You have special circumstances. DC is the source of the wages and gets to tax them. MD taxes bank interest and other stuff and will give a credit for the income earned in DC.
North Eastern States Tax Officials Association Cooperative Agreement (NESTOA Agreement) includes several states where taxpayers can be residents of multiple states, including the District of Columbia Maryland. This agreement overrides the reciprocal agreement which is for living one place and working in the other.
Your daughter has a house, votes, etc in MD, that is her domicile. She is a statutory resident of DC.
The NESTOA Agreement provides that in a dual residency situation, the state to which earned income is sourced gets to tax the income. For non-sourced income, such as income from intangible assets, the state of domicile gets to tax the income.
For purposes of applying the resident credit in dual residency situations, the state of domicile must give a resident credit for earned income sourced to the state of statutory residence. For non-sourced income, the state of statutory residence must give the resident credit.
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