How to file state taxes while W-2 from two states (different employer?

If you file taxes in two US states, and your non-resident state tax is higher, can you skip the resident state tax return?

• For example - live in CO, normally file Federal, NM and CO - NM tax rate is higher so CO tax is zero.  Can you just file Federal and NM?

• Answer:

  In the specific situation you cite, you cannot. If you are a full-year resident of Colorado and are required to file a US tax return, you are also required to file a Colorado tax return regardless of your Colorado tax liability. See http://www.colorado.gov/cms/forms/dor-tax/CY104.pdf. Many states have similar rules, since in states with income taxes full-year residents are usually required to pay taxes on all of their income regardless of the source of that income, and even if the state has one, the state generally has no way of knowing whether you are entitled to a credit for paying taxes to another state on that same income unless you file a return.