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If you work in Virginia than you are subject to VA state tax on the income earned in VA.
TN does not have income tax on earned income and hence, you will not owe any State income tax on this income.
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Please note: This advice is provided with the understanding that all the relevant facts have been provided by you. Any change in facts might affect the advice given and hence may not be relied on in such cases. Nothing contained in this reply was intended or written to be used, can be used by any taxpayer, or may be relied upon or used by any taxpayer for the purposes of avoiding penalties that may be imposed on the taxpayer under the Internal Revenue Code of 1986, as amended.
You will pay tax in VA as a non resident. The taxes would almost be the same that a VA resident would pay if that is all the income you made in the year.
State taxes normally depends on the State you performed the services from and not on the State where you live. If you performed services from TN than you will not owe any tax in VA. If your Co-worker is filing a tax return showing that he is working from TN while he is not, than it is possible that he is getting refund from VA. But that is not the correct filing procedure and he may be in trouble once the VA State finds it out.
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