My company is registered in VA, so I received a VA K-1 (profit). My husband's company is registered in MD, and he began receiving a MD K-1 (loss) last year. We have been living in VA since 2018. Do we need to file state taxes in both MD and VA? I was told we will need to file both a MD 505 (non-resident income tax return) and a VA resident individual income tax return.
Currently, we are using TurboTax. Without entering his K-1 loss in the Virginia State Tax section, we would receive a refund from the Federal tax return but owe taxes to Virginia. How can we account for his K-1 loss to offset our income if we report his MD K-1 in a non-resident return in Maryland?
If we must file in both states, should we report my W-2 and VA K-1 with Virginia, along with my husband's W-2, and only his MD K-1 with Maryland?
Thank you for your help!
