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.
