DMarkM1
Expert Alumni

State tax filing

You are correct.  MD is only going to tax you on the income earned while living in MD.  NY however is going to tax you on the income earned while a part-year resident and the income earned while remotely working in MD (so all the income).  You will claim a credit on your MD part-year resident return only for the tax on the income taxed by NY while you were a resident of MD.

 

I suggest completing the NY return first.  First time through the NY interview indicate "No" not all the wages belong to NY.  Only allocate the non-resident part of NY wages to NY.  Go through to the end and note the income and income tax imposed by NY on the non-resident income.  That will be used on the MD return for the credit for taxes paid to another state. 

 

You can then go back through the NY interview.  This time select that all wages are NY sourced.  You can then allocate which is resident and which is non-resident to complete the NY state interview.

 

Next you can complete the MD interview.  You will  subtract out the NY resident income from MD income when asked to allocate so that is not double taxed.  When you get to the credit section use the NY non-resident income and tax on that income to claim the credit for taxes paid to another state. 

 

 

 

 

 

 

  

 

 

**Say "Thanks" by clicking the thumb icon in a post
**Mark the post that answers your question by clicking on "Mark as Best Answer"