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I live in VA and freelance in DC & MD. I input my income earned in MD, but cannot input for DC, & am being charged VA state tax on the income earned in DC. How to fix?

I do not have tax forms to upload to prove this, only screenshots from the scheduling system.
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Accepted Solutions
DMarkM1
Employee Tax Expert
Intuit Approved! This answer has been verified for accuracy by an Intuit expert employee

I live in VA and freelance in DC & MD. I input my income earned in MD, but cannot input for DC, & am being charged VA state tax on the income earned in DC. How to fix?

Since VA is your resident state they will tax you on all income wherever earned.  DC and MD both have reciprocity agreements with VA.  The DC reciprocity states that only your resident state will tax any personal income and you do not need to file in DC since no taxes were withheld.  

 

The MD reciprocity states that only your resident state will tax salaries and wages.  Since you have MD self-employment income you will need to file a MD non-resident return and allocate to MD only the MD non-salary/wage income.

 

Here is the VA reference for the reciprocity agreements with DC and MD.

 

You should claim a credit on your VA return for taxes paid to another state to mitigate the MD taxes on your self-employment income.     

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1 Reply
DMarkM1
Employee Tax Expert
Intuit Approved! This answer has been verified for accuracy by an Intuit expert employee

I live in VA and freelance in DC & MD. I input my income earned in MD, but cannot input for DC, & am being charged VA state tax on the income earned in DC. How to fix?

Since VA is your resident state they will tax you on all income wherever earned.  DC and MD both have reciprocity agreements with VA.  The DC reciprocity states that only your resident state will tax any personal income and you do not need to file in DC since no taxes were withheld.  

 

The MD reciprocity states that only your resident state will tax salaries and wages.  Since you have MD self-employment income you will need to file a MD non-resident return and allocate to MD only the MD non-salary/wage income.

 

Here is the VA reference for the reciprocity agreements with DC and MD.

 

You should claim a credit on your VA return for taxes paid to another state to mitigate the MD taxes on your self-employment income.     

**Say "Thanks" by clicking the thumb icon in a post
**Mark the post that answers your question by clicking on "Mark as Best Answer"
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