Send the 44-016 exemption form to your employer. From an income perspective, I am trying to find out which state would be the best place to live. I know that tax rates in Delaware are generally lower and they do not have a tax on turnover, but I also know that Maryland does not have a reciprocal agreement on income tax with them and that I should file both Delaware income tax and a well-established return in Maryland. A. Yes, you must file a non-resident Delaware refund and declare the severance pay as Delaware income. Severance Pay is taxable on the basis of years of service in Delaware. If you have any questions about severance pay, please contact Eliott Johns at (302) -577-8262. After the sale of the business and the layoff (the new management has other plans), I have a fun shuttle service and a job in Wilmington, DE. I live in Baltimore, MD (also beautiful). So I did some research and read the 2014 Court of Justice ruling on double taxation of local taxes, which gave me hope that I would not be hurt. The reciprocity rule concerns the ability for workers to file two or more public tax returns – a tax return residing in the state where they live and non-resident tax returns in all other countries where they could work, so that they can recover all taxes that have been wrongly withheld. In practice, federal law prohibits two states from taxing the same income.

Virginia has reciprocity with the District of Columbia, Kentucky, Maryland, Pennsylvania and West Virginia. Send the VA-4 exception form to your employer in Virginia if you live in one of these states and work in Virginia. Use our chart to find out which states have mutual agreements. And, find out what form the employee must fill to keep you out of their home state: employees must require you to keep taxes for their country of origin and not for their state of work. Which states have reciprocity with Iowa? In fact, Iowa has only one state with a fiscal reality: Illinois. Reciprocal agreements states have something called tax between them that relieves this anger. If an employee works in Arizona but lives in one of the reciprocal states, they can submit the WeC, Employee Withholding Exemption Certificate form. Employees must also use this form to terminate their release from source (z.B. when they move to Arizona).

Employees who work in Kentucky and live in one of the reciprocal states can submit Form 42A809 to ask employers not to withhold income tax in Kentucky. The states of Wisconsin with reciprocal tax agreements are: the map below shows 17 orange states (including the District of Columbia) where non-resident workers living in reciprocal states do not have to pay taxes.