@masscircle --
Q: "Can we still file Federal as Married Filing Joint?"
A: Yes. Your federal filing status is not affected by your State of Residence.
Q: "Will that be OK if we use the PA address?"
A: Yes. The address on your tax return should be the address you want the IRS to use if they have to send you a letter or a check.
Q: "Do we need to file Married filing Separate for the states?"
A. If your main, primary home (your domicile in tax terminology) is going to remain in PA, then you are a domiciliary resident of PA, and you may still file MFJ for PA. If you live in Virginia, or maintain a place of abode in Virginia, for more than 183 days during the tax year, then VA will tax you as a resident ("statutory residency"), and you would have to use the MFS filing status on your VA return. A "dual resident" is a person who is a domiciliary resident of one state and a statutory resident of another.
https://www.tax.virginia.gov/filing-status
If you become a dual resident. then the PA-VA reciprocal agreement would not apply. You would have to file as a resident in each of the two states. In this situation you would be able to claim a credit on your PA return for the taxes paid to VA, so you wouldn't be double-taxed.
If you do not become a statutory resident of VA, then the reciprocal agreement would apply and the income you earn in VA would be taxable only by PA.
**Answers are correct to the best of my ability but do not constitute tax or legal advice.
