My friend drove Uber, lives in MD and received unemployment from VA

[kamranhg]

   My friend resides in MD and got unemployment from VA. He used to be an Uber driver. In which state he has to file his taxes?

[KathrynG3]

Your friend could owe tax in both states depending on each state requirements. TurboTax will tell you if it is necessary and the state can be removed if you do not need it.

In Virginia, there could be tax on the unemployment compensation received from Virginia.

In Maryland, he should file state taxes because he lives there now. He will get a credit for any taxes paid to Virginia. 

Start with completing Virginia, then add Maryland if he lived in Maryland on December 31.

For more information, see: How do I allocate (split) income for a part-year state return?

How do I import my income information from Uber? which also has a link to how to enter any expenses and handle the Uber Tax Summary, too.

[kamranhg]

@KathrynG3Thanks for your reply. I believe, these two states have reciprocity arrangements in place. Does he have to file a non resident VA return plus a resident MD return?

[KathrynG3 · Accepted solution]

You are correct, Maryland does have a reciprocal agreement with Virginia.

There would only be a filing requirement in Virginia if taxes were withheld by Virginia. By filing in Virginia, any amount withheld would be refunded. Then, the full tax would be paid in Maryland.

• See 2020 Maryland Resident Booklet page 24, bottom of the first column under instructions for Line 23. If there is has been an underpayment in Maryland, enter Code 302 on Line 23 if 90% of the taxable income was taxably by another state and the underpayment is not greater than the local tax.
   
• See page 25: 26 SPECIAL INSTRUCTIONS FOR PART-YEAR RESIDENTS. Your return must show all income reported on your federal return, regardless of when or where earned. However, you are permitted to subtract income received when not a resident of Maryland. The following instructions describe the adjustments which must be made for a part-year resident return.

However, if Form VA-4 was sent to Uber, then only file Maryland income tax.

For more information, see: When would I have to file returns in more than one state?