My wife and I both live and work in DC, but the address on her W2 is an old address, in MD. How do I solve this? Clearly MD has withheld taxes, but those funds need to be returned entirely and we need to pay taxes in DC. I know we need to file state taxes in DC, but have no clue how to get the funds back from MD. Does anyone know how to solve this?
You will need to file an MD nonresident return and allocate zero income to MD. This will refund the withholding. Be sure to update the state withholding with your employer to stop MD and start DC withholding.
In the "My Info" section scroll down to "Other State Income" and indicate you earned income in another state and select MD. This will generate the nonresident forms. In the MD interview you will be asked to allocate each of the income sources. Allocate zero to MD.
Thanks for this quick response. How do I handle the DC portion?
You will file a resident return for DC. If for some reason MD non-resident return doesn't refund the taxes withheld entirety you will claim a credit for taxes paid to another state. For more information, see the link below:
In the Personal Info section of TT, enter DC as the State of Residence for both you and your wife. The program will generate a DC tax return. Assuming you and your wife were DC residents all of 2022, ALL of your income is taxable by DC.