I live in Maryland, but work out of state (in Va and Washington, DC). Why am I being asked to pay income tax to Maryland?

andybaritz — Thu, 06 Jun 2019 06:00:04 GMT

Yes, you will need to pay state income taxes in your resi...

DS30 — Thu, 06 Jun 2019 06:00:05 GMT

Yes, you will need to pay state income taxes in your residence state (MD) on all income from all sources (including VA and DC earned income).

If you maintained your permanent residence in MD and your only VA and DC income is from wages, then you will not have any DC or VA nonresident state income tax filing (unless DC or VA withholdings were taken out of your pay (see below)). You will instead include all income (including VA and DC source wages) on your MD resident state income tax return.

MD has what is called a state reciprocal agreement with both VA and DC. This allows nonresidents to not have nonresident state withholding taxes taken out for wages earned in the reciprocal state.

Just make sure to selected "no" to " Did you make money in any other states?" under the Personal Information section in TurboTax (see screenshots)

However, if VA withholding were taken out of your wages, you will not be able to claim a state tax credit in MD for these VA withholdings. Instead, you will need to file a VA nonresident state income tax return to claim a refund.

In order to get the full refund of your VA state income tax withholdings, you will need to file a nonresident VA return but report zero "0" income from VA (even though you do have VA wage income). You need to file your VA return this way because MD does not allow a credit for tax paid to a reciprocal state on wages, salaries and commissions. If tax was withheld by a reciprocal state (VA), you must file directly with the state for a refund of those taxes. You must mail in this VA nonresident state income tax return and include your state W-2 information. You will want to include an explanatory statement with your VA return stating your situation (that your VA employer withheld VAtaxes from your wages in error).

In order to get the full refund of your DC withholding, you will need to file a Form D-40B, Non-Resident Request for Refund (available by visiting Tax Forms, Publications, and Resources). You will want to include an explanatory statement with your DC return stating your situation.

topic I live in Maryland, but work out of state (in Va and Washington, DC). Why am I being asked to pay income tax to Maryland? in State tax filing

I live in Maryland, but work out of state (in Va and Washington, DC). Why am I being asked to pay income tax to Maryland?

Yes, you will need to pay state income taxes in your resi...