Employees who work in D.C. but do not live there do not need to have an income tax D.C. Why? D.C. has a tax reciprocity agreement with each state. Suppose an employee lives in Pennsylvania but works in Virginia. Pennsylvania and Virginia have a mutual agreement. The employee only has to pay government and local taxes for Pennsylvania, not Virginia. They keep taxes for the employee`s home state. Although the states that are not mentioned do not have fiscal reciprocity, many have an agreement in the form of credits. Again, a credit contract means that the worker`s home state grants them a tax credit for the payment of state income tax to their working-age state.

Michigan has mutual agreements with Illinois, Indiana, Kentucky, Minnesota, Ohio and Wisconsin. Submit the MI-W4 leave form to your employer if you work in Michigan and live in one of these states. The states of Wisconsin with reciprocal tax agreements are: employees do not owe double the taxes in non-reciprocal states. But employees might have to do a little more work, for example. B file several government tax returns. If an employee works in Arizona but lives in one of the reciprocal states, they can submit the WeC, Employee Withholding Exemption Certificate form. Employees must also use this form to terminate their release from source (z.B. when they move to Arizona). Reciprocity indicates that an agreement between two or more states provides that they exempt from taxation the income of workers who work in one state but live in another.

These agreements allow residents of a state to work across national borders and pay income taxes only to their country of residence. The container is an interstate agreement that prevents workers from withholding twice the state`s taxes on their wages – once in the state where they live, and again for the state in which they work. The map below shows 17 states (including the District of Columbia) where non-resident workers living in different states do not have to pay taxes. Move the cursor over each orange state to see their reciprocity agreements with other states and find out what form non-resident workers must submit to their employers to be exempt from deduction in that state. Check out the map below to learn more about interstate reciprocity agreements. Living in one of the states covered by a reciprocal agreement means that taxes are not withheld by default on your paycheck – in other words, you shouldn`t have to file a tax return in your work statement to recover taxes that were wrongly denied to you. Use our chart to find out which states have mutual agreements. And find out what form the employee has to fill to keep you out of his or her original state: do you have an employee who lives in one state but works in another? If it is the presence, you usually keep government and local taxes for the state of work.