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June 5, 2019
Question

I lived in VA and worked in MD in 2016. I shouldn't have paid a single cent to MD for taxes, and I need to know how to fix this situation.

  • June 5, 2019
  • 13 replies
  • 0 views
I received a letter from the VA tax department saying I owe $1000+ in taxes. After going back and forth, they figured out my situation: There is a law that states if I live in VA and work in MD, all taxes are due to VA, and $0 are due to MD. Unfortunately, either the way I filed with TurboTax, or TurboTax themselves, provided no way for this to accurately be applied. I need to know how to amend this situation, get a refund from MD (don't know why they haven't refunded it by now since it's a pretty clear error for them), and refile for both VA and MD with correct 2016 tax year forms.

13 replies

Employee
June 5, 2019
Did you have Maryland withholding?
DoninGA
Employee
June 5, 2019
In the Personal Info section of the program you were asked specifically for your resident state and if you earned money in any other states.  You should have indicated that your resident state was Virginia and that you earned money in Maryland.
The program would have had you file both a VA and MD state tax return based on the income and taxes you paid to either or both states.
Additionally, you should have given your Maryland employer Form MW507 Employee’s Maryland Withholding Exemption Certificate to exempt you from paying MD state income taxes - <a rel="nofollow" target="_blank" href="http://forms.marylandtaxes.com/current_forms/mw507.pdf">http://forms.marylandtaxes.com/current_forms/mw507.pdf</a>
June 5, 2019
I did indeed indicate that I lived in VA and worked in MD. I don't recall any time that allowed me to enter a Form MW507 or told me I need to do so. I also worked in VA as well for a large portion of 2016 and made sure that I filled in those fields when filing.
DoninGA
Employee
June 5, 2019
Was the MD state form e-filed and accepted by the state?  Use this TurboTax website to check the status of an e-filed return and if it was either accepted or rejected - <a rel="nofollow" target="_blank" href="https://turbotax.intuit.com/tax-tools/efile-status-lookup/">https://turbotax.intuit.com/tax-tools/efile-status-lookup/</a>
If accepted by the state and the MD return showed a state tax refund what is the status of the MD state refund - <a rel="nofollow" target="_blank" href="https://ttlc.intuit.com/questions/2896714-how-do-i-track-my-maryland-tax-refund">https://ttlc.intuit.com/questions/2896714-how-do-i-track-my-maryland-tax-refund</a>
The Maryland Form MW507 is not included in the TurboTax program.  That is something that you as the employee have to give to the MD employer.  Your employer should have also told you about this exemption if they knew that you were a VA resident.
June 5, 2019
Unfortunately when I click on the link to lookup, it gives me an error status 2000 page. However, on my profile, I can see that Federal, MD, and VA taxes all have an accepted status. The Form MW507 looks familiar, but I think I filled it out after I had done my taxes. My employer isn't very fast about these things given I had lived in VA since the December of 2015.
Employee
June 5, 2019
Next year, if your only MD income is wages and no MD taxes were withheld (that's what MW507 does for you as DoninGA mentions), in Personal Info tell TT that you didn't make money in any other state (since MD can't tax your wages as a VA resident). In fact, don't mention MD to TT at all. Selecting *Yes* to "making money in any other state" tells TT that you need to file a nonresident return for that state.
Hal_Al
Employee
June 5, 2019
In the personal info section, when it asks if you made money in another state, answer NO, per the reciprocal state instructions, on that page. This will prevent TurboTax from thinking you need to file a MD return.
Employee
June 5, 2019
If the taxpayer wants a refund from MD, then it sounds like they never filed the proper form with their employer, and as a result they had MD tax withheld.  My understanding is that in that case, they must file 2 returns and can't apply the reciprocity agreement for that year.

They need to file the form and make it effective for January 1, 2018, and file 2 state returns for 2016 and 2017.
Employee
June 5, 2019
I also don't know any way of invoking the reciprocity agreement retroactively.  But even if there is, MD won't refund your MD tax paid until you file the proper forms with them (assuming there is a form -- I don't think there is.  I think you need to use method 1 and get that straightened out.)
Hal_Al
Employee
June 5, 2019
I read it that his employer properly did not withhold any MD tax. He accidentally filed an MD return and paid tax. He needs to file an amended return to get that refunded