Multistate rules: credits, part-year residents and the Compact

Last checked Nov 3, 2026

How each state keeps people who live in one state and earn in another from being taxed twice. Two different tools are at work. For income earned while a resident and also taxed by another state, the home state gives a credit for the other state's tax. For a part-year resident's income earned while not a resident, most states keep it out with a subtraction, exclusion or allocation, not a credit. Also here: reverse credits for nonresidents, local tax credits, and Multistate Tax Compact membership. From the 2025 forms and instructions, the statutes and the Multistate Tax Commission.

Subtracted or excluded (8) Allocated or prorated (29) Nonresident credit (3) Other method (2) No individual income tax (9)
How a part-year resident keeps income earned while not a resident out of the state's tax. A subtraction or exclusion leaves it out of income; an allocation or proration figures the tax and keeps the in-state share; a few states use a credit instead. This is separate from the credit for tax paid to another state on income earned while a resident. Click a state for its rules.

Reverse credits

These states give the credit to nonresidents instead of their home states, so a resident of a listed state claims the credit on the nonresident return, not at home.

Arizona credits residents of California, Indiana, Oregon, Virginia
California credits residents of Arizona, Guam, Oregon, Virginia
Indiana credits residents of Arizona, Oregon, District of Columbia
Oregon credits residents of Arizona, California, Indiana, Virginia
Virginia credits residents of Arizona, California, District of Columbia, Oregon

Every state

Reciprocal wage agreements are on the withholding page.

State	Resident credit	Part-year: income while a nonresident	Part-year: resident-period credit	Reverse credit for	Compact
Alabama	Schedule CR, Credit For Taxes Paid To Other...	Other method	Yes	none	compact member
Alaska	No individual income tax				compact member
Arizona	Arizona Form 309, Credit for Taxes Paid to...	Allocated or prorated	Yes	California, Indiana, Oregon, Virginia	associate member
Arkansas	Form AR1000TC, Schedule of Tax Credits and...	Allocated or prorated	?	none	compact member
California	Schedule S, Other State Tax Credit (attached to...	Allocated or prorated	Yes	Arizona, Guam, Oregon, Virginia	sovereignty member
Colorado	Form DR 0104CR, Individual Credit Schedule, Part...	Allocated or prorated	Yes	none	compact member
Connecticut	Form CT-1040, Schedule 2, Credit for Income Taxes...	Allocated or prorated	Yes	none	associate member
Delaware	Form PIT-RES, Line 28 Worksheet (Credit for Taxes...	Allocated or prorated	Yes	none	sovereignty member
District of Columbia	Out of State tax credit, Calculation K (one for...	Subtracted from income	Yes	none	compact member
Florida	No individual income tax				associate member
Georgia	Worksheet for Other State(s) Tax Credit in the...	Excluded from income	Yes	none	associate member
Hawaii	Schedule CR, Schedule of Tax Credits, line 12...	Allocated or prorated	Yes	none	compact member
Idaho	Form 39R, Resident Supplemental Schedule, Part C:...	Allocated or prorated	Yes	none	compact member
Illinois	Schedule CR, Credit for Tax Paid to Other States...	Allocated or prorated	Yes	none	associate member
Indiana	Form IT-40, Schedule 6: Offset Credits, line 5,...	Allocated or prorated	Yes	Arizona, Oregon, District of Columbia	associate member
Iowa	IA 130 Out-of-State Tax Credit (41-130), one for...	Nonresident credit	Yes	none	associate member
Kansas	Worksheet for Residents in the Form K-40...	Allocated or prorated	Yes	none	compact member
Kentucky		Allocated or prorated	?	none	sovereignty member
Louisiana	Form IT-540, Nonrefundable Priority 1 Credits,...	Allocated or prorated	Yes	none	sovereignty member
Maine		Nonresident credit	?	none	associate member
Maryland	Form 502CR, Part A, Credit for Income Taxes Paid...	Subtracted from income	Yes	none	associate member
Massachusetts	Form 1, Line 30 Worksheet for Taxes Due Any Other...	Excluded from income	Yes	none	associate member
Michigan		Allocated or prorated	?	none	sovereignty member
Minnesota	Schedule M1CR, Credit for Income Tax Paid to...	Allocated or prorated	Yes	none	sovereignty member
Mississippi	Form 80-160, Tax Credit For Income Tax Paid To...	Excluded from income	No	none	associate member
Missouri		Allocated or prorated	?	none	compact member
Montana	Form 2, Schedule III, Part II, Credit for Income...	Allocated or prorated	Yes	none	compact member
Nebraska	Form 1040N, Nebraska Schedule II, Credit for Tax...	Allocated or prorated	No	none	associate member
Nevada	No individual income tax				associate member
New Hampshire	No individual income tax				associate member
New Jersey	Schedule NJ-COJ, Credit for Income or Wage Taxes...	Excluded from income	Yes	none	sovereignty member
New Mexico	Line 20 Worksheet for Computation of Allowable...	Allocated or prorated	?	none	compact member
New York	Form IT-112-R, New York State Resident Credit...	Allocated or prorated	Yes	none	associate member
North Carolina	Form D-400TC, Part 1, Credit for Income Tax Paid...	Allocated or prorated	Yes	none	associate member
North Dakota	Schedule ND-1CR, Credit for Income Tax Paid to...	Allocated or prorated	Yes	none	compact member
Ohio	Form IT RC, Ohio Resident Credit Calculation	Nonresident credit	Yes	none	associate member
Oklahoma	Form 511-TX, Credit for Tax Paid to Another State	Allocated or prorated	Yes	none	associate member
Oregon	Schedule OR-ASC, section D (Form OR-40 filers),...	Allocated or prorated	Yes	Arizona, California, Indiana, Virginia	compact member
Pennsylvania	PA Schedule G-L, Resident Credit for Taxes Paid...	Excluded from income	Yes	none	associate member
Rhode Island	RI Schedule II, Credit for Income Taxes Paid to...	Allocated or prorated	Yes	none	sovereignty member
South Carolina	Form SC1040TC with the SC1040TC Worksheet, Credit...	Other method	Yes	none	associate member
South Dakota	No individual income tax				associate member
Tennessee	No individual income tax				associate member
Texas	No individual income tax				compact member
Utah	Form TC-40S, Credit for Income Tax Paid to...	Allocated or prorated	Yes	none	compact member
Vermont		Allocated or prorated	Yes	none	sovereignty member
Virginia	Schedule OSC, Credit for Tax Paid to Another...	Subtracted from income	Yes	Arizona, California, District of Columbia, Oregon	associate member
Washington	No individual income tax				compact member
West Virginia	Schedule E, Credit for Income Tax Paid to Another...	Allocated or prorated	Yes	none	sovereignty member
Wisconsin	Schedule OS, Credit for Net Tax Paid to Another...	Allocated or prorated	Yes	none	associate member
Wyoming	No individual income tax				associate member

Informational only, not tax advice. Credit limits, qualifying taxes and attachments differ by state; open a state for the form, the line and the source.