I live in Virginia and have a household employee who lives in Maryland, which has a reciprocity agreement with Virginia. For their W-2, which state should show up on the bottom? As I understand it, they need to file in whatever state the form shows, but I also understand that they should not need to file in both states, due to reciprocity, and should only file in Maryland. But my employer id number next to the state is my Virginia id. In the past, I've used NannyPay to prepare this form and it put MD, which I did this year in TurboTax, but my employee is doubting that I did it correctly. Which is correct?
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Because of the reciprocity agreement it genuinely doesn't matter which state EXCEPT if you are going to be sending in any withholding for your household employee. In that case you put the state that you paid the taxes to.
If you were going to set this up to send in withholding I would tell you to set your employee up with Maryland taxes withheld and sent in because your employee files and pays taxes in Maryland. So I would put Maryland as the state regardless.
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