Select Yes. Maryland and Virginia has reciprocity so the process is to file VA 763-S to claim a refund for tax mistakenly withheld by your employer.
You should also give you employer a VA-4 to stop Virginia withholding.
Virginia says: "If your employer withholds Virginia income tax and you find out that you are exempt, correct your withholding information with your employer for the future, and file Form 763-S to claim a refund."
Reciprocity
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