Which state do you pay income tax in?

The state where you physically work taxes the income, and your home state taxes it again but gives you a credit for what you already paid. You end up paying the higher of the two rates overall, not both. Where the two states have a reciprocity agreement, the work state steps aside entirely and you file only at home.

This matters most to commuters across metro areas that straddle a border, to anyone who moved without telling payroll, and to remote workers whose employer is registered somewhere they have never been. The paycheck calculator models one state at a time, so run it for your work state and then for your home state to see the gap you are dealing with.

State reciprocity agreements

Live in the state on the left and work in one on the right, and only your home state taxes you. Give your employer that state's non-residency certificate so they withhold correctly from the start.

State income tax reciprocity agreements
If you live in	You are taxed only at home when working in
District of Columbia	Maryland, Virginia
Illinois	Iowa, Kentucky, Michigan, Wisconsin
Indiana	Kentucky, Michigan, Ohio, Pennsylvania, Wisconsin
Iowa	Illinois
Kentucky	Illinois, Indiana, Michigan, Ohio, Virginia, West Virginia, Wisconsin
Maryland	District of Columbia, Pennsylvania, Virginia, West Virginia
Michigan	Illinois, Indiana, Kentucky, Minnesota, Ohio, Wisconsin
Minnesota	Michigan, North Dakota
Montana	North Dakota
New Jersey	Pennsylvania
North Dakota	Minnesota, Montana
Ohio	Indiana, Kentucky, Michigan, Pennsylvania, West Virginia
Pennsylvania	Indiana, Maryland, New Jersey, Ohio, Virginia, West Virginia
Virginia	District of Columbia, Kentucky, Maryland, Pennsylvania, West Virginia
West Virginia	Kentucky, Maryland, Ohio, Pennsylvania, Virginia
Wisconsin	Illinois, Indiana, Kentucky, Michigan

Agreements are set state by state and either side can end one. Confirm yours with both states' revenue departments before relying on it.

Frequently asked questions

If I live in one state and work in another, which state do I pay?

Usually both, but not twice on the same money. The state where you physically work taxes the income you earn there, so you file a non-resident return. Your home state taxes your worldwide income, so you file a resident return too, and it gives you a credit for the tax you already paid to the work state. The practical result is that you pay the higher of the two rates in total, not the sum of them.

What is a state reciprocity agreement?

A deal between two states saying that residents of one who work in the other are taxed only by their home state. Where one exists you give your employer a non-residency certificate, they withhold for your home state, and you skip the non-resident return entirely. Most agreements are between neighbouring states with heavy commuting between them.

Which state taxes me if I work remotely?

Generally the state where you physically sit while working, not where your employer is based. The exception is the so-called convenience of the employer rule, used by a handful of states including New York, which can tax a remote worker of an in-state employer as though they worked in-state unless the remote arrangement is for the employer's necessity rather than the employee's convenience. If you moved states and kept the same job, tell your payroll department: withholding follows your work location, and fixing it retroactively is far harder than changing it now.

What if I moved states partway through the year?

You file a part-year resident return in each state, splitting the income by when you earned it. Keep a record of the date you established the new residence, because that date, not your moving-truck date or your driving licence, is what each state will ask about.

Do the nine no-income-tax states change this?

Yes, in your favour when you live there and against you when you only work there. Live in Texas and work in Texas and no state tax arises. Live in a taxing state but commute into a no-tax state and your home state still taxes you, with no credit to claim because you paid nothing to the work state. Live in a no-tax state and commute into a taxing one and you pay that state as a non-resident with no home-state return to offset it.

Compare any two states side by side from the state index, which ranks all 51 by take-home pay on the same salary. 2026 federal rates apply wherever you live.