Live in Virginia, Work in Maryland: Which State Taxes Your Paycheck?
Answer
Virginia and Maryland have a reciprocity agreement, so only Virginia taxes you. Give your employer Form MW507 and Maryland stops withholding entirely. You then file one return — the Virginia resident return — and no Maryland nonresident return is required at all.
Last verified
A reciprocity agreement is a deal between two revenue departments about which of them withholds. Around thirty such agreements exist across sixteen jurisdictions, and Virginia and Maryland hold one — which is why this commute produces one return instead of two.
Maryland does not tax the wages of residents of the District of Columbia, Pennsylvania, Virginia or West Virginia who do not keep a place of abode in Maryland for 183 days or more. The employee claims the exemption on Form MW507.
The certificate goes to your employer's payroll department, not to Comptroller of Maryland, and it is not retroactive — filing it in June does not recover Maryland tax withheld in January. That money comes back only by filing a Maryland nonresident return for the year and claiming a refund.
Maryland also has a layer below the state one, and it is the layer that survives every agreement: Every Maryland county and Baltimore City levies its own income tax, collected on the state return. A reciprocity agreement exempts wages from the Maryland state tax only — it never reaches the county tax. Nonresidents who are not covered by an agreement pay a special nonresident rate in place of the county tax. Pennsylvania carries one further condition: a Pennsylvania resident exempt from the Maryland state tax remains liable for the Maryland local tax unless their own Pennsylvania jurisdiction imposes no earnings tax on Maryland residents.
What you file
Give your employer Form MW507 so Maryland stops withholding. This goes to the employer, not to Comptroller of Maryland — and it is not retroactive, so file it before the first paycheck of the year.
- 2Resident return · Virginia
File a Virginia resident return reporting all of your income, including the wages earned in Maryland.
The two states, side by side
| Virginia | Maryland | |
|---|---|---|
| Taxes wages | Yes — graduated | Yes — graduated |
| Reciprocity partners | 5 (Form VA-4) | 4 (Form MW507) |
| Convenience rule | No | No |
| Nonresident return | Form 763 | Form 505 with Form 505NR |
| Credit for other-state tax | Schedule OSC | Form 502CR |
| Nonresident safe harbour | None published | None published |
| Local income tax | No | Yes |
| Revenue department | Virginia Department of Taxation | Comptroller of Maryland |
| Last verified |
The other direction
Reversing the commute does not always reverse the answer. Living in Maryland and working in Virginia gives:Reciprocal agreement — file the exemption form.
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: Virginia → MarylandHome state only
- 1099 contractor: Virginia → MarylandHome state, plus the client state if you work there
- Moved mid-year: Virginia → MarylandTwo part-year returns
Other Virginia pairs
Questions people actually ask
I live in Virginia and work in Maryland. Which state takes the tax out of my paycheck?
Virginia and Maryland have a reciprocity agreement, so only Virginia taxes you. Give your employer Form MW507 and Maryland stops withholding entirely. You then file one return — the Virginia resident return — and no Maryland nonresident return is required at all.
Which state should my employer be withholding for?
Virginia. Your employer should withhold Virginia tax rather than Maryland tax on these wages, but only once you have given payroll Form MW507 — the exemption is not automatic and it does not apply retroactively. If a Maryland line is showing on your pay stub, raise it with payroll now rather than at filing time.
What if Maryland tax was already withheld from my pay?
File Form MW507 with your employer to stop it going forward, then recover what was already taken by filing a Maryland nonresident return for that year and claiming a refund of the full amount. Virginia will still expect its own tax on the same wages, so do not treat the refund as a windfall.
How current is this?
The Virginia and Maryland rules on this page were last checked against Virginia Department of Taxation and Comptroller of Maryland 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.
- Virginia Department of Taxation — individual income taxaccessed 2026-08-07
- Virginia — Form VA-4accessed 2026-08-07
- Virginia Tax — Reciprocityaccessed 2026-08-07
- Comptroller of Maryland — individual income taxaccessed 2026-08-07
- Maryland — Form MW507accessed 2026-08-07