Owing taxes in a state I don't live?

[phunluvin82]

Anytime I've lived/worked in different states, I've usually had to pay both states. I just remember in college, I would work while in school, and then work in a different state when I was home for the summer...and I always had to pay taxes in both states.

Your withholdings and everything are exactly the same? It is possible that they changed the state tax rate and now you owe? Or is it possible that you were really supposed to pay last year, but didn't? IDK.

[Deleted]

My husband used to work at a client's office in NJ often enough that we owed money there. His company would include NJ stuff on his W2 so we knew we had to file. I don't know what the threshold is to have to file in a state, but if you work there enough you'll have to file even if you don't live there, don't work there most of the time, and don't even have an office there.

But we could take that amount off of our NY taxes, so I don't know that we ended up owing overall. It was more of an inconvenience to do the extra return by hand.

Oh, and he fucked it the NY/NJ balance in 2009 so we got audited recently and had to pay a penalty. Oh well.

[phunluvin82]

Jan 28, 2013 20:09:40 GMT -5 swizz said:

Jan 28, 2013 20:06:16 GMT -5 phunluvin82 said:

Anytime I've lived/worked in different states, I've usually had to pay both states. I just remember in college, I would work while in school, and then work in a different state when I was home for the summer...and I always had to pay taxes in both states.

Your withholdings and everything are exactly the same? It is possible that they changed the state tax rate and now you owe? Or is it possible that you were really supposed to pay last year, but didn't? IDK.

Withholdings are the same, literally everything is the same.

I guess maybe they changed the tax laws or something, but $350 on our income seems weird (considering that I had no MD taxes withheld?) I doubt I owed it last year and didn't pay, because I do everything in TurboTax (have for years) and this just popped up without me doing anything.

That IS weird...IDK!

[lagom]

From the MD comptroller site:

"If you are a nonresident who works in Maryland and/or derives other income from a Maryland source, you are subject to Maryland's income tax rates as well as the special nonresident tax rate of 1.25 percent. For more information about the filing requirements for nonresidents, see the instructions in the Maryland nonresident tax booklet."

[mlvmd]

I have not heard anything about the reciprocity laws in DC/VA/MD changing. I'm pretty sure you are exempt. There was a year DC made me file saying that I didn't live there anymore and therefore didn't owe anything (I work there). It was annoying filling out the form but it was worth the piece of mind to convince them I in fact did not owe anything.

[rupertpenny]

I am not an expert or anything but my understanding is that people in DMV only pay where they live. My H and I both used to live in VA and work in DC and we never owed anything to DC. I would definitely investigate this further and maybe try to run your return though another tax preparation website and see if you get a different result.

[sillygoosegirl]

My prior experience is that you have to pay tax to both states. Last year we filed CA non-resident taxes and basically since 60% of our income was earned in CA, we had to pay CA 60% of what our taxes would have been if we lived and worked only in CA. OR gave us a credit for the tax paid to CA, so our total tax was exactly what it would have been if we both lived and worked in OR, it was just 6x more paperwork. It seemed pretty straightforward in the end actually. Or at least that's what I understood at the time.

I decided to try to use Turbo Tax this year, and it can't seem to figure it out for me. I'm stuck on my OR taxes at a question where it wants to know my final tax to CA. And I'm stuck at a question on my CA taxes where it wants to know my final tax to OR. WTF? I thought Turbo Tax was supposed to be smarter than that. This might be the year we finally hire somebody. Or maybe we will go back to doing it by hand.

[mrsfarmer]

I don't think you do:

business.marylandtaxes.com/filinginfo/withholding/nrincometaxrate.asp

[mrsfarmer]

I have had other issues w/turbo tax not understanding tax law. Try running it on tax act. My link above has a section for Virginia residents.

[mrsfarmer]

I had an issue with them with the adoption tax credit. Their system could not handle one section of it which made us eligible.

[heliocentric]

I live in NJ and work in MD. I pay taxes to MD and NJ gives me a credit for them. I have to file in both States and get 2 different W2s even though my job doesn't pay taxes to NJ on my behalf. VA and MD might have a different set up, though.

[Velvetshady]

Jan 28, 2013 20:19:44 GMT -5 swizz said:

Okay, but the previous paragraph says I'm not required to file as a nonresident since I live in VA, so wouldn't I be thus exempt from the "special" 1.25% tax?

individuals.marylandtaxes.com/filinginfo/nonresident.asp

You should not have to pay anything to MD. MD, DC, and VA have a tax reciprocity agreement where no one living in those three and working in the other has to pay taxes to their non-home state.

If you think of how a lot of people live and work in this area, it would be a nightmare to sort it out--I've had many years where I lived in VA and worked some of the time in our DC office, two different MD offices, and three different VA offices. Pretty much depends what meetings I had on the day and many days I'd be in two different states for different parts of the day. Absolutely no way to track this and ensure the taxes would be correct.

[lemon]

Try Tax Act. Last year, Turbo Tax couldn't seem to get my multiple state returns correct, but Tax Act did. I've learned that Turbo Tax kind of sucks at some things and from now on, I will always run mine through both programs.

[cjeanette]

We have owed MO in the past and it varied from year to year. I am glad we both work in KS now. Owing one state is enough.

Sent from my SPH-L710 using proboards

[litasail]

Pretty sure that's an error, given the special relationship between our states.

"Washington, D.C., Pennsylvania and Virginia residents

Residents of the District of Columbia, Pennsylvania and Virginia who did not maintain a place of abode in Maryland for more than six months (183 days or more), are exempt from withholding of Maryland tax on Maryland wages and salary by the authority of a reciprocity agreement between Maryland and these jurisdictions."

[LoveTrains]

Jan 28, 2013 20:54:12 GMT -5 heliocentric said:

I live in NJ and work in MD. I pay taxes to MD and NJ gives me a credit for them. I have to file in both States and get 2 different W2s even though my job doesn't pay taxes to NJ on my behalf. VA and MD might have a different set up, though.

This is how it works for us. We live in RI but H works in Mass. His work withholds Mass taxes. I do the Mass taxes first and we pay the nonresident rate.
Then I do the RI taxes and we get a credit for what I paid in MAss.

[Raggedeannie]

Jan 28, 2013 22:04:15 GMT -5 lemon said:

Try Tax Act. Last year, Turbo Tax couldn't seem to get my multiple state returns correct, but Tax Act did. I've learned that Turbo Tax kind of sucks at some things and from now on, I will always run mine through both programs.

I had to file a multi-state return a couple of years ago when I lived 5 months in DC and the other 7 in Virginia, and TurboTax's online software couldn't handle it.  The TT forum advised me to get the desktop version and file that way.  Not sure what the best software out there is now, but I agree that TurboTax online has a bad reputation for multi-state returns.

[orval]

My sister lives and works in Illinois but has to pay MD taxes as her company/job is based there though she has never been to the offices there.

[Deleted]

Jan 28, 2013 23:34:10 GMT -5 LoveTrains said:

Jan 28, 2013 20:54:12 GMT -5 heliocentric said:

I live in NJ and work in MD. I pay taxes to MD and NJ gives me a credit for them. I have to file in both States and get 2 different W2s even though my job doesn't pay taxes to NJ on my behalf. VA and MD might have a different set up, though.

This is how it works for us. We live in RI but H works in Mass. His work withholds Mass taxes. I do the Mass taxes first and we pay the nonresident rate.
Then I do the RI taxes and we get a credit for what I paid in MAss.

Same thing with PA and NJ.  Although when I worked for the Commonwealth, they withheld my NJ taxes for me. 

[ebeth]

meethinks turbotax is confused.

I have worked in MD the entire time I've lived in DC and I've never paid taxes there. just DC income tax. my CWs who live in VA and work in MD have never paid MD taxes.

if something changed this year and suddenly everyone who works in MD had to pay MD some monies, however minimal, it would be all over the news and people would be pissed.

[Deleted]

Turbo Tax is horrible when it comes to living/working in seperate states. Every year it tells me I need to file a return in the state where I work. I only pay local city taxes in the state where I work, and those are refunded to me on my residential state taxes.

I even read the advice of some of the stupid "TaxPro" people on TurboTax, and half of them had no idea what the fuck they were talking about.

[karinothing]

Yeah, I don't think you owe taxes. Tell turbo tax to suck it.

[rubytue]

Never once paid MD tax when I lived in VA and worked in MD. I can't imagine they have changed it. Asked around and none of the VA residents now are paying. TT is just telling you that you are doing your taxes too early

Sorry all you folks commenting on other states, this one is specific to the DC/MD/VA region.

Eta: it just occurred to me that I've never used TT to do my state taxes. They are always do simple compared to federal I just plug the numbers TT gives me from my 1040 in.

[aspentosh]

TT is being stupid.

I've lived in VA and worked in MD for 6 years. Never had to pay MD taxes.

[dragonfly08]

Yep, this is probably a problem with TT not handling any VA/MD/DC reciprocity agreement. Or just a state tax issue in general...one reason we only use it to do our Federal taxes and do our three state returns by hand, since they're pretty easy once we have the Federal AGI and other numbers. In our case, that's because our income comes from three states without reciprocity agreements...we live/DH works/we own an investment property in VA, we own investment properties in NJ, and I work online for a college physically located in NY. We have to pay taxes in all three states but only on the income originating in that particular state; the other two give us credit for income earned elsewhere.

[flymetothemoon]

MD had a retroactive tax hike that applies to 2012 and approved late June-ish time frame I believe. I remember getting an email from my company about how we would likely owe on 2012 taxes because they were too lazy to update to collect the new, higher amount of taxes. I believe that same tax hike also included a new non-resident/MD worker tax. I question more and more everyday why I chose this silly state.

ETA:  I misspoke, MD did a tax hike on high income earners in May 2012 MD Passes Income Tax on High Earners but that didn't affect non-residents.  I also found this link to non-resident information that may help you.  MD Non-Resident Forms 

[SusanBAnthony]

We have used the desktop software, not the online version, and had a couple issues. I both cases, we called Tt and they fixed the issue and we downloaded an update. But,sounds like the online version is different, so I don't know if that would help.

[calico]

I am pretty sure TT has a bug.