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slkortiz
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Do we have to pay tax in MD? My husband lived, and worked in VA in 2023. He also earned in MD while living in VA in 2023. Reciprocity exists between MD and VA.

I thought we would not owe tax in MD due to the reciprocity agreement between the two states but TurboTax insists we do have to pay in MD. If so, we owe a penalty for not having MD tax withheld in 2023.
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3 Replies

Do we have to pay tax in MD? My husband lived, and worked in VA in 2023. He also earned in MD while living in VA in 2023. Reciprocity exists between MD and VA.

@slkortiz 

1)  IF his W-2 only shows VA withholding, then you do NOT file a MD tax return.

On the My Info page you would NOT indicate he worked in another state. (MD).because his working there is treated As-If he only worked in VA.   Then delete the MD tax return.

 

2) If his employer DID withhold MD taxes (it shouldn't have), then you do have to file a MD non-resident tax return, but indicate zero MD wages to get that withholding back.

____________________________

The only other reason to file MD nonresident is is you own a property in MD that you rent out and receive income from, or work a self-employed 1099-NEC job physically within MD.

____________*Answers are correct to the best of my knowledge when posted, but should not be considered to be legal or official tax advice.*
slkortiz
New Member

Do we have to pay tax in MD? My husband lived, and worked in VA in 2023. He also earned in MD while living in VA in 2023. Reciprocity exists between MD and VA.

That's what I thought but then Turbo Tax insisted I had to file a MD tax return even though his income is our only connection to MD. I thought Turbo Tax would recognize that it was a case of reciprocity, or at least ask about it. They even have a list of states with reciprocity but they don't tell you how to answer the "income from other states" question if there's reciprocity. I nearly wrote a check for money due to MD since it would have been due Monday and needed to be mailed today (Saturday). Hopefully, they sort this out for years going forward. I know we're not the only family with someone working across state lines. 

Do we have to pay tax in MD? My husband lived, and worked in VA in 2023. He also earned in MD while living in VA in 2023. Reciprocity exists between MD and VA.

TTX only insists you prepare a MD tax return,

1)   On the My info page if you indicated that one of you worked or had income in another state.

or

2) IF there is a MD state line entered on the W-2 form.

 

Try to remember those two things.  Not sure what will be done with the software, but some VA residents do have rental properties on the MD shore...or own a personal business operation in MD, or work as self-employed folks (construction, painting, appliance services, etc) and they do have to file there.

____________*Answers are correct to the best of my knowledge when posted, but should not be considered to be legal or official tax advice.*
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