Are reciprocity agreements between states bi-directional or do you have to be a resident of a particular one of the two states to take advantage of them?

[Yume]

I've seen Arizona list several states as ones that they have agreements with, but those states don't seem to list Arizona as one that they have agreements with.  So do you have to be a resident of State Z making money in State X to take advantage of the agreement or can someone be a resident of State X and make money in State Z to take advantage of the agreement?

[Mike9241]

work in AZ live in CA - wages and other earned income only taxable in CA, file form WEC with AZ employer so only CA withholding is taken.  the reverse is apparently not true. work in CA live in AZ.  Arizona, as your resident state, gets to tax your world-wide income. California gets to tax your compensation because it was earned there.

[TomD8]

"Arizona, as your resident state, gets to tax your world-wide income. California gets to tax your compensation because it was earned there."

Correct, but you can take an "other state credit" on your non-resident CA return for the taxes paid to AZ on the income that is taxable by both states, so you won't be double-taxed.

CA and AZ are "reverse-credit" states, which means that the non-resident state grants the credit.  

[fanfare]

reciprocity is  a two-way street, by definition.

[rjs]

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@fanfare wrote:

reciprocity is  a two-way street, by definition.

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Arizona doesn't actually call it reciprocity or a reciprocal agreement. They call it a withholding exemption or withholding exception. But a lot of people call it a reciprocal agreement because it looks just like one side of a true reciprocal agreement.