KristinaK
Employee Tax Expert

State tax filing

Yes, you need to file two tax returns. If you haven't officially changed your residency from Indiana to Maryland (obtained MD driver's license, registered to vote in MD, etc.), then for tax purposes you are considered a resident of IN and a nonresident for MD.

If you have income in your nonresident state (MD), you will need to file a nonresident return showing income sourced in MD. In TurboTax ALWAYS start the preparation of your state tax returns with a nonresident return. Then, since you are still a resident of IN, you have to file an IN resident return and report income from ALL sources on that return.

TurboTax will calculate taxes paid in MD as a credit for other state taxes paid on your IN return and will reduce your IN tax liability, if any. That's why it's important to start preparation of state tax returns with a nonresident return.

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