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Reciprocity Agreement between D.C. & Maryland

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Level 3

A client lives in Maryland and works in Washington D.C. Her Employer  withheld only DC Taxes. Client filed taxes for only D.C.  Now State of Maryland audited the client requiring her to pay taxed due for Maryland. How does the reciprocity agreement between Maryland and DC applies here?

 

Thanks 

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Level 10

Wage earners pay tax to their resident state.  Sounds like that's MD in this case.  Good luck getting money out of DC.  What tax year are we talking about?

Normally you would file a D-40B to get the withholding back but I'm not sure what the process would be if "Client filed taxes for only DC" already.  You might call DC and see what they say, they may need you to amend the D-40 that was already filed.

@sjrcpa may have a better idea.

Rick

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Level 10

Wage earners pay tax to their resident state.  Sounds like that's MD in this case.  Good luck getting money out of DC.  What tax year are we talking about?

Normally you would file a D-40B to get the withholding back but I'm not sure what the process would be if "Client filed taxes for only DC" already.  You might call DC and see what they say, they may need you to amend the D-40 that was already filed.

@sjrcpa may have a better idea.

Rick

View solution in original post

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Level 3

Thanks rbynaker.

The tax year we're looking at is 2014.

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Level 10

@rastewu wrote:

Thanks rbynaker.

The tax year we're looking at is 2014.


That sucks.  You're not likely to get the tax back from DC but it is owed to MD.

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Level 3

Can I get the credit from Maryland for the Tax I paid to D.C.?

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Level 10

No.  No tax was owed to DC.  Had your client filled out a D-40B back in 2015 they would have gotten all of the DC withholding back.

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Level 15

I have no better idea. As you said, it is too late to get a DC refund for 2014.


ex-AllStar