We are military living in Maryland with a rental property in Texas. Turbo Tax is suggesting I need to pay a state tax to MD on rental property profits. Is this correct?

[Anonymous]

Our home of record is Texas.

[Carl]

If MD is not your HOR or you spouse's SLR then you don't need to report anything to MD or even file an MD tax return at all. The only way you would file an MD return is if you or your spouse have MD earned income from a business that is physically located in MD.

Assuming TX is your HOR/SLR and that your military pay is your "ONLY" source of income (minus the rental) you should have told the program that TX is your home state and that you did *NOT* have any income from any other state. Then, since TX doesn't tax personal income the federal return would be the only return you complete.