You just need to spend a little more time preparing several government returns and you have to wait for a refund for taxes that will be unnecessarily withheld from your paychecks. Reciprocity agreements mean that two states allow their residents to pay taxes only where they live, rather than where they work. One way or another, the end result is that the worker is taxed only in the state where he lives. Workers who work in D.C. but do not reside there do not have to be withheld from .C income tax. What for? On .C. has a tax recttivity agreement with each state. Indiana is mutualist with Kentucky, Michigan, Ohio, Pennsylvania and Wisconsin. Submit the EXCEPTION FORM WH-47 to your Indiana employer. New Jersey has had reciprocity with Pennsylvania in the past, but Gov. Chris Christie announced the deal with effect from Jan.
1, 2017. .