TomD8
Level 15

State tax filing

In a reciprocal situation, W2 income is not taxed by the non-resident state.  Thus there is no "other state credit" to be taken.  If taxes were mistakenly withheld by the non-resident reciprocal state, the correct procedure is for the taxpayer to file a non-resident tax return with that state, allocating zero income to that state.  This will result in a full refund of the incorrectly withheld taxes.

 

In reciprocity situations, W2 income from the non-resident state is taxable only by the resident state.

 

 

**Answers are correct to the best of my ability but do not constitute tax or legal advice.