Paid taxes to MD instead of VA. Due to a reciprocating agreement, VA residence don't have to pay taxes to MD. I now owe money to VA for 14, 15, 16. What are my options?

[Anita01 · Accepted solution]

First of all, fill out and give this form to the payroll department or person so you stop having MD tax withheld.

http://forms.marylandtaxes.gov/current_forms/mw507.pdf

Then, file a nonresident MD return with zero income to get back all your tax withheld.  File a resident return for VA and DO NOT take a credit for the tax withheld in MD.  This credit is not allowed when tax was withheld by a reciprocal state.  You won't actually have any double taxed income because you will be getting all the tax back from MD.Simply file as a resident and, yes, you will now owe tax to VA, unfortunately, but you will get back what you paid to MD.  

[Anita01]

Sorry, forgot link to form, added it now:
<a rel="nofollow" target="_blank" href="http://forms.marylandtaxes.gov/current_forms/mw507.pdf">http://forms.marylandtaxes.gov/current_forms...>

[smdieter0]

Thank you so much. So in Turbo tax I need to file an amended return for MD and VA for those 3 years correct? Thanks again.

[Anita01]

I didn't realize these were past years you were asking about.  If so, you would indeed need to file an amended return for each year and each state.  I'm surprised VA has not yet sent you any bills for prior years if you took a credit for tax paid to MD. That's a common mistake made by people in your situation.  Amend instructions:

<a rel="nofollow" target="_blank" href="https://ttlc.intuit.com/questions/1894381-how-to-amend-change-or-correct-a-return-you-already-filed"...>

[smdieter0]

They have just recently sent me 3 bills, one for each year. I had listed (accidentally) my significant others address in Maryland as my mailing address with my employer. This is where the mistake was made. My permanent residence was VA. I had tried to use turbo tax to amend before but I didnt see that I was getting and MD refund. Should I see this? Is there someone that could walk me through one of the years?

[Anita01]

You need to make sure the MD return shows zeroes for MD income.  Correct the Fed information for the states by going to the Personal Info section first and saying you did not live or receive income in MD.  Then go to the MD nonresident return and change the income received in MD to zero. If you were already billed for VA, then you don't need to amend the return, you can just pay what they billed.  It might be best if you waited until after this tax season to ask someone to walk you though this in support, but you can give it a try now.
<a rel="nofollow" target="_blank" href="https://ttlc.intuit.com/replies/3300041">https://ttlc.intuit.com/replies/3300041</a>

[smdieter0]

Understood thank you. Last thing is that my employer was in MD. I'm guessing this has no effect on the above information?

[DeeCee]

I did this and Maryland says they will not give me the money back that I paid them because it has been more than 3 years.   So I paid taxes to Maryland (around $3000) that was to be paid to Virginia. So I paid Virginia and filed to get the money back from MD, they are saying NO. Because it has been more than 3 years.  So, isn't that double taxation?  They were never due the money to start with. Any suggestions?

[TomD8]

@DeeCee   You have the option of disputing MD's decision.  This reference explains the process:  https://taxes.marylandtaxes.gov/Individual_Taxes/Individual_Tax_Compliance/Dispute_It/