Old job taking out taxes for wrong state...

[sstewa58]

I got a new job last year, but my old job was taking MD taxes out despite me asking them to change my address to VA.  When filing my state taxes through TurboTax, my VA state tax looks like I owe a huge amount, almost as if I'd not paid taxes all 2021. That said, the W2 from my old job shows that taxes were withheld for MD when they should have been taken out for VA.  Because of the overly high VA tax, I didn't file yet. I'm told there's another form I have to submit? What should I do?

[LenaH]

Can you clarify when you moved to Virginia?  

[sstewa58]

I moved to  VA in late 2020, I made the change to my job as soon as I moved, but I didn't see that they didn't have the right state until I switched jobs and got the W2 for 2021

[ThomasM125]

When you file your Virginia return, you will see an option for a Credit for Taxes paid to Another State. When you complete that section, your Virginia tax will be adjusted for income taxed in both states and that should reduce your Virginia tax to compensate for the taxes paid to Maryland. I believe that is the other form you are referring to.

[sstewa58]

Hi, so I ended up calling, and going over this section of the form, and I couldn't see anything with that name. The woman I called was very nice. But unfortunately, she didn't know what form I was referring to, I combed through the VA filing section twice and couldn't find it.

I know this is a bit later, but if you could help out I'd appreciate it!

[AnnetteB6]

If you were a resident of VA and worked in VA for the entire year of 2021, but your employer withheld MD taxes in error, then you will need to file a non-resident return for MD in order to get a refund of those withholdings.  In this particular case, you will not get any credit on your VA return for taxes paid to another state, because you will not be paying taxes to MD.  

The credit for taxes paid to another state would only apply if you actually owed some taxes to the other state because you worked in the other state while living in your resident state.  

@sstewa58

[Rick19744]

@sstewa58 your issue will be mitigated if you file correctly.

You need to be filing two part-year resident tax returns; one for MD and one for VA.

What this will do is apportion your wages to the appropriate state based on your residency in each state.

While you may owe some VA tax due to the fact that withholding was not done correctly, it should minimize the VA tax significantly.