I have a client who lived in MD and worked in DC. Taxes were only withheld for DC. They don't need to file DC. How can I get MD to calculate correct amounts?

[Just-Lisa-Now-]

They'd need to file DC if they want to get the withholdings back, right?

[sjrcpa · Accepted solution]

Why do you think MD is not calculating correctly? They have to pay MD tax on all of their income, includiing the wages that had DC tax withheld.

DC has a short for to reuqest the withholding refund.

[jkreuz2]

I have the same problem. Resides in MD and employer took DC and MD taxes. What do I file in DC? Just D-40B Sub Nonresident request for refund? And then file the MD taxes for 100% of the income? Is there no reciprocal agreement between DC and MD that the refund passes through? I've been on hold with DC for a half and hour and still waiting.

It sounds like MD I should show the income as 100% from MD? Am I understanding correctly? Any help would be great.

thanks so much

Jeanette

[sjrcpa]

File the D-40B in DC.

The reciprocal agreement between MD and DC is that if you live in one state and work as an employee in the other state, you only pay income tax to your resident sate.

Employee screwed up by allowing DC tax to be withheld.

MD return reports all of the client's income.