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New Member
posted Jun 3, 2019 1:51:10 PM

If I live in DC, and work in MD, why do I owe MD state tax?

0 8 13117
8 Replies
Level 1
Jun 3, 2019 1:51:11 PM

No.  Your W2 should tell you which state taxes were withheld for (in box 15).  Since you live in DC, this should be DC and you then only need to file DC taxes.

"If you work in Maryland but reside in a reciprocal tax state (Pennsylvania, Virginia, West Virginia or Washington, D.C.), and your only income from a Maryland source is wages, you can be exempt from Maryland income tax and Maryland withholding tax on those wages."

Source: http://taxes.marylandtaxes.com/Individual_Taxes/Individual_Tax_Types/Income_Tax/Filing_Information/D...

Level 1
Mar 1, 2023 10:06:51 AM

What if i moved from DC to maryland 3/25/2022 but worked in maryland the whole year. I had previously been living in dc the whole year and still working in maryland 

Expert Alumni
Mar 1, 2023 10:36:37 AM

Since you changed your resident state you will be filing a part-year return for DC and one for MD.  On the DC return you will be taxed for the portion of the MD wages paid while a resident in DC from 1/1 to 3/25 (83 days).  On the MD return you will be taxed on the wages from 3/25 to 12/31 (282 days).  Divide the income by 365 and multiply by the number of days in each respective state. 

 

Ideally, your W2 should show two state lines with wages and withholding for both MD and DC.  Enter the W2 just as it indicates.  You can adjust in the state interview if it is off.  If there was zero withholding for one of the states then you may owe taxes to that state when filing.  

 

In each state return you will be asked to allocate the income.   To generate the part-year returns indicate in the "My info" section that your resident state on 31 Dec was MD and you lived in another state (DC).  

 

If there has been no MD withholding be sure to submit a new state withholding form to get that started going forward.

Level 1
Mar 1, 2023 11:13:02 AM

Which box do i divide my income by 365? Thank you!

Level 1
Mar 1, 2023 11:14:22 AM

only maryland withheld taxes since previously i lived in dc and worked in maryland and they had reciprocity

Expert Alumni
Mar 1, 2023 12:04:46 PM

To prepare the part-year resident returns for both states, in your "personal information section", make sure you enter the date you moved to MD which will carryforward to MD return. While completing the DC return, you will be asked to verify the dates of residency. See the screenshot below.

Continue through the interview for DC  to the Section "Enter any income while residing outside of DC. If none, enter zero. For this section review your W-2s for each State. If only one W-2 was received you will do the allocation in this section.

 

Similarly, when filing MD you will confirm the part-year resident information per the screenshot below: This section will also show the date you moved from DC. Continue through the interview to "Additional Info for Part-Year Residents".  As a part-year resident, you don't have to pay taxes to Maryland on income received while you were a non-resident of another state. This is where you will enter the income earned in DC (the number of DC Days/365) multiplied by W-2 Income.

 

  1. Non-Maryland Income
  • Non-Maryland Losses and Adjustments

@schwartzhannahg123 

 

[Edited 3/2/2023| 8:56AM PST] @schwartzhannahg123 

 

Level 1
Mar 1, 2023 4:26:22 PM

So what do I put for subtractions from federal income, part year? Enter any income received while residing outside DC. If none, enter zero 

Expert Alumni
Mar 1, 2023 5:08:57 PM

Correction, DC instructions requires you to file a return when you move in or out of the state. You will enter income earned while living there. DC Form shows line 8 of subtractions of income earned while nonresident. Finally, a credit for what was paid to MD.

@schwartzhannahg123 

 

[Edited 3/2/2023| 8:19 am PST]

@schwartzhannahg123 You will have no DC tax but the moving requirement does affect you.