Administrative Code

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Virginia Administrative Code
Title 23. Taxation
Agency 10. Department of Taxation
Chapter 140. Income Tax Withholding
4/18/2024

23VAC10-140-230. Certain nonresidents; reciprocity with other states.

A. Certain nonresidents. Any employee who lives in Kentucky, Maryland, West Virginia, or the District of Columbia, and commutes each workday from one of the above named jurisdictions to his place of employment in Virginia and derives wages for service performed in Virginia for an employer within the geographical limits of Virginia, is required to file with his Virginia employer a Certificate of Nonresidence in the Commonwealth of Virginia, Form VA-3. The Virginia employer, upon receipt of such properly executed certificate from such an individual, will not withhold any Virginia income tax from such employee's wages.

If a nonresident who has filed such certificate subsequently moves to Virginia at any time during the calendar year, or otherwise loses his status as a commuter on a daily basis from one of the above named jurisdictions to his place of employment in Virginia, he must notify his Virginia employer of such fact within 10 days after the change of status and, in such case, the Virginia employer is required to withhold the full amount of Virginia income tax from the wages of such employee beginning with the first wages paid to such employee after the employer has been notified of the change of status of such employee.

B. Pennsylvania agreement. Under an agreement made pursuant to § 58.1-342 B of the Code of Virginia, Virginia residents are not required to pay income tax or file a return with, nor be subject to withholding on compensation earned from sources in, Pennsylvania. Pennsylvania residents earning wages in Virginia will be similarly exempted from income tax filing, payment, and withholding requirements imposed by Virginia. Nonresidents must file a certificate of nonresidence with their employer in order to relieve them of their tax liability to the state in which they are employed.

The agreement eliminates the previous need to file two returns when a taxpayer resides in one state and works in the other. Now such individuals need only file a tax return with their state of residence. Under the terms of the agreement, Pennsylvania employers not otherwise required to withhold by law will be encouraged to withhold and remit Virginia tax from wages paid to Virginia residents. Virginia employers are likewise encouraged to withhold and remit Pennsylvania tax from wages paid to residents of that state.

The agreement applies only to earned income. It does not apply to individuals who reside in both states for a portion of the year. Such individuals will continue to be liable for tax to each state on income received while residing in the state.

Statutory Authority

§§ 58.1-203 and 58.1-482 of the Code of Virginia.

Historical Notes

Derived from VR630-6-482, eff. January 1, 1985.

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