Pennsylvania has agreements with Indiana, Maryland, New Jersey, Ohio, Virginia and West Virginia. Generally, one state will not tax a resident of the other state on income subject to withholdings.
If the taxpayer is a Pennsylvania resident working in one of these states, and their employer withheld the other state’s income tax, the taxpayer must file for a refund from that state. The taxpayer cannot claim a refund for taxes withheld to a reciprocal state on the resident return.
NOTE: If the taxpayer is a Pennsylvania resident working in a reciprocal-agreement state and the employer is not withholding PA tax, the taxpayer must make Pennsylvania estimated tax payments.
Pennsylvania Return:
Create the Pennsylvania Resident return. Complete all information as needed.
If the other state is Indiana:
- Add or Edit Indiana Nonresident Return
- Other Categories
- Taxpayer - Wages received in IL, KY, MI, OH, PA and/or WI
- Miscellaneous Forms
- Indiana Reciprocal return - (IT-40RNR) and answer the questions.
Please note that the taxpayer may still be subject to county tax on the income earned while a nonresident. According to Indiana Informational Bulletin #33, 'Indiana reciprocity agreements do not affect withholding requirements concerning the Indiana County Adjusted Gross Income Tax (CAGIT), County Economic Development Income Tax (CEDIT), or County Option Income Tax (COIT).'
To claim exempt from Indiana withholdings on future returns, complete form WH-47 and file it with the taxpayers employer.
If the other state is Maryland:
- Add or Edit Nonresident Maryland Return
- Income and Adjustments
- Wages, Salaries, Tips, etc.
- Adjustments to Wages - Enter as a negative amount
To claim exempt from future Maryland withholdings, complete form MW507 and file it with the taxpayers employer.
If the other state is New Jersey:
- Federal W-2 - remove New Jersey wages from W-2
- Add or Edit Nonresident New Jersey return
Pennsylvania residents employed in New Jersey who had New Jersey Income Tax withheld in error must enclose a signed Statement of New Jersey Nonresidency, which is available on the New Jersey website.
To claim exempt from future New Jersey withholdings, complete form NJ-165 and file it with the taxpayers employer.
If the other state is Ohio:
- Add the Ohio Non Resident Return
- Nonresidents who meet certain required criteria - Answer Yes to this question. Reciprocal states qualify.
If this question was answered No when adding the Ohio Nonresident Return:
- Edit Ohio Non Resident Return
- Select Form IT-NRS (affidavit of Non-Ohio Residency). Select Yes to complete the form. Complete the next two sections indicating taxpayer place of Domicile and place of Abode (both should be the resident state).
To claim exempt from future withholdings, complete form IT-4NR and file it with the taxpayers employer.
If the other state is Virginia
A Virginia return is not required if the taxpayers only source of VA income was from wages and salaries. Form 763-S is required to be completed to claim a refund for the taxes withheld. The form needs to be mailed to Virginia with a copy of the Pennsylvania Resident Return and copies of the W-2 (s) used to create the return. The mailing address is located on the form. Complete form VA-4 to claim exempt from future withholdings. File the form with the taxpayers employer.
If the other state is West Virginia:
- Add Nonresident West Virginia Return
- Are you a full -year resident of a Reciprocal State with West Virginia Income Only from wages, tips and salary? - Answer Yes and Select Pennsylvania from list of states
Select the taxpayers resident state and complete the section for Special Nonresident Income for Reciprocal States.
To claim exempt from future withholdings, complete form WV/IT-104 and file it with the taxpayers employer.
Note: The taxpayer may still be liable for county or city taxes in the state where the income was earned. Check with the state for more information.
Additional Information: