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    Multi-state · Guide · 2026

    Live in One State, Work in Another

    Crossing a state line to work triggers two tax claims on the same paycheck. Here is which state wins, how the credit reconciles them, and the three situations where the reconciliation fails and you genuinely pay twice.

    IRS-Sourced
    Updated Reviewed for 2026 tax yearIRS-sourced

    Which state do I pay if I live in one state and work in another?

    Both, unless the two states have a reciprocity agreement. The work state taxes income earned inside its borders and you file a nonresident return there. Your residence state taxes all your income and gives you a credit for the tax paid to the work state — limited to the lesser of what you actually paid there or what your home state charges on that same income. File the nonresident return first.

    • Fifteen states have reciprocity agreements, plus DC, which cannot tax any nonresident
    • The credit is capped at your home state's tax on the same income
    • California with Arizona, Oregon or Virginia runs the credit in reverse — it is claimed on the NONRESIDENT state's return in each direction
    • New York's convenience rule can tax days you never physically worked there
    • Local taxes are almost never covered by reciprocity or by the state credit

    Source:Comptroller of Maryland v. Wynne, 575 U.S. 542 (2015)

    Which states have reciprocity with each other

    Fifteen states and the District of Columbia have wage reciprocity. Find your state, then look for the state where you live or work. If it is listed, only your home state taxes your wages, subject to the conditions in the next table. Every agreement was checked against the work state's own revenue department or statute on October 4, 2026.

    Every state with an income tax reciprocity agreement and the states it has agreements with
    StateHas reciprocity with
    District of ColumbiaMaryland, VirginiaThese states exempt DC residents who work there. DC itself cannot tax any nonresident's wages, whatever their home state.
    IllinoisIowa, Kentucky, Michigan, Wisconsin
    IndianaKentucky, Michigan, Ohio, Pennsylvania, Wisconsin
    IowaIllinois
    KentuckyIllinois, Indiana, Michigan, Ohio, Virginia, West Virginia, Wisconsin
    MarylandDistrict of Columbia, Pennsylvania, Virginia, West Virginia
    MichiganIllinois, Indiana, Kentucky, Minnesota, Ohio, Wisconsin
    MinnesotaMichigan, North Dakota
    MontanaNorth Dakota
    New JerseyPennsylvania
    North DakotaMinnesota, Montana
    OhioIndiana, Kentucky, Michigan, Pennsylvania, West Virginia
    PennsylvaniaIndiana, Maryland, New Jersey, Ohio, Virginia, West Virginia
    VirginiaDistrict of Columbia, Kentucky, Maryland, Pennsylvania, West Virginia
    West VirginiaKentucky, Maryland, Ohio, Pennsylvania, Virginia
    WisconsinIllinois, Indiana, Kentucky, Michigan

    A state missing from this list has no wage reciprocity agreement we could verify against its revenue department. Minnesota and Wisconsin have had none since January 1, 2010 (Wisconsin Department of Revenue).

    State reciprocity agreements, 2026

    Read each row as: if you work in this state but live in one of the listed states, file this certificate with your employer and the work state will not tax your wages, subject to any condition shown under the row. Each certificate links to the page that names it, and each row links to the page that establishes the agreement.

    State income tax reciprocity agreements by work state, with the exemption certificate to file
    Work stateExempt residents ofFile
    District of ColumbiaResidents of every state other than DCThe Home Rule Act bars DC from taxing any nonresident’s wages. Residents of every state other than DC file Form D-4A and owe no DC income tax.Form D-4AAgreement source
    IllinoisIowa, Kentucky, Michigan, WisconsinForm IL-W-5-NRAgreement source
    IndianaKentucky, Michigan, Ohio, Pennsylvania, WisconsinIndiana county income tax can still apply to the worksite county even when state tax does not.Form WH-47Agreement source
    IowaIllinoisForm 44-016Agreement source
    KentuckyIllinois, Indiana, Michigan, Ohio, Virginia, West Virginia, WisconsinIllinois, Indiana, Michigan, West Virginia, Wisconsin: Kentucky local occupational license taxes are not covered by the agreement.Ohio: Ohio residents qualify only if they are not a shareholder-employee who is a “twenty (20) percent or greater” direct or indirect equity investor in an S corporation (Form 42A809). Kentucky local occupational license taxes are not covered by the agreement.Virginia: Virginia residents qualify only if they commute daily to the Kentucky worksite. Kentucky local occupational license taxes are not covered by the agreement.Form 42A809Agreement source
    MarylandDistrict of Columbia, Pennsylvania, Virginia, West VirginiaDistrict of Columbia, Pennsylvania, Virginia: Does not apply if you maintain a place of abode in Maryland for 183 days or more in the year: you then become a Maryland statutory resident (Form MW507 instructions).West Virginia: West Virginia residents are exempt regardless of how long they spend in Maryland (Administrative Release No. 3).Form MW507Agreement source
    MichiganIllinois, Indiana, Kentucky, Minnesota, Ohio, WisconsinMichigan city income taxes are not covered by the agreement.A signed statement of your legal addressAgreement source
    MinnesotaMichigan, North DakotaApplies only if you return to your home in Michigan or North Dakota at least once a month (Minn. Stat. § 290.081(a); Form MWR line 3). If you don’t, Minnesota taxes the wages as a nonresident and the ordinary credit applies. Give Form MWR to your employer by the later of February 28 or 30 days after you start work or change your state of residence.Form MWRAgreement source
    MontanaNorth DakotaForm MW-4Agreement source
    New JerseyPennsylvaniaForm NJ-165Agreement source
    North DakotaMinnesota, MontanaMinnesota: Minnesota residents qualify only if they return to their Minnesota home at least once a month (Form NDW-R). If they don’t, North Dakota taxes the wages as a nonresident and the ordinary credit applies.Form NDW-RAgreement source
    OhioIndiana, Kentucky, Michigan, Pennsylvania, West VirginiaIndiana, Kentucky, Michigan, West Virginia: Ohio municipal (city) income tax is not covered by the agreement.Pennsylvania: Pennsylvania residents who are twenty percent shareholder-employees of an Ohio S corporation are not covered for their pay from it, according to the Pennsylvania Department of Revenue. Ohio municipal (city) income tax is not covered by the agreement.Ohio IT 4Agreement source
    PennsylvaniaIndiana, Maryland, New Jersey, Ohio, Virginia, West VirginiaIndiana, Maryland, New Jersey, Virginia, West Virginia: Philadelphia and other local wage taxes are not covered by the agreement.Ohio: Ohio residents who are twenty percent shareholder-employees of a Pennsylvania S corporation are not covered for their pay from it. Philadelphia and other local wage taxes are not covered by the agreement.Form REV-419Agreement source
    VirginiaDistrict of Columbia, Kentucky, Maryland, Pennsylvania, West VirginiaDistrict of Columbia, Kentucky: Applies only if you commute to Virginia every day and receive only wage or salary income in Virginia.Maryland, Pennsylvania, West Virginia: Applies only if you are present in Virginia 183 days or less in the year, keep no abode (such as a house or apartment) there, and receive only wage or salary income in Virginia.Form VA-4Agreement source
    West VirginiaKentucky, Maryland, Ohio, Pennsylvania, VirginiaForm WV/IT-104Agreement source
    WisconsinIllinois, Indiana, Kentucky, MichiganThe Wisconsin–Minnesota agreement ENDED for tax years after 2009 and has not been reinstated.Form W-220Agreement source

    Notable absences: New York has no reciprocity agreement with any state. The Minnesota–Wisconsin agreement ended for tax years after 2009. California has never had one.

    Start here: three questions

    1. Do the two states have a reciprocity agreement? If yes, everything below is moot. File the exemption certificate with your employer, stop the work-state withholding, and report the wages only at home.
    2. Is one of them California paired with AZ, OR or VA? If yes, the credit runs backwards — it is claimed on the NONRESIDENT state's return in each direction (a CA resident uses AZ Form 309, the Oregon nonresident return, or VA Schedule OSC; an AZ/OR/VA resident uses California Form 540NR with Schedule S). California dropped Indiana from this list for tax years beginning on or after January 1, 2017, so CA–IN now follows the ordinary rule.
    3. Does the work state have a convenience-of-the-employer rule? If yes, and you work from home some of the time, the work state may claim those days too — and your home state's credit may not reach them.
    Run your two states through the calculator

    The credit, and the cap most people miss

    Without an agreement, both states have a legitimate claim. The Supreme Court settled in Comptroller of Maryland v. Wynne (2015) that a residence state which taxes its residents on out-of-state income must relieve the resulting double tax. Every income-taxing state does so through a credit.

    The credit equals the lesser of (a) the tax you actually paid to the work state on the double-taxed income, or (b) the tax your residence state charges on that same income.

    Limb (b) is the trap. Consider $100,000 of wages earned in a state that charges $6,000 on them, by a resident of a state that would have charged $4,000. The credit is $4,000, not $6,000. The residence bill drops to zero, but the extra $2,000 paid to the work state is gone — no state refunds it. Reverse the states and the outcome flips: the credit covers the lower work-state tax and the residence state collects the difference, so your total lands at the higher residence rate either way.

    Practical consequence: your effective state rate is the higher of the two states, never the lower. Working across a border can only ever cost you more than staying home, never less.

    Reverse-credit states: when the credit runs backwards

    In these pairings the credit is claimed on the NONRESIDENT state’s return in each direction instead of the residence state’s: a California resident claims it on the other state’s nonresident return (FTB Schedule S excludes AZ/OR/VA for CA residents), and an AZ/OR/VA resident claims it on the California nonresident return. Claiming it on the wrong return produces a wrong result. Indiana was removed from California’s list for tax years beginning on or after January 1, 2017 and now follows the ordinary residence-state rule.

    California & Arizona — credit granted by the nonresident state (direction-dependent)

    For the California–Arizona pair the ordinary rule reverses: the credit is claimed on the NONRESIDENT state’s return in each direction. FTB Schedule S excludes Arizona for California residents, and Arizona bars its RESIDENTS from a Form 309 credit for California tax.

    California resident with Arizona-source income: claim the credit on your ARIZONA NONRESIDENT return (Form 309) — NOT on California Schedule S, which excludes Arizona for CA residents.

    Arizona resident with California-source income: you claim the credit on the CALIFORNIA nonresident return (Form 540NR, Schedule S), not on your Arizona resident return.

    Claimed on: the NONRESIDENT state’s return for your direction (AZ Form 309 as an Arizona nonresident, or CA Form 540NR Schedule S)

    California & Oregon — credit granted by the nonresident state (direction-dependent)

    California and Oregon are a reverse-credit pair: the credit is claimed on the NONRESIDENT state’s return in each direction — FTB Schedule S excludes Oregon for California residents.

    California resident with Oregon-source income: claim the credit on your OREGON NONRESIDENT return (Form OR-40-N) — NOT on California Schedule S, which excludes Oregon for CA residents.

    Oregon resident with California-source income: claim the credit on the CALIFORNIA nonresident return (Form 540NR, Schedule S) rather than on your Oregon resident return.

    Claimed on: the NONRESIDENT state’s return for your direction (OR Form OR-40-N as an Oregon nonresident, or CA Form 540NR Schedule S)

    California & Virginia — credit granted by the nonresident state (direction-dependent)

    California and Virginia are a reverse-credit pair, generally limited to income from personal services: the credit is claimed on the NONRESIDENT state’s return in each direction.

    California resident with Virginia-source personal-service income: claim the credit on your VIRGINIA NONRESIDENT return (Schedule OSC) — NOT on California Schedule S, which excludes Virginia for CA residents.

    Virginia resident with California-source income: claim the credit on the CALIFORNIA nonresident return (Form 540NR, Schedule S).

    Claimed on: the NONRESIDENT state’s return for your direction (VA Schedule OSC as a Virginia nonresident, or CA Form 540NR Schedule S)

    Convenience-of-the-employer states

    These states source a nonresident's work-from-home days to the employer's location unless the remote work is for the employer's necessity. This is where remote workers hit real, unrelieved double taxation — the home state taxes the day as worked at home, the employer state taxes the same day as worked in-state, and the credit may not bridge the gap because the two states disagree about where the income was sourced.

    New York

    The strictest version, and the one that generates the most controversy. Days worked from a home office outside New York are New York days unless the home office meets the Department’s bona-fide-employer-office test (TSB-M-06(5)I).

    New York revenue department →

    Delaware

    Delaware applies a convenience test to nonresident employees of Delaware employers who work remotely for their own convenience.

    Delaware revenue department →

    Nebraska

    Nebraska sources a nonresident’s compensation to Nebraska when the out-of-state work is performed for the employee’s convenience rather than the employer’s necessity (Neb. Admin. Code tit. 316, ch. 22, § 003).

    Nebraska revenue department →

    Pennsylvania

    Pennsylvania applies a convenience rule to nonresidents working remotely for Pennsylvania employers, though its many reciprocity agreements neutralize the rule for most neighboring-state residents.

    Pennsylvania revenue department →

    Connecticutretaliatory

    Connecticut applies a convenience test only to residents of states that themselves impose one — a deliberately retaliatory rule aimed squarely at New York (Conn. Gen. Stat. § 12-711(b)(2)(C)).

    Connecticut revenue department →

    New Jerseyretaliatory

    New Jersey adopted its own retaliatory convenience rule in 2023 (P.L. 2023, c. 125), applying it to residents of states that apply a convenience rule to New Jersey residents.

    New Jersey revenue department →

    No longer on this list

    Arkansas repealed its convenience-of-the-employer rule in Act 1019 of 2021, effective for tax year 2021. Wages for days a nonresident works outside Arkansas are no longer Arkansas-source income. Many national lists still show Arkansas; they are out of date.

    The worst case is a convenience-rule employer state combined with a no-income-tax residence state. A Florida or Texas resident working remotely for a New York employer can owe New York tax on those days with no home-state credit available, because there is no home-state tax to credit against.

    Six myths about double-taxed income

    “I only pay tax where I work.”

    Your residence state taxes 100% of your income wherever it was earned. The work state's claim is additional, not a substitute. The credit reconciles them; it does not remove the residence-state return.

    “I only pay tax where I live.”

    True only under a reciprocity agreement. Otherwise the state where the work was physically performed has the first claim on that income and generally requires a nonresident return.

    “The credit makes me whole.”

    It caps out at your home state's tax on the same income. Work in a state that taxes more heavily and the difference is simply lost.

    “Working remotely from home means my home state taxes it.”

    Not in a convenience-of-the-employer state. New York in particular treats home-office days as New York days unless the office meets a demanding bona-fide-employer-office test.

    “My employer withheld for the right state, so I am fine.”

    Withholding is the employer's best guess and is frequently wrong for cross-border and hybrid workers. It has no effect on which state is legally entitled to the tax — you reconcile on the returns.

    “Reciprocity covers all my local taxes too.”

    It generally does not. Philadelphia wage tax, Ohio municipal tax, Indiana county tax, Kentucky occupational license tax and Michigan city tax sit outside the state-level agreements.

    Filing order, step by step

    1. Complete your federal return first — both states start from federal figures.
    2. File the nonresident return in the work state, reporting only income sourced there. Note the tax it produces.
    3. File the resident return at home, reporting all income, and complete the other-state-tax-credit schedule using the figure from step 2.
    4. Attach a copy of the nonresident return where the residence state requires it — most do, and a missing copy is the most common reason a credit is disallowed on review.
    5. If you moved during the year rather than commuting, you file part-year returns in both states instead. See the moving states guide.

    Frequently asked questions

    Which state do I pay income tax to if I live and work in different states?
    Both, in the ordinary case. The state where you performed the work taxes that income as a nonresident, and your residence state taxes all of your income wherever earned. Your residence state then allows a credit for the tax paid to the work state, limited to the lesser of the tax you actually paid there or the tax your home state charges on the same income. If the two states have a reciprocity agreement, only your residence state taxes the wages.
    Which states have reciprocity agreements?
    Fifteen states and the District of Columbia. Illinois: Iowa, Kentucky, Michigan, Wisconsin; Indiana: Kentucky, Michigan, Ohio, Pennsylvania, Wisconsin; Iowa: Illinois; Kentucky: Illinois, Indiana, Michigan, Ohio, Virginia, West Virginia, Wisconsin; Maryland: District of Columbia, Pennsylvania, Virginia, West Virginia; Michigan: Illinois, Indiana, Kentucky, Minnesota, Ohio, Wisconsin; Minnesota: Michigan, North Dakota; Montana: North Dakota; New Jersey: Pennsylvania; North Dakota: Minnesota, Montana; Ohio: Indiana, Kentucky, Michigan, Pennsylvania, West Virginia; Pennsylvania: Indiana, Maryland, New Jersey, Ohio, Virginia, West Virginia; Virginia: District of Columbia, Kentucky, Maryland, Pennsylvania, West Virginia; West Virginia: Kentucky, Maryland, Ohio, Pennsylvania, Virginia; Wisconsin: Illinois, Indiana, Kentucky, Michigan. The District of Columbia is not an agreement at all: the Home Rule Act bars it from taxing any nonresident's wages, and Maryland and Virginia exempt DC residents who work there. Minnesota and Wisconsin have had no agreement since January 1, 2010.
    Do I pay taxes in both states if there's no reciprocity agreement?
    You file in both, but the same wages are not normally taxed twice in full. The work state taxes the wages you earned there on a nonresident return. Your home state taxes all of your income and gives you a credit for the tax paid to the work state, capped at what your home state would charge on that income, so you end up paying the higher of the two states' tax on those wages. Two exceptions: California paired with Arizona, Oregon or Virginia, where the credit is claimed on the nonresident return instead, and convenience-of-the-employer states, which can tax remote-work days your home state also taxes.
    What is the convenience of the employer rule?
    A sourcing rule used by New York, Delaware, Nebraska and Pennsylvania, and on a retaliatory basis by Connecticut and New Jersey. Arkansas repealed its version in Act 1019 of 2021, so lists that still include it are out of date. The rule treats days a nonresident works from home as days worked in the employer's state unless the remote work is for the employer's necessity rather than the employee's convenience. It is the main reason remote workers still face genuine double taxation despite the credit.
    Do I get a refund if my work state taxes more than my home state?
    No. The credit is capped at your home state's tax on that income. If you live in a low-tax state and work in a high-tax one, the excess is not refunded by either state. It is a real, permanent cost, and it is the figure most cross-border workers underestimate.
    I work remotely from a no-tax state for a company in a taxing state. Am I safe?
    Only if the employer's state does not apply a convenience-of-the-employer rule. A Florida resident working remotely for a New York employer can still owe New York tax on those days unless the home office meets New York's bona-fide employer office test — and Florida has no income tax, so there is no credit to relieve it.

    Tools for this

    Credit for Taxes Paid to Another State →State Tax Comparison Calculator →State Income Tax Calculator →Moving States Mid-Year Guide →

    Related Tools & Guides

    Federal Tax CalculatorState Tax CalculatorTax Bracket CalculatorTax Refund Schedule2025 Tax Brackets GuideStandard Deduction Guide

    Sources & References

    Primary references used for this content

    Wynne

    Comptroller of the Treasury of Maryland v. Wynne, 575 U.S. 542 (2015)

    Official U.S. Reports preliminary print; requires constitutionally adequate relief from discriminatory double taxation

    View on supremecourt.gov

    NY TSB-M-06(5)I

    New York State Department of Taxation and Finance — convenience of the employer

    The bona-fide employer office test applied to remote work days

    View on tax.ny.gov

    PA REV-419

    Pennsylvania Department of Revenue — Gross Compensation guide

    Six reciprocal states and the REV-419 employee nonwithholding certificate

    View on pa.gov

    MI Reciprocal

    Michigan Department of Treasury — RAB 2017-13, reciprocal agreements

    Michigan's six agreements and the city-tax carve-out

    View on michigan.gov

    FTB Sch. S

    California Schedule S — Other State Tax Credit instructions

    Reverse-credit states and the direction of the credit

    View on ftb.ca.gov

    OTR D-4A

    DC Office of Tax and Revenue — Withholding Tax Forms

    Current D-4A Certificate of Nonresidence listing and filing instruction

    View on otr.cfo.dc.gov

    ✓6 primary sources; links re-checked on a weekly rotation by the source watcher

    Disclaimer: This calculator provides estimates for educational purposes only. Not tax, legal, or financial advice. Results may vary based on your specific circumstances. Consult a qualified CPA or tax professional for personalized guidance.