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emc011075
emc011075, Tax adviser
Category: Tax
Satisfied Customers: 2311
Experience:  IRS licensed Enrolled Agent and tax instructor
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I filed a MD non resident in 2013 and a VA resident. I was

Customer Question

I filed a MD non resident in 2013 and a VA resident. I was audited by VA for 2013 and was told today that I have to file an amended MD non resident form.
JA: The Accountant will know how to help. Please tell me more, so we can help you best.
Customer: I am confused about the amended return as I do not know which info I need to fill out since I do not owe taxes to MD due to the reciprocal state
JA: Is there anything else important you think the Accountant should know?
Customer: I received a refund from MD but VA says that the money paid to MD is due to VA
Submitted: 3 months ago.
Category: Tax
Expert:  emc011075 replied 3 months ago.

Hi. My name is ***** ***** I will be happy to help you.

Reciprocity agreement means that you do not need to file return in both states, only in state you reside. Does your employer took out MD state taxes in 2013?

Customer: replied 3 months ago.
they took out MD taxes in 2013. I filed resident VA and non- resident MD. I claimed border state on the VA return and was told my the auditor today that I have to file an amended MD return which MD told me today is the 505x.
Expert:  emc011075 replied 3 months ago.

I think what the VA is trying to tell you is that you do not claim any income in MD, instead you claim all income in VA. If you had taxes withheld, you only file as a request for a refund. How VA changed your return?

Customer: replied 3 months ago.
That is correct but I do not know what I need to fill in on the MD 505x. VA did not change my return
Expert:  emc011075 replied 3 months ago.

So the VA audit was closed without any change or tax bill?

Customer: replied 3 months ago.
I do not know if I need to claim exemptions on the MD form.
No VA wants me to get a refund from MD and send it to them.
Expert:  emc011075 replied 3 months ago.

VA cannot just tell you to send them your MD refund. Was it an agent who told you so or you received something on paper?

Customer: replied 3 months ago.
I received a letter and then spoke to the the tax examiner today.
Expert:  emc011075 replied 3 months ago.

Ok. What's the letter says? Unless VA adjusted your return that resulted owing taxes, they cannot just tell you send me your MD refund.

Customer: replied 3 months ago.
It says that they adjusted the out of state tax credit that I claimed and that I need to file an amended MD return as I have no tax liability to MD. They are going to Bill me $8404.62 if I do not get this amended return done by tomorrow.
Expert:  emc011075 replied 3 months ago.

That's sounds right. You are not suppose to claim any income in MD, pay tax in MD and than claim credit for taxes paid in MD on your VA return. They eliminated the credit and want you to file zero MD return, claim the refund and pay the VA bill. What you need to to is adjust your MD income to 0, that will result in 0 taxable income and 0 tax liability. The MD tax that was calculated on your original return will be refunded to you.

Customer: replied 3 months ago.
Ok thanks
Expert:  emc011075 replied 3 months ago.

You're welcome.

Is there anything else I can help you with today?

Expert:  emc011075 replied 3 months ago.

If you are still working in MD and live in VA, you should give your employer form MW507 and request no MD tax withholding. This will eliminate the need to file returns in both states.

And if this answered your question, please take a moment to rate my response so that I may receive credit for assisting you today. You find the rating bar on the top of the page – 5 stars. However, if you need clarification, or want to discuss this issue further, let me know. Thank you.

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