New York Reciprocity Agreements: What You Need to Know

If you`re a resident of New York or considering a move to the state, you may have heard about “reciprocity agreements.” These agreements allow residents of one state to work in another state without having to pay income tax in both locations.

New York has reciprocity agreements with a handful of states: New Jersey, Connecticut, and Pennsylvania. If you live in one of these states and work in New York, you do not have to pay New York income tax.

However, it`s important to note that this only applies to people who live and work in one of the reciprocating states. If you live in Pennsylvania and work in New York for part of the year and in Pennsylvania for the rest, you`ll still have to file a New York state tax return.

Additionally, reciprocity agreements only apply to state income tax, not federal income tax. You`ll still have to pay federal income tax regardless of where you live and work.

It`s also worth noting that if you live in a non-reciprocating state and work in New York, you`ll have to pay New York state income tax. This can be a significant expense, especially if you work in New York City, which has its own separate income tax.

There are some exceptions and special circumstances to consider as well. For example, if you`re a member of the military stationed in New York but are a resident of a reciprocating state, you won`t have to pay New York state income tax on your military pay.

If you`re unsure about your tax situation or have questions about how to file your taxes if you live in one state and work in another, it`s always a good idea to consult with a tax professional. They can help you navigate the complex tax laws and ensure that you`re filing your returns correctly.

In summary, if you live in one of the reciprocating states and work in New York, you won`t have to pay New York state income tax. However, if you live in a non-reciprocating state or work in multiple states, your tax situation may be more complicated. Always consult with a tax professional to ensure that you`re filing your returns correctly and taking advantage of all available deductions and credits.