Only 16 states plus DC have income tax reciprocity agreements with each other, and every one only covers W-2 wages — not 1099 pay. If your home state and assignment state aren’t on that list, reciprocity doesn’t apply to you, and you’ll file a nonresident return in the assignment state no matter what a recruiter tells you.
Key takeaways
- Reciprocity agreements exist only between specific state pairs, mostly clustered in the Midwest and Mid-Atlantic — there is no reciprocity between, say, California and Texas, because neither taxes the other’s wage-earners differently in the first place, or in most other regions.
- Reciprocity applies to W-2 wages withheld by an employer. It does not apply to 1099 self-employment income, which is always taxed based on where the work is physically performed.
- To actually stop the assignment state from withholding, you have to file that state’s specific reciprocity exemption form with your agency — reciprocity is not automatic just because the agreement exists.
- When there is no reciprocity, you’re not double-taxed: you file a nonresident return in the work state and claim a credit on your home-state return for the tax you paid there.
What a state tax reciprocity agreement actually is
A reciprocity agreement is an arrangement between two specific states where each agrees not to tax the wages of the other state’s residents who commute or work there. Instead, you pay income tax only to your home state, even though your paycheck was earned across the state line. It’s a convenience for people who live in one state and work in a neighboring one — the exact situation a lot of travel nurses land in when their tax home and their assignment happen to be one state apart.
The agreement only covers W-2 wage income. If you work as a 1099 independent contractor, reciprocity doesn’t apply to you at all — self-employment income is sourced to wherever you actually perform the work, full stop.
Every state reciprocity agreement, by state
This list reflects the agreements in effect as of 2026. States not listed here have no reciprocity agreements with any other state — check directly with both states’ revenue departments before assuming a specific pair is covered, since a handful of agreements have been added or dropped over the years.
- District of Columbia ↔ Maryland, Virginia
- Illinois ↔ Indiana, Iowa, Kentucky, Michigan, Wisconsin
- Indiana ↔ Illinois, Kentucky, Michigan, Ohio, Pennsylvania, Wisconsin
- Iowa ↔ Illinois
- Kentucky ↔ Illinois, Indiana, Michigan, Ohio, Virginia, West Virginia, Wisconsin
- Maryland ↔ DC, 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 ↔ DC, Kentucky, Maryland, Pennsylvania, West Virginia
- West Virginia ↔ Kentucky, Maryland, Ohio, Pennsylvania, Virginia
- Wisconsin ↔ Illinois, Indiana, Kentucky, Michigan
Notice the pattern: every agreement sits inside the Midwest/Rust Belt cluster or the DC-Maryland-Virginia-Pennsylvania-West Virginia cluster. If your tax home is in New York, Florida, California, Texas, or almost anywhere on the West Coast or in the Southeast outside that pocket, there is no reciprocity agreement waiting for you — don’t assume one exists just because a neighboring state seems close by.
How to actually claim reciprocity on an assignment
Having an agreement on the books between two states doesn’t automatically stop withholding — you have to tell your agency’s payroll department. Each reciprocal state publishes its own exemption certificate for nonresident employees to file with their employer (separate from your federal W-4), stating that you’re a resident of the reciprocal home state and asking them to withhold zero income tax for that state.
If you don’t file it, the assignment state’s employer will withhold as if reciprocity didn’t exist, and you’ll have to file a nonresident return in that state solely to get a refund of tax that should never have been withheld in the first place — an unnecessary extra return. Ask your agency’s HR or payroll contact for the correct form by name for the specific state pair before your first paycheck.
What happens when there’s no reciprocity agreement
No reciprocity does not mean you get taxed twice on the same dollar. The standard mechanism: you file a nonresident return in the assignment state and pay tax there on the wages earned in that state, then claim a credit on your home-state resident return for some or all of the tax you paid to the other state. Most states with an income tax offer this credit; the details of how it’s calculated live inside your home state’s return instructions. For the mechanics of multi-state filing itself — including what happens when you work in more than two states in a year — see our full multi-state taxes guide.
One case reciprocity and credits both skip: assignment states with no income tax at all (Florida, Texas, Nevada, Washington, Wyoming, South Dakota, Alaska). There’s nothing to reciprocate and no credit to claim, because the assignment state never withheld anything — but your home state still taxes that income in full if your tax home is elsewhere. We cover that specific trap in Working in a No-Tax State but Your Tax Home Isn’t.
FAQ
Does reciprocity mean I only ever file one state return?
Usually, yes, for that specific assignment — you file only your home-state return and skip the assignment-state return entirely, as long as you filed the exemption certificate and had zero tax withheld there. If tax was withheld anyway, you still have to file a nonresident return in the assignment state to claim it back.
Do reciprocity agreements apply to 1099 travel nurses?
No. Reciprocity agreements govern employer withholding on W-2 wages between two specific states. 1099 income has no withholding relationship to reciprocate — it’s sourced to wherever you performed the work, and you’ll generally owe tax to that state directly regardless of where your tax home is.
What if I work three or four different states in one year?
Reciprocity is evaluated pair by pair — your home state and each assignment state independently. You could have reciprocity with one assignment state and owe a nonresident return plus credit in another, in the same tax year. Track each assignment’s state separately rather than assuming one rule covers the whole year.
Can an agency get the exemption paperwork wrong?
Yes — agency payroll teams handle nurses moving between dozens of states and don’t always catch a reciprocity exemption automatically. Confirm the paperwork was filed before your first paycheck, and check your first pay stub for the wrong state’s withholding line.
Reciprocity is only one piece of getting your multi-state tax math right. Run your next contract’s actual numbers — home state, assignment state, and whether reciprocity or a credit applies — through the Contract Analyzer to see your real effective hourly rate after every state and federal tax.