Iiving in PA but working in MD

[yoebuff]

I live in PA but work in MD.  I had worked for two employers.  One employer took MD state taxes off my paycheck, no PA taxes.  The other employer took no MD state tax but did take PA taxes off.  How do I get the refund back from MD where the one employer took off MD taxes?   I will need that money to pay my what I still owe in PA.   The turbotax program I am using asks for an exemption code at the end, as to why I am claiming zero for income.  what code should I use?

[DoninGA]

You have to report the income that you received in Maryland on a nonresident Maryland state tax return.  You report on your resident Pennsylvania tax return all income from all sources.

In the My Info or Personal Info section of the program you should have entered Pennsylvania as your resident state.  When asked if you made money in other states you should have indicated Yes and then select Maryland as that state.

In the State section of the program you should complete the nonresident Maryland state tax return first so that any MD state taxes paid will be entered on your PA resident return as a tax credit.

[TomD8 · Accepted solution]

MD and PA have tax reciprocity for W2 income.  That means that PA residents are not subject to MD income tax on their W2 earnings. You should file MD Form MW507 with your MD employers so that MD taxes will not be withheld from your pay.

Here's a link to that form:

https://www.marylandtaxes.gov/forms/current_forms/mw507.pdf

In order to obtain a refund of the incorrectly withheld MD taxes, submit a non-resident MD tax return on which you show the MD withholding but allocate zero income to MD.

You are not entitled to an "other state credit" on your PA return because in fact you owe zero in MD taxes.

Note: my answer assumes that you have no MD-source income other than from your jobs.