Good day all,
My wife and I are both full-time residents of MD and both work fulltime in MD. In 2023, my wife did a side gig in VA and received a 1099-NEC.
My question - what is the proper way to file the VA state return? From my understanding, 1099-NEC is not considered income or wages. Do I do it married filing jointly? Or married filing separate? If I have to do married filing separate, Turbotax doesn't give me that option as I am filing jointly on my federal.
Please help!
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You are correct the 1099-NEC income is not wages/salary and thus do need to be filed as non-resident in VA. Since you are both VA non-resident and both have income, but only one has VA income, you must file in VA using filing status 4, a separate non-resident VA return. Therefore in TurboTax using a joint federal return does not allow filing status 4, a separate VA return.
In TurboTax the best way to handle filing a federal joint return and a separate non-resident VA return is using a desktop product since several returns can be created in one product. You will create and file your joint federal return and joint MD return. You then create a "Mock" separate return for the spouse with VA source income and only include that spouse's income/deductions on that "Mock" separate return. That "Mock" federal return will not be filed, but is used to create a VA non-resident return with filing status 4 for printing/mailing.
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