Living in Pennsylvania, working in Indiana
Reciprocal agreement · tax year 2026
You pay Pennsylvania
$2,149
on a seventy-thousand wage
Indiana would want
$2,036
The agreement is worth
$0
in money — the gain is one return, not two
File this
WH-47
with your employer
What the agreement does for you
- Do not expect a check from this one. Between Pennsylvania and Indiana, home charges $2,149 on a seventy-thousand-dollar wage and the work state would have charged $2,036. Because home is the dearer of the two, your bill is the same with or without the agreement. What changes is that you file once instead of twice.
- It does not stay the same as you earn more. On forty-five thousand dollars the Pennsylvania bill is $1,382; on a hundred thousand it is $3,070. Indiana would have charged $2,921 at that higher wage. The two states pull apart as the salary rises, which is why this matters more to a senior job than a starter one.
- None of this happens by itself. Living in Pennsylvania, you have to hand your employer the exemption form for Indiana, and keep doing it. Most states want it again each year. Miss it and Indiana withholds from every paycheck as though no agreement existed. You would get it back by filing there, which is the very thing the agreement was meant to spare you.
- No dollar saving arises on this pairing: Pennsylvania levies $2,149 against Indiana's $2,036 at seventy thousand dollars, and since the home charge is the larger, a resident credit would have absorbed the work state's tax entirely. ⭐ The agreement's value is the elimination of nonresident filing and of incorrect withholding across the year — which is the outcome most commuters are actually seeking when they ask about reciprocity.
- The differential is income-dependent rather than fixed. Pennsylvania's liability runs $1,382 at forty-five thousand dollars and $3,070 at one hundred thousand, against $2,921 in Indiana at the upper figure. Where one state applies a flat rate and the other a graduated schedule the gap widens or narrows monotonically with income, so a single-salary comparison understates how much the pairing matters across a career.
- The exemption is elective and employee-initiated: the certificate must be filed with the employer, and most agreement states require renewal annually. ⚠️ Without it on file the employer is obliged to withhold Indiana tax regardless of the agreement's existence, and recovery then requires a nonresident return in Indiana — restoring precisely the compliance burden the agreement removes, with the cash held by the wrong state until the claim is processed.
What lands in your account
A $75,000 salary
Filing as
Paid
$2,280per paycheck
| Take-home, year | $59,290 |
|---|---|
| Tax, year | $15,710 |
| Share of pay taxed | 20.95% |
This is an average rate across all your pay — not the rate on your next dollar.
Pennsylvania against Indiana
A $75,000 salary
Compare with
+$3,636a year in Indiana, once local prices are leveled
| Measure | Pennsylvania | Indiana |
|---|---|---|
| Take-home pay | $59,290 | $59,410 |
| Worth after local prices | $60,810 | $64,447 |
| Share of pay taxed | 20.95% | 20.79% |
| State sales tax | 6% | 7% |
| Groceries exempt here | Yes | Yes |
| Clothing exempt at $100 | Yes | No |
| Property tax rate | 1.3% | 0.74% |
| Price level | 97.5 | 92.2 |
| Housing prices | 85.8 | 71.4 |
| Fuel tax | 57.6¢ | 37¢ |
| Tobacco tax | $2.60 | $3.00 |
City income tax excluded. Sales-tax row: state-only. Exemptions: Pennsylvania, Statewide average; Indiana, Statewide average. Clothing: one $100 item; higher prices can change tax.
What you would need there
A $75,000 salary
Moving to
$70,026in Indiana, for the same life
| To match take-home only | $74,823 |
|---|---|
| You could take a cut of | −$4,974 |
| Prices in Indiana | 92 vs 98 |
State taxes and state price levels only. No city tax, and no housing market.
What each state would charge, across the ladder
Reference wages for a single filer, not a claim about anyone's salary. The last column is the difference the agreement actually removes — which is the gap between the two states, not Indiana's whole charge.
| Wage | Pennsylvania charges | Indiana would charge | Agreement is worth |
|---|---|---|---|
| $45,000 | $1,382 | $1,298 | $0 |
| $70,000 | $2,149 | $2,036 | $0 |
| $100,000 | $3,070 | $2,921 | $0 |
What this page cannot tell you
- This covers wages from a job. It does not cover self-employment, rent or investment income — those follow the ordinary rules for Indiana.
- ⚠️ And it is a deal between two states. City and county taxes are not part of it, and several of these states have them.
- Every agreement in this dataset applies to wages and salaries only. Business, rental, gain and investment income sourced to Indiana remains taxable there under ordinary nonresident rules, and a commuter with such income may still owe a Indiana return notwithstanding the agreement.
- ⚠️ Reciprocity binds the state layer only and commonly does NOT extend to municipal or county income taxes — Pennsylvania's local earned income tax is the standard example, remaining payable at the place of employment despite the state-level agreement. Local liabilities are excluded from every figure on this page.