7shifts Payroll: Opt Into State Tax Reciprocity

If you live in one state and work in another, understanding state tax reciprocity can simplify your income tax process. This article explains what state tax reciprocity is and how to enable it within your 7shifts account.

What is State Tax Reciprocity?

State tax reciprocity is an agreement between two states that allows you to pay income taxes only to your home state (the state where you live), even if you work in a different state. Without a reciprocity agreement, you might have to file and pay taxes in both states.

Why Does This Matter to You?

• Simpler Tax Filing: Reciprocity can save you time and hassle when filing your taxes. You won't have to file multiple state tax returns.
• Avoid Double Taxation: It prevents you from being taxed twice on the same income.

Enabling State Tax Reciprocity in 7shifts 

During Onboarding:

• If your work and home states have a reciprocity agreement, you'll see the option to opt-in during your initial 7shifts onboarding process.
• This option will appear within the onboarding forms provided by your employer.
• If you missed it during onboarding, please follow the steps in post-onboarding.

Post-Onboarding:

1. Log in to the 7shifts web app (this feature is not available on the mobile app).
2. Navigate to Settings > My Account.
3. Select the Taxes and Payment tab and click 'Update Tax Withholdings.'
4. Enable the 'Opt into state reciprocity' option.
5. Important: After opting in, your employer may require you to complete a separate state withholding form.

Important Things to Know:

• Not All States Have Reciprocity: Reciprocity agreements are not universal. It's crucial to check if your work and home states have an agreement. Refer to the chart below for states with reciprocity agreements.  
• Where to Find Information: You can find detailed information about state tax reciprocity agreements on your state's Department of Revenue website or by searching online for "[Your Home State] [Your Work State] tax reciprocity."

Example:

Let's say you live in New Jersey but work in Pennsylvania. If these states have a reciprocity agreement, you'll only pay income tax to New Jersey. You would need to provide your employer in Pennsylvania with the necessary form.

What You Should Do:

1. Check for Reciprocity: See if your home and work states have a reciprocity agreement.
2. Enable the option for state tax reciprocity in 7shifts.
3. Review Your Paycheck: Ensure your paycheck reflects the correct state tax withholding.

By understanding state tax reciprocity, you can ensure your taxes are handled correctly and simplify your tax filing process.

States that Recognize Reciprocity 

*Arizona does not have true reciprocity but has a similar agreement with 4 states.