If you live in AL and work in GA you will file a non resident GA return and a resident AL return. The income you earn in GA will be taxed by GA. You will report that same income to AL along with any other taxable income to AL (interest, dividends, etc.). You will get a credit in AL for the tax paid in GA. The credit is based on the lesser of, the tax paid to GA or the tax on GA income using AL rates. Does that help?