Changed Residency

[jbur943]

My permanent address is in Pennsylvania, and I work in Maryland. I accidentally changed my permanent address to a MD address (school housing), but changed back to PA 2 pay periods later. I assume I will need to file with both states, but does anyone know how this situation would work?

[tagteam]

Changed it with whom or which entity? Your employer? The state?

Presumably, you should be able to get a refund if you file with MD.

[jbur943]

I only changed it with my employer.

[tagteam]

Prospectively? Did you do this in 2023 or was it last year?

[jbur943]

This was in 2023. I'm not sure what you mean by prospectively, but this is my current employer.

[tagteam]

Sorry, I meant for this year (2023) in the sense that it might not be too late for your employer to rectify the situation with respect to W-2 withholding.

[jbur943]

I think I understand. Since it was only a month then would I file a nonresident form with Maryland?

[jbur943]

The income I got while my address was listed as MD is less than the threshold to need to file with them, which is why I ask

[Opus 17 · Accepted solution]

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@jbur943 wrote:

I only changed it with my employer.

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Generally speaking, when you live in state A, but physically work in state B, you are required to file in state B as a non-resident, and you report your state B wages and pay taxes to state B.  Then, you file in state A and report all your world-wide income (wages, but also investments and so on) and pay taxes to state A.  State A gives you a credit for taxes that you pay to state B on the same income.

However, Maryland and Pennsylvania have a reciprocity agreement.  As long as you don't maintain a residence in Maryland, you only file a PA return if you live in PA but work in MD.

https://www.marylandtaxes.gov/forms/Personal_Tax_Tips/tip56.pdf

(It would be a much different problem if, for example, you kept an apartment in MD that you lived in Monday-Thursday and then spent weekends at home.  But we won't go down that road unless we have to.)

Now in your case, you will need to file a nonresident return for Maryland, report zero Maryland wages, and the Maryland withholding.  That will result in a full refund of the Maryland withholding.  Then you will file a resident return in PA that reports all the PA income (even the income that was declared for Maryland).  While Turbotax may assign your income partially to MD based on your W-2, you can override this and assign all the income to PA when you prepare your return. 

[tagteam]

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@jbur943 wrote:

....would I file a nonresident form with Maryland?

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Yes, but you might want to ask your employer (payroll department or equivalent) if they can rectify situation.

[jbur943]

Thank you! This is what my thinking was as well.

[jbur943]

Understood. I'll see what I can find out.

[Opus 17]

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@tagteam wrote:

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@jbur943 wrote:

....would I file a nonresident form with Maryland?

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Yes, but you might want to ask your employer (payroll department or equivalent) if they can rectify situation.

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It is possible for the employer to correct their tax filings and issue your W-2 showing only PA wages.  This would require them to amend their withholding reports to get the extra withholding back from Maryland.  It's not impossible, but it is a bit tricky, and they might not be willing to do it since (after all) they did what you told them to do, and since you can correct the situation on your tax return even if they don't fix it for you.  It doesn't hurt to ask, but you can deal with it if they aren't willing to make the adjustment.