What are state tax reciprocity agreements?

Reciprocity agreements between states allow residents who work in a neighboring state to pay income tax only to their home state, not the state where they work. For example, a Virginia resident working in DC pays only Virginia tax. Without reciprocity, you'd file returns in both states and receive a credit to prevent double taxation. About 30 pairs of states have reciprocity agreements; check both states' rules before assuming you qualify.