Work in Pennsylvania, Live in Ohio: How Taxes Work

Reciprocity Basics

Do Pennsylvania and Ohio Have a Tax Reciprocity Agreement?

Yes. Pennsylvania has reciprocal agreements with Indiana, Maryland, New Jersey, Ohio, Virginia and West Virginia, and under them one state will not tax a resident of the other state on compensation subject to employer withholding. As an Ohio resident working in Pennsylvania, your W-2 wages are exempt from Pennsylvania personal income tax and are taxed by Ohio on your resident IT 1040. Ohio has reciprocal agreements with its five bordering states: Indiana, Kentucky, Michigan, Pennsylvania and West Virginia.

The agreement covers compensation only. It does not apply to miscellaneous and non-employee compensation, and it does not cover compensation paid to Ohio-resident shareholder-employees who work in Pennsylvania and have a 20 percent or greater interest in a PA S corporation. It also does not reach Pennsylvania's local taxes on earned income, which are covered below.

Filing Returns

Which Returns Do I File as an Ohio Resident Working in Pennsylvania?

Report all wages on your Ohio IT 1040. For taxable years beginning in 2026, Ohio's tax on nonbusiness income above $26,050 is $332 plus 2.75 percent of the amount above $26,050, figured after an exemption for you, your spouse and each dependent; if the balance is $26,050 or less, no tax is imposed on it. No PA-40 is needed when your only Pennsylvania income is wages covered by reciprocity and no Pennsylvania tax was withheld.

If Pennsylvania tax was withheld anyway, file a PA-40 to get it back (see the last section). Ohio's 2025 IT 1040 is due April 15, 2026, and the PA-40 must be filed before midnight on April 15, 2026. Ohio has no extension request form but honors the IRS extension. Pennsylvania grants the same extension as your approved federal extension if you do not owe Pennsylvania tax.

Pennsylvania's annual local earned income tax return goes to the tax collector for every district where you lived during the year, so it is a return for Pennsylvania residents. As an Ohio resident, your Pennsylvania local tax is the nonresident earned income tax and Local Services Tax that your employer withholds at the worksite.

Employer Waiver

How Do I Stop Pennsylvania Withholding With Form REV-419?

Give your Pennsylvania employer Form REV-419, Employee's Nonwithholding Application Certificate. In Section II, check reason (b), 'I declare I am a resident of the reciprocal state checked below', and check OHIO. By signing, you claim an exemption from Pennsylvania personal income tax withholding and authorize your employer to withhold income tax for your resident state instead.

An employer that agrees not to withhold PA tax because you live in a reciprocal state must withhold the other state's tax, so your employer withholds Ohio income tax. The employer keeps REV-419 in its records and must also submit a copy to the Pennsylvania Department of Revenue for an exemption based on residence in a reciprocal state. You must revoke the certificate within 10 days from the day you anticipate you will incur Pennsylvania personal income tax, for example after a move to Pennsylvania, by notifying your employer in writing.

If Ohio tax is not fully withheld and your expected Ohio tax, less Ohio withholding, is more than $500, Ohio expects quarterly estimated payments on Form IT 1040ES.

PA Local Earned Income Tax

Do I Still Owe Pennsylvania Local Earned Income Tax?

Yes. Reciprocity covers Pennsylvania state personal income tax only. Employers with worksites in Pennsylvania are required to withhold and remit the local Earned Income Tax (EIT) and Local Services Tax (LST) for employees working there, and that includes employees who live in another state.

For an employee who lives out of state, Pennsylvania's Department of Community and Economic Development tells employers to use resident code 880000 with a total resident EIT rate of 0 percent. The employee still owes the work location's nonresident EIT rate and the LST of the Pennsylvania worksite municipality. These local taxes are levied under the Local Tax Enabling Act; Act 32 of 2008 changed how EIT is collected and distributed. School districts may not levy EIT on nonresidents, so nonresident EIT is generally limited to 1 percent, although municipalities declared distressed may be able to go above that limit.

The total LST a person pays in a calendar year remains limited to $52, however many places they work in, and a municipality with an LST above $10 must exempt people whose earned income there is less than $12,000. Ohio gives no state credit for Pennsylvania local tax, because for Ohio's resident credit a 'state' means only the 50 U.S. states and does not include any city. A taxing Ohio city where you live may give a credit instead (see below).

Philadelphia Wage Tax

What if I Work in Philadelphia? Is the City Wage Tax Covered?

No. Philadelphia's Wage Tax is a city tax outside the state agreement, and employees working in Philadelphia are covered under the Sterling Act rather than the Act 32 system used elsewhere in Pennsylvania. If your job is in Philadelphia, your employer withholds the nonresident Wage Tax: 3.425 percent from July 1, 2026, after 3.43 percent from July 1, 2025.

REV-419 does not change the Wage Tax. Nonresidents can ask Philadelphia for a refund of Wage Tax for work performed outside the city, but only for days the employer required them to work outside Philadelphia: the city uses a 'requirement of employment' test, and someone who works remotely for their own convenience is not exempt, even with the employer's authorization. Applicants must submit signed documentation from their employer and the city's date and location worksheet.

Worked Example: Ohio Resident Earning $50,000 at a Pennsylvania Job

Single filer with wages only. Ohio tax uses the 2026 schedule in R.C. 5747.02 ($332 plus 2.75% of the amount above $26,050) and the 2025 Ohio exemption of $2,150 for income of $40,001 to $80,000, because the 2026 exemption was not yet published. PA local tax is illustrative: the nonresident EIT and LST depend on the worksite municipality. Other adjustments and credits are ignored. Not tax advice.

Remote Work

What if I Work Remotely From Ohio for a Pennsylvania Employer?

For Pennsylvania state tax, remote days change nothing: reciprocity already exempts your wages, and Ohio taxes them as a resident either way.

For local tax, your employer withholds Pennsylvania EIT and LST based on the PA worksite municipality. If part of your work is done from home in Ohio, keep a dated log of where you worked and ask the tax collector for your worksite whether nonresident EIT withheld for those days can be refunded. In Philadelphia, only days your employer required you to work outside the city qualify for a Wage Tax refund.

Ohio Side City Tax

Do Ohio City Income Taxes Apply to My Pennsylvania Wages?

Possibly, depending on where you live in Ohio. An Ohio municipal income tax is levied on the income of every person residing in or earning income in the municipality, so a taxing city where you live can tax your Pennsylvania wages. Ohio school district income tax is also based on residence and is filed on the SD 100 if you live in a taxing school district.

A credit for the Pennsylvania local tax depends on your city. Ohio law lets a city grant residents a credit for all or part of the tax paid to another municipality, in Ohio or elsewhere, but does not require it. CCA, for example, gives local taxes paid outside Ohio the same credit your resident municipality allows for tax paid inside Ohio, and its rate table shows credits from 100 percent in Cleveland to 0 percent in Elida, with a credit limit of 0.50 percent in Burton. With Pennsylvania's nonresident EIT generally at 1 percent or less and Cleveland's rate at 2.5 percent, a Cleveland resident still owes the city the difference. Check your city's credit rules with its tax office, CCA or RITA.

Withholding Errors

What if My Employer Withheld Pennsylvania Tax by Mistake?

If Pennsylvania personal income tax was withheld even though you gave your employer REV-419, you can request a refund on a PA-40. Report zero taxable compensation on line 1a and the PA tax withheld on line 13, and include a copy of the resident return you filed with Ohio (without its supporting forms and schedules) and a statement explaining that you are a resident of a reciprocal state.

Ohio gives no credit for this Pennsylvania tax: its resident credit instructions say not to enter wages earned in Pennsylvania while you were an Ohio resident, because those amounts are not taxed by Pennsylvania under the agreement. Recover it from Pennsylvania. A typical cause is a payroll setup that never applied REV-419, so check your first pay stub each January and, if Pennsylvania state tax appears, give payroll the form again in writing.