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@NancyT wrote:

That’s my conundrum - is it taxable as MD non-resident income and then removed from VA income as “being taxed by another state”.?

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If it is taxable as MD source income it would still be taxable in VA to a VA resident but there would be an other-state-credit (OSC) rather than a subtraction.  VA starts with federal AGI which would include the 1/3.  So tax would be calculated on that basis, then the credit calculated based on the portion of VA income that's taxable in MD.

What we don't know is whether this is MD source.  I can see it both ways.  You might try calling MD DoR to see if they have an opinion.

Rick