Thanks SO MUCH much for that detailed answer @MaryK4, that was incredibly helpful! I've got this setup in TurboTax now, with a separate Maryland nonresident return (with zero MD wages.)
Great news: Maryland's state taxes are apparently higher than Virginia's, so the credit from Maryland is greater than what I owe to Virginia, which means I'll actually get a sizable refund from this (I'd have been pretty frustrated if that had gone the other way!)
Not so great news: TurboTax indicates I owe an underpayment penalty to Virginia (stands to reason, since my company sent zero state tax to VA this year). Thankfully it's only about 20% of the net refund I'll get after I apply the MD credit to my VA taxes. Any way around that penalty?
Also, it looks like I'll also have to pay TurboTax the filing fee for an additional state. Again, not a dealbreaker, but definitely incentive to get this ironed out before next year.
Final question: in my MD state return, TT asks:
We noticed that you have no Maryland source income even though you have taxes withheld on your Maryland return. If taxes were withheld in error, check the box below.
I'm guessing I should check that box, correct?
Thanks so much again for your help, really appreciate it (do you have a tip jar? 😎)
