Live in MD but work in VA

[cek20]

I am moving to Maryland but will commute to VA each day for work. I understand these 2 states have a reciprocity agreement, and that I will pay MD income tax instead of VA income tax. My employer is telling me that I can update line 3 of my VA-4 to show that I am not subject to VA withholding, but that they (my employer) does not have the ability to deduct MD taxes from my paychecks. I am not sure what to do. How can I ensure that I am paying the correct taxes to MD?

[KeshaH]

You will need to make estimated tax payments to the state of MD to avoid an underpayment penalty.

You can use TurboTax to calculate your MD estimated tax payments. After you file your 2024 returns, you can go back to TurboTax and add Maryland as a state. (You can do this before you file, but just be sure to not file the Maryland return.)

Go through the screens until you get to a screen that says A few things before we wrap up your taxes. Click Start next to Estimated and Local Taxes. Select yes, that you want to work on 2025 estimated state taxes. On the next screen, you'll be asked to enter your estimate of your 2025 Maryland income. 

If you expect to earn the same amount of income in 2025 as you did in 2024, you can enter the same numbers from the 2024 column into the 2025 column. Otherwise, make the necessary adjustments.

Continue through the estimated tax screens, answering the questions appropriately based on your tax situation. At the end, TurboTax will tell you how much your estimated payments should be for each quarter.

[cek20]

Thank you so much! This was incredibly helpful. After a ton of digging, I finally found information similar to what you shared with me on the MD Tax website. It said the same thing - I will need to make quarterly estimated payments. Thank you again!!