Am I required to pay the 2024 estimated Virginia state taxes TT has created vouchers for?

[Suchin21]

I live in VA, work in MD. MD State taxes were withheld from the time I started a new job in February 2023 until now.  

I had to file a non-resident MD state tax return in addition to my VA return. VA is showing I owe money and MD is showing I am due a refund for 2023. Because VA's 2023 return had an underpayment of taxes, TT has created vouchers and a schedule for me to pay estimated taxes for 2024 based on what I owed to VA for 2023. There payments are split into 4 and are only $70 each. Since this was due to an error, do I have to pay these payments or can I disregard the vouchers and just take care of it with my taxes next year as I am doing now?

Will I be charged an underpayment penalty fee by VA even if I file the non resident MD return and detail what I paid to MD on a VA OSC schedule (I was not charged one this year by doing it this way)?

It is unfortunate this was only just caught now and will force me to have to do two state returns again, since I have still been paying MD state taxes thus far this year. I will be sure to have my HR dept fix this ASAP so I will pay VA state taxes for the rest of 2024.

Thank you.

[TomK2023 · Accepted solution]

You can simply disregard the vouchers if you prefer; You're not required to make estimated tax payments; we're just suggesting it based on the info in your return.

Virginia may charge you an underpayment, but it's more likely that they won't when you submit the credit for taxes paid to Maryland,

A reciprocal agreement is an agreement between two states that allows residents of one state to request exemption from tax withholding in the other (reciprocal) state.  This can save you the trouble of having to file multiple state returns.

As a worker in a reciprocal state, you can fill out that state's exemption form and give it to your employer if you don't want them to withhold taxes for your work state.  If you do this, make sure your employer also withholds taxes for your resident state, otherwise you may get hit with underpayment penalties come tax time.

Be sure to fill out Maryland Form UMW507, and give it to your employer asap.

[Suchin21]

Great! Thanks so much!