Yes. DC and Maryland have a written tax reciprocity agreement, so if you live in one jurisdiction and work in the other, you owe income tax only to the place where you live. Maryland residents working in the District are exempt from DC income tax on their wages, and DC residents working in Maryland are exempt from Maryland state income tax on theirs. The agreement covers wages, salaries, and other compensation for personal services. To make it work in practice, you have to file the right withholding certificate with your employer.
How the Agreement Works
Under D.C. Code § 47-1805.02, Maryland residents who earn wages or salary in the District are generally exempt from DC income tax on that income.1D.C. Law Library. District of Columbia Code 47-1805.02 Maryland’s side of the agreement, documented in Administrative Release No. 3 from the Comptroller’s Office, mirrors it: DC residents earning wages in Maryland are exempt from Maryland state income tax on that compensation.2Maryland Comptroller. Maryland Income Tax Administrative Release No. 3
The practical effect is simple. Your employer withholds income tax only for the jurisdiction where you live, and at tax time you file one resident return. Without the agreement, a Maryland resident working in DC would technically owe tax to both jurisdictions and then have to claim credits to avoid double taxation. Reciprocity cuts out that entire step.
Maryland Residents Working in DC: File Form D-4A
If you live in Maryland and work for a DC employer, file Form D-4A (Certificate of Nonresidence in the District of Columbia) with your employer. The form tells payroll to stop withholding DC income tax from your paychecks.3DC Office of Tax and Revenue. Form D-4A Certificate of Nonresidence in the District of Columbia You submit it to your employer, not to the DC government. Your employer keeps it on file as documentation for why they’re not remitting DC taxes on your wages.
The form itself is short. You give your name, Social Security number, permanent address outside the District, and the tax year, and you sign a certification that you will not be residing in DC for 183 days or more during that year.3DC Office of Tax and Revenue. Form D-4A Certificate of Nonresidence in the District of Columbia Because the certification is tied to a specific year, confirm with your employer that the form on file is current.
Handle this early. If you start a new job and don’t submit a D-4A, your employer will default to withholding DC taxes. Recovering those dollars means filing a refund request after the year closes, which is slower than doing the form upfront.
DC Residents Working in Maryland: Use Form MW507
Reciprocity runs the other way too. If you live in DC and work in Maryland, your Maryland employer should not be withholding Maryland state income tax from your wages. To claim the exemption, complete Line 4 of Maryland Form MW507 (Employee’s Maryland Withholding Exemption Certificate), check the box for District of Columbia residents, and certify that you do not maintain a place of abode in Maryland.4Maryland Comptroller. Form MW507 Employees Maryland Withholding Exemption Certificate
If wages are your only Maryland income and your employer stops withholding Maryland tax, you generally don’t need to file a Maryland nonresident return at all. If you also have Maryland-source income from rental property, a business, or gambling winnings, you’ll still need to file Form 505.5Maryland Comptroller. Maryland Nonresident Tax Forms and Instructions
The 183-Day Rule That Breaks Reciprocity
Both jurisdictions use 183 days as the line that can override the agreement. The D-4A explicitly requires you to certify that you won’t reside in DC for 183 days or more during the tax year.3DC Office of Tax and Revenue. Form D-4A Certificate of Nonresidence in the District of Columbia On the Maryland side, the reciprocal agreement does not apply to someone who maintains a place of abode in Maryland for more than six months and is physically present for 183 days or more; Maryland then treats that person as a statutory resident, and the wage exemption no longer shields the income.2Maryland Comptroller. Maryland Income Tax Administrative Release No. 3
This rule catches the gap between legal domicile and daily reality. You might consider yourself a DC resident, but if you sleep at a Maryland apartment most of the year, Maryland can claim you as a statutory resident. The same logic runs the other way. Count your days honestly.
Maryland County Taxes Still Apply
Here is something that trips up Maryland residents working in DC: reciprocity covers state-level income tax, but Maryland’s county “piggyback” tax is a separate obligation that you owe no matter where you work. Every Maryland county and Baltimore City imposes a local income tax on top of the state rate. For 2026, those rates range from 2.25% in Worcester County to 3.30% in Dorchester and Kent Counties.6Maryland General Assembly. Payments to Civil Divisions of the State – Fiscal 2027 Most counties in the DC commuter belt, including Montgomery, Prince George’s, and Howard, sit at 3.20%.
The local tax is calculated on your Maryland return based on where you live, not where you work. Reciprocity does not reduce it. If you’re planning your total tax burden as a Maryland resident commuting into DC, add your county rate on top of the Maryland state rate.
Getting a Refund for Incorrect Withholding
If your DC employer withheld District income tax from your wages when they shouldn’t have, you can recover it by filing Form D-40B (Nonresident Request for Refund) with the DC Office of Tax and Revenue after the calendar year closes.7DC Office of Tax and Revenue. DC Nonresident Request for Refund or Ruling D-40B File a separate D-40B for each tax year you’re claiming. Mail it to the Office of Tax and Revenue at P.O. Box 7861, Washington, DC 20044-7861.
Don’t sit on this. Under D.C. Code § 47-4304(a), you have three years from the due date of the return, or three years from the date the tax was paid, whichever is later.8Government of the District of Columbia Office of Tax and Revenue. OTR Revenue Ruling 2008-01 Refunds-Statute of Limitations After that, you lose the money. The same principle applies in reverse: a DC resident whose Maryland employer wrongly withheld Maryland tax would file a Maryland return to claim that refund.
Moving Between DC and Maryland Mid-Year
Reciprocity works cleanly when you live in one jurisdiction all year. A mid-year move complicates things. DC requires part-year residents to file Form D-40, prorating the standard deduction and applicable credits for the portion of the year they lived in the District.9Office of Tax and Revenue. Individual Income Tax Filing
In a mid-year move, expect to file in both jurisdictions: a part-year return in DC for the months you lived there, and a part-year or full-year return in Maryland for the months you lived in Maryland. The reciprocity exemption applies only during the period you were actually a nonresident of the taxing jurisdiction. Tell your employer promptly when you move so withholding can be adjusted. If you previously filed a D-4A claiming nonresidence in DC and then move into the District, file Form D-4 right away so your employer begins withholding DC taxes.
Telework and Hybrid Work
The agreement was designed for commuters who physically cross the border to work. If you’re a Maryland resident teleworking from home for a DC-based employer, the work is being performed in Maryland, so Maryland taxes the income under its normal rules and your employer should be withholding Maryland tax. If you never set foot in a DC office, you don’t even need a D-4A, because there’s no DC-source wage income to exempt.
Hybrid schedules get murkier. If you split time between a DC office and a Maryland home, your income could in principle be sourced to both jurisdictions based on where the work is actually performed. In practice, most employers simplify this by treating hybrid workers under the reciprocity framework as long as the worker is a nonresident of DC. The cleaner your D-4A paperwork, the fewer questions you’ll face.
What Reciprocity Does Not Cover
Business Income
The agreement covers wages, salaries, and personal service compensation. It does not protect income from an unincorporated business operating in DC. A Maryland resident running a business in the District is subject to the DC Unincorporated Business Franchise Tax at 8.25% on taxable income, with a minimum tax of $250 if DC gross receipts are $1 million or less and $1,000 if they exceed that. The tax applies based on where the business operates, not where the owner lives. There is a narrow exemption: if more than 80% of gross income comes from personal services by the members and capital isn’t a material income-producing factor, the business is exempt, which captures many solo consultants and freelancers.10Office of Tax and Revenue. DC Business Franchise Tax Rates
Professional Licensing
Tax reciprocity has nothing to do with whether DC recognizes your Maryland professional license, concealed carry permit, or any other credential. DC maintains its own licensing requirements. Attorneys seeking to practice in DC apply through the DC Court of Appeals Committee on Admissions, which handles reciprocity-based bar admissions separately from any tax agreement.11DC Bar Admissions. DC Bar Admissions Home Medical professionals, real estate agents, and other licensed workers should verify their credential status with the relevant DC board before working across the border.