Reciprocal Contract Agreement For Pa
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FAQ
State reciprocity agreements are pacts between two or more states that allow residents to only pay income tax on where they live versus where they work.
That's because, due to reciprocity, the wages you earned in DC are - for tax purposes - considered PA income. DC has reciprocity with every state. If you work in DC and are a resident of any other state, you do not have to pay DC income tax on your wages.
For example, let's say you live in New Jersey and work in Pennsylvania?two states with a reciprocal agreement. You can ask your employer to stop withholding Pennsylvania taxes. If your employer stops withholding Pennsylvania taxes, you would only have to file a New Jersey return. The reverse would also be true.
For states with reciprocity agreements, workers only pay taxes in the state where they live, not the state where they perform the work. As an example, a person who lives in Arizona but works in California would not have to pay state taxes in California, because the two states have a tax reciprocity agreement.
The following states have reciprocity agreements with Pennsylvania: Indiana, Maryland, New Jersey, Ohio, Virginia, West Virginia.