If an employee works in Arizona but lives in one of the states, they can submit the Wec, Employee Withholding Exemption Certificate form. Employees must also use this form to terminate their withholding exemption (for example.B. if they are going to Arizona). Illinois has a tax deal with four neighboring countries: Iowa, Kentucky, Michigan and Wisconsin. If your employee works in Illinois but lives in one of the mutual states, they can submit Form IL-W-5-NR, Employee`s Statement of Nonresidence in Illinois, for the Illinois State Income Tax Exemption. If an employee lives in a state without a mutual agreement with Indiana, they can get a tax credit for taxes withheld for Indiana. The member states of the agreement have something called fiscal reciprocity between them, which relieves anger. This is especially important, for example, for the highest income earners who live in Pennsylvania and work in New Jersey. Pennsylvania`s peak rate is 3.07%, while New Jersey`s peak rate is 8.97%. Although the states that are not listed do not have tax opposition, many have an agreement in the form of loans.. .