I know that I will have to pay NY state taxes because of how handles taxes based on my employer being there.
So I would first file a NY state non-resident tax form, and pay NY state taxes. Then I would file a DC resident state tax form. Is that correct?
Would I get credit in DC for 100% of the state taxes I paid in NY? I want to be sure I won't get double-taxed on the same income.
Thanks in advance!
Yes, do the two states in the order you suggest, then look at line 1 of Schedule U on your DC return and see if your New York state taxes appear there as a credit in DC.
...........but, 100%credit ?....perhaps not. DC would allow a credit of "up-to" what DC would have charged for the same income. So if NY is taxing at 6.2% and DC is taxing at 4%, DC would only allow a 4% credit.
But that really depends on what the total double-taxed portion of your income is, because DC and NY have progressive rates: NY is 6.21% to 8.82%, and DC is 4% to 8.5% over differing income ranges.....which is why the software is needed to puzzle it all out.