In the United States, federal taxes apply to workers no matter where they live. State taxes, however, can vary — especially for workers who live and work in different states.
Note:
Reciprocal agreements are applicable only if you file the required tax forms. Talk to your employer about filing the necessary paperwork.
Some reciprocal agreements are bilateral (both states agree how to handle income taxes for cross-border workers) and some are unilateral (one state decides how it treats the income its residents earn in other states; they don't require agreements from those other states). Most reciprocal tax agreements are bilateral.
Nine states (Alaska, Florida, Nevada, New Hampshire, South Dakota, Tennessee, Texas, Washington, and Wyoming) assess no state income tax. Cross-border workers who work in these states need to pay state taxes only in their states of residence. If you live in one of these states and work in another state, you'll need to file a non-resident return to pay income tax in the state where you work.
State | States in Agreement | Certificate/Form to Use |
Arizona | California, Indiana, Oregon, Virginia | Form WEC Withholding Exemption Certificate |
District of Columbia | All nonresidents who work in DC can claim exemption from withholding for the DC income tax. | Form D-4A Certificate of Nonresidence in the District of Columbia |
Illinois | Iowa, Kentucky, Michigan, Wisconsin | Form IL-W-5-NR Employee's Statement of Nonresidence in Illinois |
Indiana | Kentucky, Michigan, Ohio, Pennsylvania, Wisconsin | Form WH-47 Certificate of Residence |
Iowa | Illinois | Form 44-016 Employee's Statement of Nonresidence in Iowa |
Kentucky | Illinois, Indiana, Michigan, Ohio, West Virginia, Wisconsin, Virginia | Form 42A809 Certificate of Nonresidence |
Maryland | District of Columbia, Pennsylvania, Virginia, West Virginia | Form MW 507 Employee's Maryland Withholding Exemption Certificate |
Michigan | Wisconsin, Indiana, Kentucky, Illinois, Ohio, Minnesota | Form MI-W4 Employee's Michigan Withholding Exemption Certificate |
Minnesota | Michigan, North Dakota | Form MWR Reciprocity Exemption/Affidavit of Residency |
Montana | North Dakota | Form NR-2 Employee Certificate of North Dakota Residence |
New Jersey | Pennsylvania | Form NJ-165 Employee's Certificate of Nonresidence in New Jersey |
North Dakota | Minnesota, Montana | Form NDW-R Reciprocity exemption from withholding for qualifying Minnesota and Montana residents working in North Dakota |
Ohio | Indiana, Kentucky, Michigan, Pennsylvania, West Virginia | Form IT-4NR Employee's Statement of Residency in a Reciprocity State |
Pennsylvania | Indiana, Maryland, New Jersey, Ohio, Virginia, West Virginia | Form REV-419 Employee's Nonwithholding Application Certificate |
Virginia | Kentucky, Maryland, District of Columbia, Pennsylvania, West Virginia | Form VA-4 Personal Exemption Worksheet |
West Virginia | Kentucky, Maryland, Ohio, Pennsylvania, Virginia | Form WV/IT-104 Employee's Withholding Exemption Certificate |
Wisconsin | Illinois, Indiana, Kentucky, Michigan | Form W-220 Nonresident Employee's Withholding Reciprocity Declaration |