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Generally, if you live in one state but work in another, you must file an income tax return in both states. This is because withholding tax is deducted from your paycheck in the state where you work.

In some cases, you may benefit from what's called a "reciprocal agreement" between states. This kind of agreement allows your employer to withhold taxes from the state where you live instead of the state where you work. Taxes still need to be withheld, so you can't avoid that part. But, you will only have to file a return in your resident state. 

States with current reciprocal agreements are listed below. This does not apply to you unless you file the required tax forms. Talk to your employer to file the necessary paperwork. 


Arizona

  • California, Indiana, Oregon, Virginia
  • Form WEC Employee 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
  • 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 for Tax Year 2019

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

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