Re: Live in Northern Virginia. Company is in MD. What state income tax gets withheld?
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Date: December 21, 2014 06:51PM
The general answer is that you file a resident return in the state where you live and a non-resident return in the state where you work. The states divide your state tax withholdings between them and refund any overage collected.
Things are different in this area however. All of the District, VA, and MD have reciprocal tax agreements that include each other, meaning that if all your work is in one of those three places, you pay state tax ONLY where you live. You may need to file an exemption form when you first start in an out-of-state position or your new employer may automatically do that for you.
Reciprocal agreements exist in many other states and areas as well, but far from all.