New York State Reciprocal Agreements: What You Need to Know
New York State has signed reciprocal agreements with several other states, allowing taxpayers who earn income in one state and live in another to only pay taxes in their state of residency. This can be a great benefit for those who work in one state but live in another.
Currently, New York State has reciprocal agreements with the following states: Connecticut, New Jersey, Pennsylvania, and Vermont. Under these agreements, residents of one state who work in another state do not have to file a nonresident tax return in the state where they work. Instead, they only need to file a resident tax return in the state where they live.
For example, if you live in Connecticut but work in New York, you would only need to file a Connecticut resident tax return and not a New York nonresident tax return. This can simplify the tax filing process for those who work across state lines.
It’s important to note, however, that reciprocal agreements only apply to earned income. If you have income from investments or rental properties in another state, you may still be required to file a nonresident tax return in that state.
Additionally, if you live in New York State but work in a state that does not have a reciprocal agreement, you will need to file a nonresident tax return in the state where you work.
It’s also important to remember that each state’s tax laws and regulations are different, and it’s important to consult with a tax professional or accountant to determine your specific tax obligations.
In summary, if you live in one of the states with a reciprocal agreement with New York State and work across state lines, you may be able to simplify your tax filing process. However, it’s important to understand the specific tax laws and regulations in each state to ensure compliance.