CPA advice! I work in Maryland but live in Virginia?

Question

I just started a new job in Maryland but I'm a Virginia resident so I pay Virginia taxes, I'd assume. I was handed a Maryland W-4 but that's not what I should be filling out, right? I should be filling out a Virginia W-4? All the advice I can get will be appreciated! Thank you for reading.

Answer 1

You pay income taxes in MD because you work there, then you get a credit for those MD taxes on yoru VA return.  You have to do a MD non resident return and a VA resident return.

Answer 2

You will have to file a tax return in each state. Non-resident MD and resident VA.  You will take at least a partial (may be full) credit on your VA return for the taxes you pay to MD.

Answer 3

Normally, your employer withholds tax in the state that you work.

In the event of that one state and work in the other, usually the employer taxes out taxes where you work.  In that event, you have to file taxes in both states.  The state you work, your taxes will be refunded.  In the state, you live you will owe taxes.

VA & MD are a unique situation.  They have what's called reciprocity.

This means that if you work in MD, you can pay VA taxes (if your employer allows it).  And if you work in VA, you can pay MD taxes (if your employer allows it). 

You need to see if talk to your employer to see if you can pay VA taxes.