Multi-state property and work

[Mr and Mrs B]

I moved from Florida (no state tax) to Virginia (state tax) September 1st. I am renting an apartment in Virginia while working at a federal job in Maryland (state tax), but still own my home in Florida. The FL house remains occupied by my wife. I have been told there is a tax agreement (for federal workers) between the VA, MD, and D.C. areas that allows a person working in one state but living in another only pays tax in accordance with where they live and not where they work. Regarding state tax, I've been led to believe I wouldn't have to pay any MD tax, only VA tax. What is the correct way to file capturing all this?

[AR_CPA2]

Hello Mr. and Mrs. B,

Yes, you are right.  VA has reciprocal agreement with KY, MD, PA, WA, D.C., and WV.  That means you only pay tax to the state where you reside. This agreement is for all taxpayers, not just federal workers.  So your employer should not withhold tax from you for MD, instead they should only withhold for VA. 

Thanks for participating in TurboTax's Ask the Expert event today. I hope this information was helpful!

Have an amazing day.

AR (CPA 10+ years)

[Mr and Mrs B]

Sorry, I probably should have included this as a part 2 in my original post, but i forgot. A couple other questions...

1. I had to buy two new (2024) vehicles this year due to being involved in accidents. Can I claim that to get some sort of tax deduction or tax relief? One car is strictly gas and the other is a gas/electric hybrid.

2. VA seems to tax everything unlike FL. I'm not familiar with what I can and can't claim on my taxes.When I registered the car in VA that I drove from FL, I had to pay property tax. This is a annual recurring fee. Can I claim that for a deduction or some sort of relief?

Thanks!

[gforeman1]

1.   New Vehicles:

• Personal vehicles used to commute to work are generally not tax deductible with the exception of car registration taxes which can be claimed as a part of the Itemized Deduction if you choose it over the Standard Deduction. 
• If you choose to itemize your deductions, you can claim the sales tax paid on the vehicles since it considered a major purchase.  It is important to understand that if your state income taxes paid are more than the registration taxes and sales tax, you would use the higher amount to a maximum of $10,000. Click here for an article with a great example.
• For the Hybrid vehicle, you can check online to see if it qualifies for a tax credit at https://fueleconomy.gov/feg/taxcenter.shtml

2.  Annual Registration Fee:

• As mentioned above, you can claim the car registration fees if you itemize your deductions. The portion of your annual registration fees that is considered deductible is the amount which based on the value of the vehicle. Click here link with more information. 
• VA car registration fees includes multiple factors including vehicle weight, type, and other factors. You would need to determine the portion of the fee that is deductible from your annual bill.