Online Tax Filing Blog

The Official Blog of Tax Software


Border Patrol: Live in One State While Working in Another


In some areas of the country it is more likely that someone lives in one state while working in another. This is most common in cities that are very near state boarders. Living and working in two different states can pose a tax dilemma. It may difficult to determine which state to pay taxes in and where you to report your income.

There are two ways to report your income and it depends on whether or not the state you live in has a reciprocity agreement with the state that you work in. A reciprocity agreement means that you may report your income earned in another state on your state of residency’s tax state tax return.

If you have determined that the state you live in has a reciprocity agreement with the state that you work in, you may be required to fill out a form exempting you from the state you work in state’s tax. Once you fill out this form, the taxes taken out of your income will be from your state of residency

For example, the states of North Dakota and Montana have a reciprocity agreement. If you live in North Dakota and work in Montana, you will need to fill out Form NR-2 Employee Certificate of North Dakota Residence stating that you are a resident of North Dakota. Upon successfully completing this form, the state of Montana will not withhold Montana income tax and the state of North Dakota will withhold income tax on your earnings. You will only need to file a state tax return in North Dakota.

However, if you live in Georgia and work in South Carolina you will need to report your income differently because these states do not have a reciprocity agreement. You must report your earnings in both states by filing a non-resident tax return in South Carolina and a resident tax return in Georgia. You will receive a credit on your Georgia tax return for the taxes paid to South Carolina.

As of August 2013 the following states have reciprocity agreements:


States It Has A Reciprocity Agreement With

Appropriate Form to Gain Exemption

District of Columbia

Maryland, Virginia

Form D-4A


Kentucky, Michigan, Ohio, Pennsylvania, Wisconsin

Form IL-W-5-NR


Kentucky, Michigan, Ohio, Pennsylvania, Wisconsin

Form WH-47

Military Spouses Use

Form WH-4MIL



Form 44-016


Illinois, Indiana, Michigan, Ohio, Virginia, West Virginia, Wisconsin

Form 42A809


District of Columbia, Pennsylvania, Virginia, West Virginia

Form MW 507


Illinois, Indiana, Kentucky, Minnesota, Ohio, Wisconsin

Form MI-W4


Michigan, North Dakota, Wisconsin

Form MWR


North Dakota

Form NR-2

New Jersey


Form NJ-165

North Dakota

Minnesota, Montana

Form NDW-R


Indiana, Kentucky, Michigan, Pennsylvania, West Virginia

Form IT-4NR


Indiana, Maryland, New Jersey, Ohio, Virginia, West Virginia

Form REV-420


District of Columbia, Kentucky, Maryland, Pennsylvania, West Virginia

Form VA-4

West Virginia

Kentucky, Maryland, Ohio, Pennsylvania, West Virginia

Form WV/IT-104R


Illinois, Indiana, Kentucky, Michigan,

Form W-220

 **This information is subject to change. Please be sure to check with your state to learn more about current reciprocity agreements or lack thereof**




Comments are closed
Copyright © 2013 TaxSlayer LLC | 706-922-6741 | 3003 Allen Drive Evans, GA 30809
© 2013 Refund distribution subject to IRS acceptance of return & University National Bank. *IRS refund times will vary but most IRS refunds will be issued in less than 21 days after efiling. TaxSlayer cannot guarantee date of receipt of refund. Your Privacy is Important: We do not rent, sell or share your personal information with anyone. Your e-mail is used to communicate with you about your return status, retrieve your Username or reset your Password. *TaxSlayer phone support available January 2nd through April 19th. (C) 2013 JR Motorsports, LLC. The name, likeness and signature of Dale Earnhardt Jr are used with the permission of JR Motorsports, LLC and JRM Licensing, LLC.

*Free tax advice is available for free with TaxSlayer Premium Edition. This product is available by phone or email, Monday – Friday through April 15th. Please check the website for the hours of operation as they may vary due to capacity. * guarantees accurate calculations or we will reimburse you any Federal and/or State penalties and interest charges. *Maximum Refund Guarantee- Your refund is based on data supplied by you and is calculated based on the schedule and forms supported by A larger refund or smaller tax liability cannot be due to differences in data submitted to or positions taken that are contrary to law. If you find that another tax software calculated a larger refund or smaller tax liability based on the same information provided to, we will refund your applicable fees paid to *Actual prices for services rendered are determined at the time of print or efile and are subject to change without notice. Prices are good until April 1st 2013.

*All major forms and schedules: Your return is completed by all of the major forms and schedules supported by To see the complete list of major forms and schedules supported by visit *Supported Federal Forms page.
Go to top