MD resident, working in DC

Forum|Forum|1 year ago
April 13, 2025
1 reply
20 views

I'm helping my daughter with her taxes. She is a MD resident, owns a house in Baltimore, has a MD drivers license, and votes in MD, but she worked in DC all of 2024, sharing a DC apartment with her boyfriend (more than 183 days). Her W2 shows taxes paid to DC and Maryland. It looks like she has to file with both DC and MD, with DC saying she is a 'statutory resident' - but how does that work with her MD residency status? I see that there is reciprocity, but I don't understand how to file for it.

Best answer by AmyC

You have special circumstances. DC is the source of the wages and gets to tax them. MD taxes bank interest and other stuff and will give a credit for the income earned in DC.

North Eastern States Tax Officials Association Cooperative Agreement (NESTOA Agreement) includes several states where taxpayers can be residents of multiple states, including the District of Columbia Maryland. This agreement overrides the reciprocal agreement which is for living one place and working in the other.

Your daughter has a house, votes, etc in MD, that is her domicile. She is a statutory resident of DC.

The NESTOA Agreement provides that in a dual residency situation, the state to which earned income is sourced gets to tax the income. For non-sourced income, such as income from intangible assets, the state of domicile gets to tax the income.

For purposes of applying the resident credit in dual residency situations, the state of domicile must give a resident credit for earned income sourced to the state of statutory residence. For non-sourced income, the state of statutory residence must give the resident credit.

AmyCAnswer

Level 15

You have special circumstances. DC is the source of the wages and gets to tax them. MD taxes bank interest and other stuff and will give a credit for the income earned in DC.

North Eastern States Tax Officials Association Cooperative Agreement (NESTOA Agreement) includes several states where taxpayers can be residents of multiple states, including the District of Columbia Maryland. This agreement overrides the reciprocal agreement which is for living one place and working in the other.

Your daughter has a house, votes, etc in MD, that is her domicile. She is a statutory resident of DC.

The NESTOA Agreement provides that in a dual residency situation, the state to which earned income is sourced gets to tax the income. For non-sourced income, such as income from intangible assets, the state of domicile gets to tax the income.

For purposes of applying the resident credit in dual residency situations, the state of domicile must give a resident credit for earned income sourced to the state of statutory residence. For non-sourced income, the state of statutory residence must give the resident credit.

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U

user17747633849

Level 2

This is very good to know. Thank you.

I have a situation where I am NY domiciled and also statutory resident of MD. All my W2 income is MD-sourced. It appears NY will give me credit for income tax on earned wages in MD, but which state will give me credit for income tax on interest/dividends/cap gains (all non W2 income)?

RogerD1

Level 6

Since you consider yourself a statutory resident of Maryland (you lived there 183 days or more during the year), you will file a Maryland resident tax return. Because you are a considered a Maryland resident, you will be taxed on all your income. You will want to work on your Maryland return and finalize it before starting your New York return.

Since your domicile is in New York, you are also considered a resident there as well. New York will get to tax all your income - wages and non-wage income - but New York will also give a tax credit for the income that was taxed in Maryland. This is why it's important to work on and finalize your Maryland return first because information from that return will be used to determine the New York credit for taxes paid to Maryland.

[Edited 4/7/2026, 7:31 AM PDT, @user17747633849 ]

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