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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?
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?
So the VA audit was closed without any change or tax bill?
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?
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.
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.
Is there anything else I can help you with today?
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.
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