I reside in Indiana but work in Maryland. Do I pay taxes in both states? There is no reciprocity that I am familiar with between either state?

[Rachel_W]

You are correct, there is no reciprocity agreement between Maryland and Indiana.  Since you live in Indiana but work in Maryland, you will need to file a Resident Indiana return and a Non-Resident Maryland return.  You will report all of your income on your Indiana return, but will receive a credit for the taxes you paid to Maryland.

[xie186]

Does this mean that eventually this person only pays tax to one state? 

[NCperson]

@xie186 - correct - simplified explanation:  you fill out the non-residential state FIRST and whatever the tax liability is on that tax return becomes a credit in the residential state. that way you are not paying taxes on the same dollar in two states.

[Hal_Al]

Q. Does this mean that eventually this person only pays tax to one state? 

A.  No, not exactly.  What it means is: the person is not double taxed.  He pays the  same amount* of tax as if he lived and worked in the same state; he just splits the money between the  two states and has the hassle (and cost) of filing two state tax returns. 

*Sometimes the credit for the home state is not 100% of the tax paid to the work state, so there may be a small amount of double taxation. Living in IN and working in MD, would usually be one of those cases. 

[SweetieJean]

The original question is several years old, but I wonder how someone can be commuting from IN to MD.  That being said, it's possible that the Work state might consider the employee to be a state resident for tax purposes.