Live in VA, physically worked in MD for part of 2022, then switched to a remote job - how to file state tax return?

[doumae]

Hi,

I have a question about filing my state tax return next year. I live in VA. I was physically working on-site in MD for part of 2022, then switched to a remote job. Currently I work for another organization that is physically located in MD but I work from home in VA. I know that there is reciprocity between MD and VA but for the past few years TurboTax kept prompting me to complete my MD return even though I didn't need it. Is my "work" address considered VA or MD for this new remote job? And how does that factor into how I file my state tax return next year?

Thanks so much! I am definitely not a tax expert so I would appreciate any advice. 🙂

[Bsch4477]

After completing your federal return complete a part time resident of MD return and lastly your resident VA return. 

[doumae]

Thank you for the response. Is there a reason I need to complete a part time resident of MD return when I have never lived in that state?

[Bsch4477]

You posted “. I was physically working on-site in MD for part of 2022”

[SteamTrain]

NO.. I disagree.

As a full year VA resident, crossing the border daily/weekly/occasionally to work in MD, ,,,,,,,and due to those two states being reciprocal tax states:

IF you are a W-2 employee of the MD company, and they either:

a) withhold VA taxes, or

b) no state taxes at all  (as noted on yoru W-2 forms).

....then you do not file a MD tax return at all. 

You would only file a MD Nonresident tax return if MD taxes were accidentally withheld for that W-2....and only to get the MD taxes refunded.

And if you are now,  or occasionally Working from home, remotely...that is also is just VA income.

_______________

The issue with TTX having you prepare a MD tax form (when no MD taxes were withheld) was likely the result of you indicating you worked in another state during the year.  For reciprocal tax states, you don't indicate you worked in MD....as yoru W-2 income is treated "as if" you only worked in VA.   (now, if you had a self-employed 1099-NEC job where you worked that job in MD, or own a rental property in MD, then you might need a MD non-resident tax return for that income)

[TomD8]

I agree with @SteamTrain.

The VA-MD reciprocity agreement states that Virginia residents who:

• Work in Maryland, Pennsylvania, or West Virginia, are exempt from taxation in their respective state if:
  • They are present in the other state for 183 days or less during the year, and
  • Do not maintain an abode, such as a house or apartment, in their respective state and
  • Receive only wage or salary income in the other state
  • https://www.tax.virginia.gov/reciprocity

Therefore, if you meet those criteria, there is no need for you to file an MD tax return.  In that case, in the Personal Info section of TurboTax you would answer No the question about having income from another state. (Answering No will prevent the program from incorrectly generating an MD tax return.)   Your income would be taxable only by your home state of VA.  Additionally, if you haven't already done so, you should file MD Form MW507 with your MD employer so that MD taxes will not be incorrectly withheld from your pay.

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