If you feel that your W-2 shows an error with state withholdings, you will need to contact your employer and ask for a corrected W-2. (You can file an extension until you receive this updated W-2.)
You will include all your income (including DC sourced wages) on your MD resident state income tax return
DC and
MD have what is called a state reciprocal agreement. This allows nonresidents
to not have nonresident state withholding taxes taken out for wages earned
in the reciprocal state.
If DC withholding were taken out of your wages, you
will not be able to claim a state tax credit in MD for these
DC withholdings. Instead, you will need to file a DC nonresident state
income tax return to claim a refund.
To claim a
refund of DC taxes withheld or DC estimated taxes paid, use Form D-40B,
Non-Resident Request for Refund (available by visiting DC - Tax Forms )
You
must mail in this DC nonresident state income tax return and include your state
W-2 information. You will want to include an explanatory statement with your DC
return stating your situation (that your DC employer withheld DC taxes from
your wages in error due to a reciprocal agreement with MD).
