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Level 5
March 26, 2025
Question

VA non resident income not flowing to resident state return for Maryland

  • March 26, 2025
  • 1 reply
  • 15 views

Client is a Maryland resident with VA non resident income. On the federal information page, I've entered Maryland as state of residence on 12/31/2024, selected VA as the non-resident state and checked the Non-resident filers box. However, the VA income is not flowing the MD return as it's showing total wages for both states. When I populate the 502CR, it's empty.I've done plenty multi-state returns with FY and PY resident and non-resident income and this is the first time I've had this issue. Am I doing something wrong or has something changed in ProSeries?

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1 reply

rbynaker
Level 13
March 26, 2025

We may need more info on your fact pattern.

FYI, VA & MD have a reciprocity agreement.  So wages earned in VA by a MD resident are taxable on the MD return (and not taxable on a VA return).

If you have a part-year resident that's a different story.  If you have a VA rental property owned by a MD resident that's a different story.  If you have a Sch C business operating in both VA and MD that's a different story.

Tell us your story. 🙂

Rick (in VA)

Level 5
March 26, 2025

Ahhhh....you are correct. Completely overlooked the reciprocity between the two. 

Client is a MD resident with VA W-2 wages,(traveling medical professional). But why is VA not refunding the entire tax withheld if it's not taxable as a MD resident. 

rbynaker
Level 13
March 26, 2025

On the W-2 Wks enter all of the income as MD source.  Enter $0 for VA wages but leave the VA withholding.  If there's no other connection to VA you'll file a VA 763-S to get the withholding back (it might still have to be mailed in with the W-2 attached.)

Have your client tell their employer to STOP withholding VA taxes.  If they're friendly they can also START withholding MD tax (and may need to catch up on the missing first 3 months . . .)

Rick