Working or living in more than one state: how state taxes work
Last updated: July 30, 2026
Summary: If you live in one state and work in another — or you move or take an assignment across state lines — more than one state may be involved in your income taxes. This article explains the common terms (resident state, work state, reciprocity) so you know what to expect and what to update.
Many workers live in one state and physically work in another, or travel for assignments. When that happens, state income tax can get more involved than for someone who lives and works in the same place. Here is what to know.
Resident state vs. work state
Two states can matter for your income tax:
Resident state — the state where you legally live (your permanent home).
Work state — the state where you actually perform the work.
When these are the same, it's straightforward: one state's income tax rules apply. When they differ, both states may have an interest in your income, and your withholding may reflect the state where you work, the state where you live, or both — depending on those states' rules.
Reciprocity agreements
Some neighboring states have reciprocity agreements with each other. Under a reciprocity agreement, if you live in one state and work in a state it has an agreement with, you generally pay income tax only to your resident (home) state, not the work state.
Where reciprocity applies, you may need to file a specific form with your employer so that the work state's income tax is not withheld. Whether reciprocity applies to you depends entirely on the specific pair of states involved, so check with the tax agencies for both states.
States with no income tax
A handful of states have no state income tax. If either your home state or your work state is one of them, the picture changes — for example, you may only have withholding for the state that does levy an income tax. This is one reason your pay stub might show state tax for one state and not another.
What this means for your paycheck and filing
Withholding: Your state withholding is based on the state information tied to your assignment and your home address. If you work in more than one state during the year, you may see more than one state's tax reflected across your pay stubs.
Filing: You may need to file a return in more than one state — often a resident return in your home state and a nonresident return in the state where you worked. Many states offer a credit so the same income is not fully taxed twice, but the details vary by state.
When to tell us
Let us know when your situation changes so your withholding can be set up for the right state(s):
You move to a different state.
You start an assignment in a new state.
You begin splitting your work across states.
You can update your state withholding form the same way you update your W-4 — see "How do I fill out my US tax forms (W-4)?" If you're not sure what changed or which state applies, contact support@ascen.com and we can help make sure the right forms are in place.
Helpful references
Your state tax agency websites (search for "[state name] department of revenue") — the authoritative source for that state's residency, reciprocity, and filing rules.
This is general information, not individual tax advice. State tax rules vary widely and change over time, and no single state's rule applies everywhere. Ascen cannot give personalized tax advice. For your specific situation — including which states you must file in and whether reciprocity applies — please consult a qualified tax professional or the tax agencies for the states involved.