What if I moved from one state (CO) to another state (MD) but my employer is in a 3rd state (MA)? My w-2 only has state taxes going to Colorado. Do I need to pay MD?

[LenaH]

Yes. You will need to file two part-year resident returns - one for Colorado and one for Maryland. 

You must prorate the amount of wages earned between the time you were in Colorado and the time you were in Maryland. You will likely get a refund from Colorado and pay Maryland their portion of taxes for the time you earned wages there. 

In addition, have you always telecommuted for work or is this due to Covid? Under the Massachusetts telecommuting rules, which were effective beginning March 10, 2020, wages paid to a non-resident employee who worked remotely (i.e., working from home or a location other than their usual work location) because of the COVID-19 pandemic were sourced based on where the employee worked prior to the state of emergency. Effective September 13, 2021, wages will generally be sourced based on where the employee’s work is actually performed. 

Therefore, if you are telecommuting due to Covid, then for the period of January 1-September 12, 2021, you would have sourced income from Massachusetts. You would have to file a nonresident Massachusetts return with sourced income between those dates. Then, you will pay Colorado and Maryland tax, but get a credit of taxes paid on your two part-year resident returns. 

[edowl]

My w-2 has all things going to CO. Is there somewhere on turbotax that helps me prorate? 

[LenaH]

When you start your Colorado return, change the return to a part-year resident return. Then, TurboTax will ask you the dates of residency. You will have to allocate your wages based on a percentage or number of days you were a Colorado resident. 

For example, as shown in the screenshot below, total wages in this example were $150,000. If I lived in Colorado for half the year and moved on 6/30/2021, 50% of those wages should be sourced to Colorado. Therefore, I would enter $75,000 in the box. 

Maryland will show you the same prorated screens. Please ensure that the amount for Colorado and Maryland equal to the total amount. 

@edowl