PA and IN do not share a border - this agreement mainly serves remote employees and cross-state transfers between the two manufacturing-heavy states.
| Scenario | Form To File | Result |
|---|---|---|
| Live PA, work IN | WH-47 (to skip IN) | No IN withholding. Pay PA tax only. |
| Live IN, work PA | REV-419 (to skip PA) | No PA withholding. Pay IN tax only. |
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: PA top rate 3.07% flat, IN top rate 2.95% flat + county (0.5-3%).
File IN form WH-47 (Certificate of Residence) with your Indiana employer. It stops Indiana state withholding AND Indiana county tax withholding, since Indiana extends reciprocity to its county income tax.
File PA form REV-419 (Employee’s Nonwithholding Application Certificate) with your PA employer. PA state withholding stops; you withhold Indiana tax instead and file only the IN IT-40.
No. PA local earned income tax (1-2%, or ~3% in Pittsburgh for residents) and the Philadelphia City Wage Tax are local taxes outside the agreement. IN residents physically working in Philadelphia still owe the nonresident wage tax.
File Indiana form IT-40RNR (Reciprocal Nonresident Return) for that year - it is a short return built exactly for this situation - to recover the IN state and county withholding in full.
Yes. All W-2 wages - base salary, bonuses, commissions, and equity compensation taxed at vest - are covered. Self-employment and 1099 income are NOT covered and follow source-state rules.
See exact post-reciprocity paycheck with PA or IN withholding.
Paycheck Calculator →Run the numbers for each state: Pennsylvania Income Tax Calculator · Indiana Income Tax Calculator
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.
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