Ok, just to set the record straight: I live in TN and work in MS and have for years. This means I'm required to file a Non-Resident MS State Income Tax Return (Form 80-205). And yes, I pay MS taxes on all the income I earn while in the state of MS; I do NOT get it refunded back to me! My wife works full-time in TN so we do not pay any state taxes on her salary. You must also fill out MS Form 80-108 for your Itemized Deductions (have your Federal Form 1040 Schedule A available to help fill out the MS Form). And yes, that means if you just took a job in MS but live in TN, you took a 'pay cut'! My advise, if it's a "job transfer", point this out to your boss and ask for a small raise to compensate for the taxes you'll now have to pay...can't hurt to ask!