Reviewed and updated October 16, 2026
Begin with where you actually reside
A DC resident who earns employee wages in Maryland or Virginia may qualify for reciprocal treatment, generally leaving those wages taxable to the home jurisdiction rather than the work state. Maryland does have reciprocal wage treatment with DC. Confirm that your own residency and income qualify before claiming an exemption.
Confirm domicile and statutory-residency facts. Maintaining a home or spending substantial time in another jurisdiction can change the analysis. A mailing address, driver’s license or payroll setting alone is not conclusive.
Fix withholding with the correct employer form
An eligible DC resident working in Maryland generally uses Maryland’s MW507 to claim the applicable nonresident exemption. Virginia uses Form VA-4 for the applicable exemption. Follow the current instructions and ask payroll to confirm how DC withholding will be handled.
If the employer already withheld tax for the wrong state, you may need a nonresident refund return there while still reporting the wages to DC. Withholding paid somewhere else does not automatically satisfy the correct home-jurisdiction liability.
Keep nonwage income separate
Reciprocity is not a blanket exemption for rental income, business profits or every payment earned across a border. DC unincorporated business franchise tax is specifically outside the individual wage-reciprocity analysis. Remote work, a midyear move and multiple residences also call for a closer review.
Bring W-2s, prior returns, dates of moves, work-location information and any state notices to your appointment. Have the preparer reconcile actual liability with withholding before seeking a credit or refund; otherwise, the same wages can be handled incorrectly in more than one return.
Official sources
This guide provides general information. The rules depend on the tax year, jurisdiction and your circumstances. Ask our team which filing or planning steps apply to you.
