Pennsylvanian not getting full credit for Maryland state tax paid

[denise50]

I live in Pennsylvania and work in Maryland and, mistakenly, had Maryland taxes withheld.  When filing my PA taxes, I want to take full credit for my MD taxes and this is no problem.  But when completing the MD 505 and MD 505NR, it calculates only a partial refund of the overpayment made.  Can I get the difference between what I paid to MD and what I owe PA since these states have tax reciprocation?

[DanielV01 · Accepted solution]

You need to change how you are claiming this.  You do not claim a credit for taxes paid to another state.  Rather, you claim all of the income to PA, and pay PA tax on the income.  When you prepare the Maryland return, you will see a box that discusses mistaken withholdings.  You will select this box so that the Maryland taxes withheld are fully refunded, but then you do pay tax to PA.