VA nonresident - Tell us more about your 2023 Virginia income

[edwardandsarah]

Hi all,

My wife made $600 in Virginia during 2023 and received a 1099-NEC. She lives full-time in Maryland. 

In the VA state return, it asks me to "tell us more about your 2023 Virginia income."

If you earned Virginia income other than salary or wages, select None of the above. If salary or wages were your only Virginia income, check the box that applies to find out if you qualify for a tax break. 

What do I choose? Is income on the 1099-NEC considered salary or wages? Or do I choose that they lived in Maryland all year? Also, it asks me to choose an option. I did not have an VA income so do I leave the option blank or just choose "none of the above"?

[RobertB4444]

Unfortunately, Self-employment income is not considered wages and income with regards to the reciprocity agreement that Maryland has with Virginia.  

You'll have to check 'None of the above' and walk through the rest of the Virginia tax return to file the 1099-NEC in Virginia.  Then, when filing your Maryland tax return, you will take a credit for the taxes paid to Virginia so that you don't pay taxes on the same income twice.

[Edited 2/20/24  11:58 AM PST]

@edwardandsarah 

[edwardandsarah]

Interesting. There was no income tax taken out of the 1099-NEC. However, I didn’t think 1099-NEC is considered wages or salary income so that’s why it made sense to me to file a VA return. 

[AmyC]

The 1099-NEC reports a variety of items. Often, it is considered self-employment but it can report other things. If it is income from a business pursuit, page 7 of VA Nonresident Instructions state:

If you are a domiciliary resident of Kentucky, Maryland, Pennsylvania, West Virginia or the District of Columbia and have income from Virginia sources other than wages and salaries, (such as business income or gain from the sale of a residence), you must file a Virginia Nonresident Individual Income Tax Return, Form 763, and pay tax on income not specifically exempted above.

[edwardandsarah]

Thanks. 

I have a few questions for the VA 763 form

there are a couple of things I can check at the bottom of the 2nd page:

1. I (we) authorize the Dept. of Taxation to discusss this return with my (our) preparer. 
2. I agree to obtain my Form 1099-G at www.tax.virginia.gov. 

do I check yes for both of them? 

also, do I put my name / my wife’s name as the preparer of the VA state return since it was done in TurboTax? 

lastly, what do I put for these things:

1. Preparer’s pin

2. vendor code

3. filing election code

4. ID theft PIN

do I put anything in those boxes? 

[Opus 17]

Let’s go back and clarify a couple of things.
1. Is your wife self-employed? Or do you at least agree that in this case, the $600 was compensation for work performed in a self-employed capacity, even if she normally works a W-2 job. 

2. Did your wife physically perform this work within the state of Virginia? Or did she perform this work for a Virginia firm but while she was working remotely and not physically located in Virginia?

[edwardandsarah]

Yes, she received the $600 in a self-employment capacity. She lives and works full time in MD. The 1099-NEC was received from Virginia for work she physically did there. 

[Opus 17]

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@edwardandsarah wrote:

Yes, she received the $600 in a self-employment capacity. She lives and works full time in MD. The 1099-NEC was received from Virginia for work she physically did there. 

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OK, if she physically worked in VA, then you at least need to prepare a VA non-resident return to see what, if any, taxes she owes in VA.  MD should give an offsetting credit.  (I just wanted to make sure, if she worked remotely for a VA firm, but did not physically work in VA, it would not be VA income.)

Turbotax is not a paid preparer, your preparer is "self".  (You could also use your own names, but see if "Self" works.)  Authorization to discuss with preparer is irrelevant in that case (they are asking if you authorize discussion with a third party).  Acceptance of electronic 1099-G means that, if you are issued a 1099-G in VA, you would retrieve it electronically instead of having it mailed to you.  You won't likely get a 1099-G since that would be for a state tax refund or state unemployment, but since you live out of state, I would probably leave it unchecked so they have to mail you any forms, that way you won't miss it if there is one.

The other questions are for paid preparers (1-3).  If you had an ID theft pin (4) from the VA tax department, you would already know that, so you don't have one.  

[edwardandsarah]

Thanks. I created a VA state return. Looks like my wife will owe $10 based on the money she made in VA in 2023. I did not claim credit on our joint MD return. If it had been more I would have considered it. I decided to not worry about it.