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. “Good business must always be conducted with a spirit of integrity and mutual respect. Arizona now joins countries such as Washington, Idaho and Montana, which have similar agreements with the Province of Alberta to protect the financial interests of both parties in both jurisdictions and encourage greater financial investment beyond our borders. ” – Mark Brnovich, Arizona, Has Reciprocity with a neighbor — California — as well as Indiana, Oregon and Virginia. WEC file form, source certificate, with your employer for an exemption from the deduction. New Jersey has historically had reciprocity with Pennsylvania, but Gov. Chris Christie announced the deal effective January 1, 2017. You should have filed a non-resident return to New Jersey from 2017 and paid taxes there if you work in the state. Fortunately, Christie reversed course when a tinge and a cry from local residents and politicians appeared. The reciprocity rule is that employees must file two or more public tax returns – a tax return resident in the state in which they live and non-resident returns in all other countries where they could work, so that they can recover all taxes that have been wrongly withheld. In practice, federal law prohibits two states from taxing the same income.
“Reciprocity is not only for bank credit, but it opens the door to greater security in all kinds of cross-border contracts, joint ventures, contract services, investments in technology, real estate and development, technology licenses and much more.” – Mike Patterson, Spencer Fane LLP Indiana has reciprocity with Kentucky, Michigan Ohio, Pennsylvania and Wisconsin. Submit the WH-47 exemption form to your employer in Indiana. Michigan has mutual agreements with Illinois, Indiana, Kentucky, Minnesota, Ohio and Wisconsin.