Why do I pay two state income taxes?

Are you working in Utah or Colorado. If your work is in Colorado the fact that the company is in Utah does not effect your income tax and they should not be taking Utah withholding from your check. If on the other hand you do work in Utah you will be required to file a return in both states. There will be adjustments so you will not be paying twice.

You aren't double taxed. You are ultimately taxed at the higher rate between the two states.

You will file a Utah non-resident return first. After you are done with it, you will file a Colorado resident return. On the Colorado return, you will get a credit for taxes paid to Utah. If that credit covers what you would have paid to Colorado, you don't owe Colorado anything else. If they don't, you owe Colorado only the difference between what you should have paid Colorado and what you have already paid Utah.

Well, it's a nice day here in Denver, CO. Allow me to answer your question. First, State taxes are optional for residents but your not a Utah resident are you? That is why you are being taxed by Utah. States tax non-residents income made within their borders. The thought behind this is since your not a resident, you won't be spending your income here therefore taking money from the state where you made it forcing the hosting state to collect a tax from you to pay for those roads and other quasi public goods you use while staying here. If you were a Utah resident, you would have the option of paying the state tax or not as any state resident has in there permanent state. Colorado wants there income tax because you are a Colorado citizen but I'm sure it optional unless your Union. Union members are required to pay state taxes- at least I am and my job is only Union attached. Colorado may be mandatory taxing your income because you make it as an expatriate but I'm not sure about this. I'm think to get around the mandatory non-resident income tax imposed by Utah you may be able to make a donation somewhere. This donation would be a write-off to you at the end of the year. You should consult a tax attorney on this though since I am not an attorney.

I would advise you to talk to an accountant who is specifically knowledgeable in this field. The main factor/indicator will be is what state are you considered a resident in. Depending on what state you are actually considered a resident it will define what taxes and amounts that you need to pay or receive.

Colorado's forms should have a credit for taxes paid to Utah.

you are actually working in Utah, of course that state's income tax will be withheld and you will file a non resident return next year

and since this is apparently a short, temporary, less than a year job, your tax home still remains Colo and they will expect income tax on your earnings since most states tax income from all sources

if this is a not a temporary job, then your tax home is where you work(not where you live) and you would file Utah state return, non resident for Colo.

it's not really double taxation. you'll file a UT non-resident return; then file a CO resident return and get credit for most if not all of what you paid to UT.

Nope. That's how the system works