First the easy one. The state taxes shown for your joint federal return do not matter since you are filing separately in the states. The amounts show high because there was no allocation of income between the states. Both states are taxing all income but withholding was only to one state or the other. Again these numbers do matter as you are not filing those joint state returns.
For the MD and VA separate returns. The reciprocal agreement does come into play. Under the agreement you only pay taxes to one state (resident state) even though the income was earned in the other state. Without the agreement in place you would pay taxes in both states but get a credit on your resident state return to mitigate taxes paid to the nonresident state.
First the easy one. For you: Complete a "Mock" federal married filing separate return that will flow to your full-year MD resident return that has only your income and deductions.
Now your wife. Complete a "Mock" federal married filing separate return and indicate her resident state on 31 Dec was MD and she lived in another state (VA) with the date of move entered in the "My Info" section. This will generate a part-year VA and Part-year MD return with only her income/deductions. On each of those part-year returns she will have the opportunity to allocate according to the residence time in each state the income that belongs to each state.
Additionally, since the withholding for VA didn't stop until March 2023, if you want those taxes refunded, your wife will need to file a separate nonresident VA return for 2023 (using "Mock federal separate return again). She will allocate zero to VA since she actually falls under the reciprocal agreement.
In the "My info" section on her 2023 "Mock" return she would be a full-year MD resident but use the "Other State Income" topic to indicate she earned money in another state (VA). This will generate the nonresident forms where she will allocate zero to VA.
@newjackson
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