Border Patrol: Live in One State While Working in Another

This article was last edited on February 16, 2016. For updated information on living in one state while working in another, read more here.

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**




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