Nonresident vs resident tax situation, 2 different states filing

Forum|Forum|2 years ago
March 27, 2024
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Hello,

Thank you for taking the time to assist me with this issue. I'm a resident of MD, and I worked at an office in PA, for part of 2023. These states do have a reciprocity agreement, which I'm not totally clear on. The company I worked for deducted income tax for PA erroneously, until I corrected the issue. Specifically, my W-2 shows $40,000 total federal wages, and then in the state section, $32,000 state wages for MD ($2,450 income tax), and $8,000 ($250 income tax) state wages for PA. I know I'll need to file a $0 income nonresident return for PA (most likely through their state website), but I want to know how to input the correct information for MD. I'll be reporting the $0 income for PA to get the $250 income tax refunded fully, but wasn't sure whether I report $32,000 or the full $40,000 as my state wages for MD. Total federal wages are $40,000, so I should just report that exactly as it is written, for my federal return, correct? Can you please help me with entering the correct information in Turbotax? I believe I should enter the nonresident state first? I can go through the MD or PA state websites if that's easier and only file federal through Turbotax. Thank you for your help!

Vanessa A

You will report the full $40,000 to MD.

You are correct, you will file a $0 return for PA to claim your refund and yes, you can do this through TurboTax or on the MyPath web

site, you will just need to create an account.

Yes, you will report the federal amount as it appears on your W-2. The state amounts will not affect your federal return.

Since you are only filing for PA to claim a refund of taxes withheld in error, it does not matter if you do it first or second as you will not have any income that is double taxed so you will not need any numbers from your PA return to complete your MD return.

You can file through TurboTax for Federal and Both states or you can file using the state websites. Either way, is fine as long as you make sure you get them submitted.

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2023headachesAuthor

Thank you! In order to report that full 40,000 to MD, when I first enter my W-2 into Turbotax, do I just enter the state tax information (boxes 15-17) as it's shown (32,000 for MD, 8,000 for PA wages, and the as-is income taxes), and correct it on the state sections (or leave it be and go through the separate state websites for those returns)? Or do I initially enter it as 40,000 for MD wages, 0 for PA, but leave the income taxes as they're listed, on the W-2?