You must file a part year resident form for each state. Since the company is based in Virginia (VA), all income is considered VA sourced income and is taxable to VA. You could do a credit for taxes paid to another state on the same income for the first 2-3 months of the year during your Maryland (MD) residency. This may take some calculation on your part to be sure you enter the appropriate income and tax for this period on the MD return.
The credit for taxes paid to another state on the same income is used on your resident state because they do not want you to pay taxes twice on the same income. As the resident state all worldwide income must be included.
The credit for tax paid to another state on the same income will be the lesser of:
- the tax liability actually charged by the nonresident state, OR
- the tax liability that would have been charged by your resident state
You need a Maryland (MD) part year if you worked while you were a resident in MD. January through March (or February)
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How does Maryland tax part-year resident? Pesonal Tax Tip #52
Were you a resident of Maryland for part of the year? If you either established or abandoned Maryland residency during the calendar year, you must file as a part-year resident, using Form 502.
As a nonresident of Virginia (VA) working remotely for a VA company: Virginia Residency Status
- You are liable to pay Virginia income tax as a nonresident on income you earn from any business, trade, profession, or occupation in Virginia.
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