I moved from DC to Virginia this year. VA won't accept my state tax filing as it won't recognize DC as a state that can claim credit for taxes paid to another state, that I must claim a refund from DC by filling out form D-40B. But I did file a D-40B, why can't I file VA state tax form.
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VA and DC have a reciprocity agreement. If you lived in VA and worked in DC you only pay VA taxes. If you lived in DC and worked in VA you only pay DC taxes. You will only pay state (or DC) taxes on the income earned while you lived in each state (or DC). Therefore there is no credit for taxes paid to another state since there would be no overlap (double taxation).
You need to revisit the "Credit" section in your VA state interview and delete the entries for the "Credit for taxes paid to another state."
If you lived in VA and there were taxes mistakenly withheld for DC on the income earned during that time, that is what the form D-408 is requesting the refund for.
Thank you, but when I click on “credit for tax paid to other states” it literally doesn’t go anywhere. It doesn’t allow me to “revisit” to change the information. Any ideas?
Search for Virginia 1 Virginia Schedule OSC CREDIT FOR TAX PAID TO ANOTHER STATE and delete it.
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