Hello Mary,
Sorry for the delayed response, I never got a notification on the reply and thought I was still waiting on one. It was an internship with the Army but it wasn't through my school. I tried to do what you are saying where I would get credit for paying taxes to Virginia, but since my W-2 only had me pay income taxes to Indiana, I would have no tax payments to claim paying to Virginia. So I tried doing it the opposite way, where I would claim credit for the taxes payed to Indiana on my Virginia form, but I found out Virginia does not allow credit for taxes to other states on non-resident forms unless its to three specific states. I forget which ones but it did not include Indiana. I honestly would think being that I never lived in Virginia, never payed any income tax to Virginia, and that the state is not listed on my W-2 I would not even need to fill out a tax return but since I did work in the state I also think I need to. This has left me very confused and I appreciate your feedback.
My biggest concern with this situation is being taxed for my income twice and having to pay for that now. With a deduction from Virginia for State and Federal employees who earned less than $15000 (which since I worked for the Federal government and worked just a few months I was under that threshold) I am able to deduct my income and pay $0 to Virginia as a result in my tax return. I would then just for all intents and purposed just be taxed to Indiana so in a roundabout way that also solves my problem, but I would still like to know to solve my dilemma with the state tax credits.
