Payroll Taxes

State Income Tax Reciprocal Agreements

Reciprocal payroll tax agreements between states eliminate the need for filing and paying income taxes in multiple states. Here's a complete list of interstate reciprocal tax agreements.

Wondering whether your state has reciprocal payroll tax agreements with a neighboring state?

In other articles on our resource site for entrepreneurs, we explained what reciprocal state income tax agreements are and how small business owners need to withhold when reciprocal tax agreements exist.

Here we explain what states have reciprocal agreements in place. Find your state below.

Reciprocal State Tax Agreements

• District of Columbia - Washington D.C. has reciprocal income tax agreements with every state. Non-residents who work at a DC business can claim exemption from withholding for the DC income tax.
• Illinois - Illinois has reciprocal income tax agreements with Iowa, Kentucky, Michigan and Wisconsin.
• Indiana - Indiana has reciprocal payroll tax agreements with Kentucky, Michigan, Ohio, Pennsylvania and Wisconsin.
• Iowa - Iowa has a reciprocal income tax agreement with Illinois.
• Kentucky - Kentucky has reciprocal income tax agreements with Illinois, Indiana, Michigan, Ohio, West Virginia, Wisconsin and Virginia.
• Maryland - Maryland has reciprocal state tax agreements with the District of Columbia, Pennsylvania, Virginia and West Virginia.
• Michigan - Michigan has reciprocal income tax agreements with Illinois, Indiana, Kentucky, Minnesota, Ohio and Wisconsin.
• Minnesota - Minnesota has reciprocal income tax agreements with Michigan, North Dakota and Wisconsin.
• Montana - Montana has a reciprocal income tax agreement with North Dakota.
• New Jersey - New Jersey has a reciprocal income tax agreement with Pennsylvania.
• North Dakota - North Dakota has reciprocal income tax agreements with Minnesota and Montana.
• Ohio - Ohio has reciprocal income tax agreements with Indiana, Kentucky, Michigan, Pennsylvania and West Virginia.
• Pennsylvania - Pennsylvania has reciprocal income tax agreements with Indiana, Maryland, New Jersey, Ohio, Virginia and West Virginia.
• Virginia - Virginia has reciprocal tax agreements with Kentucky, Maryland, District of Columbia, Pennsylvania and West Virginia.
• West Virginia - West Virginia has reciprocal income tax agreements with Kentucky, Maryland, Ohio, Pennsylvania, Virginia.
• Wisconsin - Wisconsin has reciprocal state income tax agreements with Illinois, Indiana, Kentucky, Michigan and Minnesota.

If your state is not on the list above, then your state does not have reciprocal payroll tax arrangements with any other state.

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