How to File Taxes in States with Reciprocity

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When you live in one state and work in another, it could impact where you file and pay income taxes. Reciprocity makes your tax filing situation simpler.   

What does state tax reciprocity mean?  

To put it simply, if the state where you work has a reciprocal tax agreement with the state where you live, then your work state shouldn’t withhold taxes from your paycheck. This makes filing state taxes simpler because you won’t be required to file a return for both states, and you won’t be waiting for your work state to send a refund if you’re owed one.  

Tax reciprocity only applies to state and local taxes. You’ll still be required to pay federal income taxes no matter where you live/work. 

Does my state have reciprocity with a neighboring state? 

Not all states have reciprocity. Just the same, states that share a border don’t always have an agreement with one another. See the complete list of states that have reciprocity agreements below. 

Where should I file state taxes if I work in a different state? 

If there is no reciprocal agreement between your work state and your home state, you should expect to file a return in both: file as a resident where you live and as a nonresident where you work. 

Don’t worry – your money won’t be taxed twice if your states don’t have a reciprocal agreement. Federal law does not allow two states to tax the same income. But, filing a state return for both is still important, because you’ll want to get a tax credit (or a refund) for taxes withheld from your work state. 

Read also: Tax Filing FAQs for Remote Workers and Contractors 

How to make sure taxes are not withheld by a reciprocal state 

It’s the employee’s responsibility to ask the employer to withhold taxes for their home state and not their work state. Each state has its own form to help you do this. Find the form for your work state below. 

States with tax reciprocity 

Montana 

Montana has a reciprocity agreement with North Dakota. If you are a resident of North Dakota but you work in Montana, income should not be withheld from your paycheck for Montana state taxes. 

Fill out and submit Form MW-4 to your employer. 

North Dakota 

North Dakota has a reciprocity agreement with Minnesota and Montana. If you are a resident of Minnesota or Montana but you work in North Dakota, income should not be withheld from your paycheck for North Dakota state taxes. 

Fill out and submit Form NDW-R to your employer. 

Minnesota 

Minnesota has a reciprocity agreement with Michigan and North Dakota. If you are a resident of Michigan or North Dakota but you work in Minnesota, income should not be withheld from your paycheck for Minnesota state taxes. 

Fill out and submit Form MWR to your employer. 

Iowa 

Iowa has a reciprocity agreement with Illinois. If you are a resident of Illinois but you work in Iowa, income should not be withheld from your paycheck for Iowa state taxes. 

Fill out and submit Form IA 44-106 to your employer. 

Illinois 

Illinois has a reciprocity agreement with IowaKentuckyMichigan, and Wisconsin. If you are a resident of IA, KY, MI, or WI, but you work in Illinois, income should not be withheld from your paycheck for Illinois state taxes. 

Fill out and submit Form IL-W-5-NR to your employer. 

Michigan 

Michigan has a reciprocity agreement with IllinoisIndianaKentuckyMinnesotaOhio, and Wisconsin. If you are a resident of one of these states but you work in Michigan, income should not be withheld from your paycheck for Michigan state taxes. 

Fill out and submit Form MI-W4 to your employer. 

Indiana 

Indiana has a reciprocity agreement with KentuckyMichiganOhioPennsylvania, and Wisconsin. If you are a resident of one of these states but you work in Indiana, income should not be withheld from your paycheck for Indiana state taxes. 

Fill out and submit Form WH-47 to your employer. 

Wisconsin 

Wisconsin has a reciprocity agreement with IllinoisIndianaKentucky, and Michigan. If you are a resident of one of these states but you work in Wisconsin, income should not be withheld from your paycheck for Wisconsin state taxes. 

Fill out and submit Form W-220 to your employer. 

Arizona 

Arizona has a reciprocity agreement with CaliforniaIndianaOregon, and Virginia. If you are a resident of one of these states but you work in Arizona, income should not be withheld from your paycheck for Arizona state taxes. 

Fill out and submit Arizona Form WEC to your employer. 

Ohio 

Ohio has a reciprocity agreement with IndianaKentuckyMichiganPennsylvania, and West Virginia. If you are a resident of one of these states but you work in Ohio, income should not be withheld from your paycheck for Ohio state taxes. 

Fill out and submit Form IT 4NR to your employer. 

Pennsylvania 

Pennsylvania has a reciprocity agreement with IndianaMarylandNew JerseyOhioVirginia, and West Virginia. If you are a resident of IN, MD, NH, OH, VA, or WV, but you work in Pennsylvania, income should not be withheld from your paycheck for Pennsylvania state taxes. 

Fill out and submit Form REV-419 EX to your employer. 

West Virginia 

West Virginia has a reciprocity agreement with KentuckyMarylandOhioPennsylvania, and Virginia. If you are a resident of one of these states but you work in West Virginia, income should not be withheld from your paycheck for West Virginia state taxes. 

Fill out and submit Form IT-140NRS to your employer. 

Kentucky 

Kentucky has a reciprocity agreement with IllinoisIndianaMichiganOhioVirginiaWest Virginia, and Wisconsin. If you are a resident of IL, IN, MI, OH, VA, WV, or WI, but you work in Kentucky, income should not be withheld from your paycheck for Kentucky state taxes. 

Fill out and submit Form 42A809 to your employer. 

Virginia 

Virginia has a reciprocity agreement with D.C.KentuckyMarylandPennsylvania, and West Virginia. If you are a resident of one of these states or D.C. but you work in Virginia, income should not be withheld from your paycheck for Virginia state taxes. 

Fill out and submit Form VA-4 to your employer. 

Maryland 

Maryland has a reciprocity agreement with D.C.PennsylvaniaVirginia, and West Virginia. If you are a resident of one of these states or D.C. but you work in Maryland, income should not be withheld from your paycheck for Maryland state taxes. 

Fill out and submit Form MW507 to your employer. 

New Jersey 

New Jersey has a reciprocity agreement with Pennsylvania. If you are a resident of Pennsylvania but you work in New Jersey, income should not be withheld from your paycheck for New Jersey state taxes. 

Fill out and submit Form NJ-165 to your employer. 

What about District of Columbia (D.C.)? 

D.C. has reciprocity with all states. So, if you work in D.C. but you live in any other state, you don’t have to file a tax return in D.C.  

Fill out and submit Form D-4A to your employer. 

For more info about filing taxes in two different states, read Filing Taxes When You Live in One State and Work in Another

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