MD-VA Tax Reciprocity 2026

MD-VA reciprocity is active in 2026. Covers residents crossing the Potomac for work.

Quick answer: Yes, active reciprocity. MD residents working in VA file VA-4 to skip VA withholding. VA residents working in MD file MW507 to skip MD state withholding. Note: MD county piggyback tax still applies to MD residents.

How It Works Both Directions

ScenarioForm To FileResult
Live MD, work VAMW507 (to skip MD)No VA withholding. Pay MD tax only.
Live VA, work MDVA-4 (to skip VA)No MD withholding. Pay VA tax only.

Worked Example

James lives in Alexandria VA, works in Baltimore MD, earns $95,000. With reciprocity: files MW507 with MD employer. MD withholds $0 (state and county). VA withholds ~$5,150 (5.75%). He files only VA resident return. Without reciprocity he'd withhold to MD (state + Baltimore County 3.2%), file MD nonresident, then VA resident with credit — same tax, two returns.

Step-by-Step: Claim the Exemption

  1. Download the work-state exemption form (VA form VA-4 for MD-residents-working-in-VA; MD form MW507 for VA-residents-working-in-MD).
  2. Fill in name, SSN, home address (must be in the reciprocity state), and current date.
  3. Submit to HR/payroll at your employer.
  4. Verify on your next paystub that work-state tax withholding is $0.
  5. Update your home-state W-4 to make sure you withhold enough for full income tax.
  6. File only a resident return in your home state next April (unless you have non-wage work-state income).

OBBBA 2026 Note

OBBBA 2026 (One Big Beautiful Bill Act) raised the federal SALT cap to $40,000. This matters for reciprocity commuters who itemize: your full home-state income tax is now more likely to be fully deductible on federal Schedule A, making the state-level tax difference between your home and work state a real after-tax driver of commute value. Check each state rate: MD top rate 5.75% state + 2.25–3.2% county, VA top rate 5.75% (over $17K).

FAQ

Are MD-VA rates similar enough that reciprocity is just paperwork?

Yes. Both top out around 5.75% state-level. The real savings are avoiding a nonresident return, which typically costs $50–$150 in tax software upgrades or preparer fees.

Does MD-VA reciprocity cover local taxes?

Partial. MD residents working in VA: exempt from VA state tax only. VA residents working in MD: exempt from MD state AND county tax (since county is a piggyback). Philadelphia city wage tax analog does not exist in VA/MD.

What if I move from MD to VA mid-year?

File a part-year return in each state covering only the months you were a resident. Submit the relevant exemption form on your move date so future withholding routes correctly.

Is VA-4 the same form used to skip VA withholding for DC residents?

Yes. VA-4 is the universal VA nonresident exemption form, used by DC, KY, MD, PA, and WV residents claiming reciprocity exemption from VA withholding.

Can I claim reciprocity on supplemental wages (bonuses, stock)?

Yes. All W-2 wages from the work state are covered, including base pay, bonuses, commissions, and RSU compensation. Equity compensation is W-2 wages at vest, so reciprocity applies.

Model Your Take-Home

See exact post-reciprocity paycheck with MD or VA withholding.

Paycheck Calculator →
Other reciprocity pairs:
NJ-PA · VA-DC · MD-DC · MD-PA · PA-OH · PA-WV · Full matrix

Tax calculations are estimates for educational and informational purposes only. This site does not provide tax, legal, or financial advice. Tax laws change frequently. Always consult a qualified tax professional for advice specific to your situation. Data sourced from IRS publications and official state tax authority websites.

Affiliate Disclosure: Some links on this site are affiliate links. We may earn a commission at no additional cost to you.

Stay Updated

Get free tips and tools delivered to your inbox