If I live in NC but work in Virginia do I need to file NC state taxes. I only get a W2 from Virginia?

[codeblue2210]

I work in Virginia but moved to North Carolina in September.  I will file federal but am not sure if I need to file state taxes in Virginia and North Carolina

[MichaelL1 · Accepted solution]

Yes, you will need to file a NC resident return.

You will do the Federal return first, then the non-resident return of Virginia, and then the resident return of North Carolina.

North Carolina will tax you on all your income however you will get a credit for taxes paid to Virginia. 

TurboTax will help you make this process easy for you, just follow the order I showed you. 

[codeblue2210]

Extremely helpful...thank you.  In the future should I have taxes taken out of my pay and sent to North Carolina or just keep it as is (Virginia tax  taken out)?  Again, thank you very much.

[MichaelL1]

Wait until you do your income taxes for 2017 and then see how it comes out.  Some out of state will not withhold taxes to another state, but if you do owe NC, I would ask your employer.

[klepper-danielle]

I am only getting a very small portion of what VA taxed me back as a credit refund. Is this to be expected?

[Tom in Raleigh]

Hi Michelle,

My daughter has this exact problem, but:

** Her residency was NC for only 1 paycheck

** then she officially transferred her residency to VA

** She is getting a relatively large refund from VA

so she is not paying them taxes

** However her employer did withhold taxes as per her W2

Problem - NC is Taxing her at 100% of her income versus the prorated amount

***** I think the issue is that she is not paying any or much tax to get a credit on her NC tax filing

Apologies for all the details.

Any help will be appreciated.

Many thanks, 

Tom