In 2019 my main job was in Washington, DC. I also had a part time job in Virginia where I didn't make much at all.
I am a Virginia resident and only commute to DC for work.
I went through the Virginia state return process and Turbotax says....
About the money you made in other states
Before we get too far into your return, there's something we wanted to point out.
Based on what we know from your federal return, in addition to making money in Virginia, you also made money in the District of Columbia.
This money gets taxes twice, by both Virginia and the other state.
But don't worry if you see double taxed income as you go through your Virginia return. Later on we'll help you get a credit that offets paying double taxes.
I've read some answers on here that because D.C. has reciprocity with all other states, that I don't need to file a D.C. "State" tax return. Is that true?
I did pay taxes on my D.C. W-2 form, but it was computed out to an overall 4% tax rate, which was more in-line with a Virginia state tax than a Washington, DC one.
It says I can submit a "DC Nonresident Request for Refund" form D-40B and request the taxes paid returned, but I realize I do need to pay some state taxes on my income, regardless of where I made it.
Does Turbotax automatically compute what I owe/should get back based on the D.C. reciprocity, which is essentially a pass-through and calculates the income as if it were a Virginia W-2. Or do I need to file the "DC Nonresident Request for Refund" form D-40B and request ALL my taxes paid back?
I know that I am not required to pay taxes in both places, but I'm wondering if Turbotax calculates it so that any D.C. taxes paid you must file a D.C. return in order to get the correct tax return number.
Am I being subject to double taxation based on Turbotax's calculations, and require a full reimbursement of state taxes paid on my Washington, DC W-2 form?
When I try to do it as if I were getting double taxed, on my Virginia state return under form "Schedule OSC" it says DC is not a valid state for the credit.
So I can probably remove that from the Virginia return, but I'm still eligible for the refund on the D.C. side? This is so confusing.
