Tax guide

Travel Nurse State Tax Reciprocity Guide 2026: Avoid Double Taxation

Working across state lines can trigger state income tax in multiple states. Tax reciprocity agreements help you avoid double taxation. This guide explains which states have reciprocity and how it works.

What Is State Tax Reciprocity?

Tax reciprocity is an agreement between two states that allows residents of one state to work in the other state without paying income tax to the assignment state. Instead, you pay tax only to your home state.

Example: If you live in Illinois and work in Kentucky, and they have reciprocity, you pay Illinois state tax only—not Kentucky tax.

States with Tax Reciprocity (2026)

The following states have reciprocity agreements with other states:

Illinois

Reciprocity with: Iowa, Kentucky, Michigan, Wisconsin

If you're an Illinois resident working in these states, you pay Illinois tax only.

Indiana

Reciprocity with: Kentucky, Michigan, Ohio, Pennsylvania, Wisconsin

Kentucky

Reciprocity with: Illinois, Indiana, Michigan, Ohio, Virginia, West Virginia, Wisconsin

Maryland

Reciprocity with: District of Columbia, Pennsylvania, Virginia, West Virginia

Michigan

Reciprocity with: Illinois, Indiana, Kentucky, Ohio, Wisconsin

Minnesota

Reciprocity with: North Dakota, Michigan

Montana

Reciprocity with: North Dakota

New Jersey

Reciprocity with: Pennsylvania

North Dakota

Reciprocity with: Minnesota, Montana

Ohio

Reciprocity with: Indiana, Kentucky, Michigan, Pennsylvania, West Virginia

Pennsylvania

Reciprocity with: Indiana, Maryland, New Jersey, Ohio, Virginia, West Virginia

Virginia

Reciprocity with: Kentucky, Maryland, Pennsylvania, West Virginia

West Virginia

Reciprocity with: Kentucky, Maryland, Ohio, Pennsylvania, Virginia

Wisconsin

Reciprocity with: Illinois, Indiana, Kentucky, Michigan

How Reciprocity Works

To take advantage of reciprocity:

1. File a reciprocity form with your employer in the assignment state
2. Pay tax only to your home state (where you maintain permanent residence)
3. File state tax return only in your home state

States Without Reciprocity

If your home state and assignment state don't have reciprocity, you may need to:

• Pay state tax to the assignment state (where you earn income)
• File state tax returns in both states
• Claim a credit in your home state for taxes paid to the assignment state (to avoid double taxation)

Example: If you live in Texas (no state income tax) and work in California, you'll pay California state tax only. If you live in California and work in Texas, you'll pay California tax (your home state).

No Income Tax States

These states have no state income tax, so reciprocity doesn't apply:

• Alaska, Florida, Nevada, New Hampshire, South Dakota, Tennessee, Texas, Washington, Wyoming

If you're a resident of one of these states, you don't pay state income tax regardless of where you work (unless the assignment state requires it).

How to Claim Reciprocity

Steps to claim reciprocity:

1. Check if reciprocity exists: Verify your home state and assignment state have an agreement
2. Complete reciprocity form: Fill out the form provided by your employer or state tax agency
3. Submit before starting work: File the form with your employer before your first paycheck
4. File state tax return: File only in your home state at tax time

Common Reciprocity Mistakes

• ❌ Not filing reciprocity form: Assignment state will withhold taxes
• ❌ Filing in wrong state: Can trigger audits and penalties
• ❌ Assuming reciprocity exists: Always verify before starting work
• ❌ Not keeping records: Keep reciprocity forms and tax returns for 7 years

Resources

• Pay Calculator with State Tax Calculation
• Tax Deductions Guide
• Stipend Rules Guide

Final Takeaway

Tax reciprocity can save you hundreds or thousands of dollars in state taxes:

1. Check if your home state and assignment state have reciprocity
2. File the reciprocity form before starting work
3. File state tax return only in your home state
4. Keep all documentation for 7 years
5. Consult a tax professional if unsure