Live in South Dakota, Work in Virginia: Which State Taxes Your Paycheck?
Answer
Only Virginia taxes you. Virginia withholds from wages earned inside the state and you file a Virginia nonresident return. South Dakota levies no personal income tax on wages, so there is no resident return on the other side — and no credit, because there is no South Dakota tax to offset.
Last verified
Living in a state with no income tax removes the resident return, but it does not shelter income you earn somewhere else. Virginia taxes what is earned inside Virginia, whoever earns it, and a nonresident return is how that gets settled.
What you file
- 1Nonresident return · VirginiaForm 763
File a Virginia nonresident return for the wages you earned in Virginia. South Dakota has no wage income tax, so there is no second return and no credit to claim.
The two states, side by side
| South Dakota | Virginia | |
|---|---|---|
| Taxes wages | No | Yes — graduated |
| Reciprocity partners | None | 5 (Form VA-4) |
| Convenience rule | No | No |
| Nonresident return | Not applicable | Form 763 |
| Credit for other-state tax | No income tax | Schedule OSC |
| Nonresident safe harbour | Not applicable | None published |
| Local income tax | No | No |
| Revenue department | South Dakota Department of Revenue | Virginia Department of Taxation |
| Last verified |
The other direction
Reversing the commute does not always reverse the answer. Living in Virginia and working in South Dakota gives:Home state only.
Same two states, different situation
The withholding answer turns on how you are paid and where the work happens, not only on which two states are involved.
- Remote worker: South Dakota → VirginiaNo state income tax on your wages
- 1099 contractor: South Dakota → VirginiaClient state only, if you work there
- Moved mid-year: South Dakota → VirginiaOne part-year return — the state you moved to
Other South Dakota pairs
Questions people actually ask
I live in South Dakota and work in Virginia. Which state takes the tax out of my paycheck?
Only Virginia taxes you. Virginia withholds from wages earned inside the state and you file a Virginia nonresident return. South Dakota levies no personal income tax on wages, so there is no resident return on the other side — and no credit, because there is no South Dakota tax to offset.
Which state should my employer be withholding for?
Virginia. The wages are sourced to Virginia, so Virginia withholding is correct and there is no South Dakota withholding to set up, because South Dakota levies no income tax on wages.
How current is this?
The South Dakota and Virginia rules on this page were last checked against South Dakota Department of Revenue and Virginia Department of Taxation on 2026-08-07. We re-check the full grid every December after state legislative sessions close, and re-check the convenience-of-the-employer states quarterly because that is where the rules move fastest.
Sources
Every fact above comes from the revenue department that publishes the rule. We do not cite secondary summaries, and we do not restate a figure we could not find at source.
- South Dakota Department of Revenue — individual income taxaccessed 2026-08-07
- Virginia Department of Taxation — individual income taxaccessed 2026-08-07
- Virginia — Form VA-4accessed 2026-08-07
- Virginia Tax — Reciprocityaccessed 2026-08-07