to estimated payments is to have federal withholding grossed up by asking your Tennessee employer to withhold extra federal tax that you then use to help cover Mississippi liability at filing time. That approach does not credit Mississippi directly, so it does not stop an underpayment penalty; only actual Mississippi payments do that.

Keep confirmations of each estimated payment and reconcile them against your Mississippi return.

Credit for Other Taxes

Do I Get a Credit on My Mississippi Return for Tennessee Taxes?

No, because there is no Tennessee income tax on wages to credit. Mississippi's credit for taxes paid to another state, computed on Form 80-160, applies when a Mississippi resident actually pays income tax to another state on income also taxed by Mississippi. Since Tennessee levies no personal income tax on your wages, the credit does not apply.

If you accidentally had Tennessee state tax withheld, you cannot claim a Mississippi credit for it, because Tennessee will refund the incorrectly withheld amount directly. Contact the Tennessee employer's payroll department or file the appropriate Tennessee refund request through the state Department of Revenue for any tax withheld in error.

The other-state credit does apply in reverse situations, such as a Mississippi resident who works in a state that taxes wages, like Alabama or Louisiana. For a Tennessee commute, though, the calculation is simpler because the Tennessee side of the ledger is zero for wages.

Worked Example: Mississippi Resident Earning $70,000 in Tennessee

Single filer, all wages from a Tennessee employer, Mississippi 2025 rates, before personal exemption

Remote Work

What If I Work from Home in Mississippi for a Tennessee Employer?

Working from home in Mississippi does not change your Mississippi state tax outcome. Mississippi already taxes all of your wages as a resident, whether you earn them in a Tennessee office or at your Mississippi kitchen table. There is no additional Mississippi tax owed from remote work, and Tennessee still has no wage tax to apply either way.

Where remote work can matter is nexus for your Tennessee employer. If a Tennessee employer starts having Mississippi remote workers, the company may take on Mississippi payroll and business tax responsibilities. Employers sometimes handle that by hiring through a payroll service, treating you as a Mississippi-registered employee, and withholding Mississippi tax. That change is helpful for you because it removes the need for estimated payments.

Tennessee does not apply a convenience of the employer rule to nonresidents, since it has no personal wage income tax to enforce. Your Mississippi liability tracks Mississippi residency rules, not where the work is performed.

Mid-Year Move

What If I Moved Between Tennessee and Mississippi During the Year?

If you moved from Tennessee to Mississippi during the tax year, file Mississippi Form 80-205, the Non-Resident and Part-Year Resident Individual Income Tax Return. Report the wages earned during the months you were a Mississippi resident. Wages earned while you still lived in Tennessee are not Mississippi-source income for that period, because Mississippi taxes only the days you were a Mississippi resident.

If you moved from Mississippi to Tennessee during the year, file the same Mississippi Form 80-205 as a part-year resident. Report the wages earned during the months you were still a Mississippi resident, and stop the Mississippi calculation at your move date. Wages earned after the move are Tennessee-only income and face no state tax.

Document the move date with utility activation records, lease or closing documents, or the new driver's license issue date. Mississippi part-year residents also have to allocate the standard deduction to the resident period rather than claim the full annual amount.

Local Taxes

Do Tennessee or Mississippi Impose Local Income Taxes on My Wages?

Neither state levies a local income tax on wages. Tennessee has no state income tax on wages and no municipal or county wage tax. Mississippi cities and counties similarly do not impose their own income taxes. Your entire state income tax obligation is the Mississippi state calculation on Form 80-105 or Form 80-205.

Other local charges may still appear on a Tennessee paycheck. Occupational privilege fees, employer-side unemployment insurance, and municipal business license fees are paid by the employer, not withheld from wages, so they do not appear on your W-2 as employee tax. If a payroll deduction is unclear on your Tennessee pay stub, ask payroll for the specific tax code and confirm it is not a state or local income tax that would need to be reconciled on a return.

Federal income tax, Social Security, and Medicare are the same in both states and are handled through federal Form W-4 with your employer.