W-4 state equivalents, moved to another state in 2024

[Karen Law Librarian]

Hello. I moved from Maryland to Virginia a few weeks ago. In Maryland I always ended up owing taxes because the local 3.5% County tax wasn’t added in my withholding for some reason. I don’t believe there is a local tax in the county I moved to, but I’m trying to predict how much I will owe in state taxes next year. I placed one exemption on my Virginia form.

[FranklinF]

FIRSTLY, I am assuming that you are ok with your Federal Tax Withholdings, since there is no mention of the latter in your question. However, if you would like to review this matter, you may obtain further information by clicking on the link below:
Underpayment Penalty 

SECONDLY, let us explore a few scenarios:

• Lived and worked in Maryland, then MOVED to Virginia, and lived and worked in Virginia.
  You will be a part-year resident of MD and a part-year resident of VA and ALL your income (not only from your jobs) will be prorated accordingly.
  
  
• Lived and worked in Maryland, then MOVED to Virginia, but remained working in Maryland
  You will be a part-year resident of MD and a part-year resident of VA.  While a MD resident you will file a MD part-year resident Tax Return. Also, you will fill out a VA part-year resident Tax Return taking into account the Tax Reciprocity agreement between MD and VA. Now because of Tax reciprocity between MD and VA, the MD wages are NOT subject to MD income Tax but rather to VA.  Tax reciprocity applies only to W-2 wages, not to other types of income. You will fill out Form MW-507 to inform your MD employer that you are a VA resident and not subject to MD withholding. 

MD LOCAL INCOME TAX RATES
MD Local Income Taxes
Per the Comptroller of Maryland "2023 Maryland Income Tax Rates. Maryland's 23 counties and Baltimore City levy a local income tax which we collect on the state income tax return as a convenience for local governments. The local income tax is calculated as a percentage of your taxable income" 

Contact your MD employer to make arrangements to adjust your local withholdings if you believe that the current local withholdings per pay period will be insufficient when you file your MD Taxes. OR DIRECTLY contact the Locality to make arrangements.


VA LOCAL INCOME TAX RATES
Virginia does not allow the collection of local income taxes. Localities collect taxes taxes through sales and property taxes and on state and federal funds.
VA Retail Sales and Use Tax 

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[Karen Law Librarian]

Thank you. Yes, federal withholding makes sense to me. I work in Washington, DC, and I've notified my employer of the address change. Done with Maryland. It's just the last couple of years I ended up owing more to Maryland than I expected, even when withholding extra, predicting it would even out, but I still owed an extra $1000 for 2023. Well, I'll see if Virginia is withholding about 5% when I view my next paycheck and hope for the best next year.