Vanessa A
Expert Alumni

State tax filing

If you live in MD and work in VA, you should not pay taxes to VA only MD.  MD and VA have reciprocal agreements.  This means you only pay taxes to the state you live in, not the state you work in. 

 

So in your case, if you had taxes withheld from VA, you will need to file a VA non resident return, claiming $0 as your income, but leaving the amount withheld as the amount withheld.  Then you will submit your return for a refund of taxes paid to VA in error.

 

Then you will file your MD return.  There is not a credit, you need to contact your employer and have them withhold taxes for MD instead of VA. I am not sure what happened on your return last year, but the states do not link like that.  You must pay taxes to the state you live in, the other state does not transfer over the money for you.  

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