What does "Opt for Reciprocity" mean?

Question

How does tax withholding work if I (as an employee) live in one state but work in another?

Answer

By default, your taxes are withheld based on the state where your employer's business is located. If you work in a different state than where the business operates, opting for reciprocity allows you to have taxes withheld based on your work state instead of your employer's state—if a reciprocal agreement exists between the two states. Opting for reciprocity can also resolve cases where a different tax withholding form is needed, such as a W-4. If you're unsure whether this applies to you, check with your employer or a tax professional.

To opt for reciprocity, navigate to My Account > Taxes & Payment > Update tax withholding details > Opt for reciprocity: