Moved from Maryland to DC halfway through the year

[Marian7]

I moved from Maryland to DC in November 2020 however my employer only withheld taxed from DC. I'm confused on how to complete my return and not having much luck trying to figure it out on my own on the comptroller website. The previous year, 2019, I lived in Maryland for the entire year but paid taxes to DC through my employer so it was much easier and I filed a non-resident return but now I'm running into a bunch of issues. I paid to DC only in 2020 (whole year, both years), and am expected to get a $10 refund, however its also saying that I owe over to 3K to the state of maryland as well.

Do I need to file a 502 (due to the change in residency) AND a 502CR form for Maryland? Also, If I file a 502CR form for Maryland would it take into account my partial residency for the year or just say that I don't owe anything since I paid to DC?

[JotikaT2]

You will need to file two part-year resident returns.

Since you resided in Maryland until November 2020, you need to file your Maryland state return as a part-year resident for that period of time.  Your employer should have been withholding taxes in Maryland only at this time. In 2020, D.C. was operating under state reciprocity for any nonresidents only working in D.C. but residing in another state.  This means that your income was only taxed in your resident state while you lived in Maryland but worked in D.C.

State reciprocal agreements

Once you move to D.C., your employer should have been withholding taxes only in D.C. and not in Maryland anymore.

Since you had taxes withheld in D.C. while you were a resident of Maryland, you will need to report your taxes paid to another state on Form 502CR as you mentioned above.  This will ensure you get credit for any taxes paid and reported in D.C. while you were still a resident of Maryland and ensures you are not taxed twice on the same income.  You will still be taxed on the income earned while a nonresident of D.C. but any income taxed in both jurisdictions will then be offset by the credit on your Maryland return.

Also, yes you would report your taxes on Form 502 but the section for Part-year resident will be completed on your 2020 income tax return.

[Marian7]

Thank you for your reply. I do want to clarify that my employer never withheld taxes in Maryland at all even when I lived in Maryland. The entire 2020 tax year they only withheld for DC as the company has people who work in VA, Delaware, DC, as well as other states working remotely so they just withhold for DC only for everyone. That being said, does everything you’ve said in your reply still apply? 

[JotikaT2]

Yes, it does. 

Please see the excerpt from the instructions for the DC Income tax return as far as who is required to file a tax return there.  The only exception to the information posted above would involved filing the DC return to get a refund for any withholdings made by your employer or if you maintained a place of residence within DC.

I have also included the link to the full instructions for DC below for your reference.

District of Columbia income tax form instructions