Determination engine

Which state do you actually withhold in?

Reciprocity, convenience-of-the-employer, nonresident thresholds and unemployment localization, applied together to one employee's facts. Every answer cites the state source it came from.

Withhold Montana income tax.

District of Columbia and Montana have a reciprocal agreement, so the work state stands down once the exemption certificate is on file.

Income tax withheld to

Montana

Graduated, top rate 5.65%

Employee certificate

D-4A

Certificate of Nonresidence in the District of Columbia

Unemployment insurance

District of Columbia

Localized under factor 1: Localization.

Reciprocal agreement

Yes

District of Columbia exempts Montana residents.

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File D-4A with the employer

Reciprocity is not automatic. Until the employee files D-4A (Certificate of Nonresidence in the District of Columbia) you are legally required to withhold District of Columbia tax. Keep the signed form on file; it is not sent to the state.

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Withhold Montana income tax instead

Under the agreement the employee is taxed only by their state of residence. You will need a Montana withholding account.

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District of Columbia paid family and medical leave contributions

The DC Paid Family Leave tax is 0.75% of covered wages for 2026 and is 100% EMPLOYER-funded - there is no employee contribution. Employee contribution: 0%. These follow the state of unemployment coverage, not the income tax state.

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Employer registrations you will need

Montana — Income tax withholding: Montana Department of Revenue
District of Columbia — Unemployment insurance: DC Department of Employment Services (DOES)

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Get the form

D-4A — District of Columbia (official state source)

District of Columbia profile Montana profile Full write-up for this pair

Change the inputs

Withholding determination

Answer six questions. The result is a shareable link, so you can paste it into a ticket or an email.

Employee lives inState of residence

Work is performed inWhere the employee physically sits

Employer is based inWhere the work is directed from

Days in the work stateThis calendar year, leave blank if unknown

Wages from work-state daysUS dollars, leave blank if unknown

Arrangement Works remotely rather than at an employer location Remote work is an employer necessity, not employee preference

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This is a determination aid, not advice. StateSide encodes published state rules and applies them mechanically to the facts you enter. It does not know your entity structure, your nexus history, your equity compensation, or the dozens of exceptions that turn a clean rule into a judgement call. Every determination cites the state source it came from — verify against that source, and take anything consequential to a payroll tax professional before you act on it.