The program should have an income allocation interview in the MD tax return program (don't change the state allocations in the Form W-2). In order to make the income allocation work, you have to show that you changed your state of residence from FL to MD. That, and your answers to the MD state return interview, will trigger the program to suggest filing a part-year resident tax return.
How to do that? When you complete the Personal Interview:
- Select MD as your state of residence;
- Answer "Yes" to "lived in another state in 2016?" (That state would be FL)
- Date you became a resident of the new state? (That would be the date you left the service or retired)
(The question "lived in another state" applies to your state of residence. Active-duty military are considered to be "living" in their home of record state, regardless of where they are stationed. When you retired and remained in MD, you changed your residency to MD).
