Virginia has a reciprocal agreement with District of Columbia, Kentucky, Maryland, Pennsylvania and West Virginia if the only source of income is from wages and salaries.
If the taxpayers employer withheld tax or the taxpayer paid tax to these states on their compensation, they must claim a refund from that state. The Taxpayer may not claim a credit on Schedule CR for that tax withheld by the employer. File the appropriate forms with that state to receive a refund of tax withheld in error.
If the other state is Washington DC:
- Add or Edit Nonresident DC return
- Commuter/Domiciliary State Exemption - Enter the state abbreviation for your state of residency.
To claim exempt from future withholdings, file form D-4A with your employer.
If the other state is Kentucky:
- Add or Edit Kentucky Nonresident Return
- Were you a Full-year Resident of a Reciprocal State? - Answer yes and select state from list
- Was your Only KY income for 2023 from Salaries or Wages Earned While a Resident of a Reciprocal State? - Answer yes
To claim exempt from Kentucky withholdings in the future, file form 42A809 with the 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 Pennsylvania:
- Add or Edit Nonresident Pennsylvania return
- Pennsylvania Taxable Income
- Gross Pennsylvania Compensation
- Calculated Wages
- Complete Schedule NHR
Pennsylvania requires proof that taxes were paid to the other state. The return must be printed and mailed along with a copy of the Indiana state return, the W-2(s) with the Pennsylvania income and a statement explaining you are a resident of a reciprocal state.
To claim exempt from future PA withholdings, file form REV-419 with the 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.
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.
Note: On its resident tax return, Virginia does not provide a credit for double-taxed income in Arizona, California, the District of Columbia, and Oregon. A Virginia resident filing a nonresident tax return with one of those states or DC must claim a credit for taxes paid to Virginia on the nonresident return.
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