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Reciprocity WV and VA

House
Level 2

This question is for ProSeries directly but I cannot find a way to send them a message so trying here.  I have a return with a married joint filer who files as a WV resident.  Both spouses work.  One spouse works and reports income to VA.  The WV state tax forms are allowing a credit for taxes paid to VA.  However, VA is a known and stated reciprocity state with WV and WV does not allow for a state tax credit in this scenario.  Yet the software is allowing it in the tax calculations.  Why?  How do I get this fixed.  I have clearly identified VA as the other state so not sure it is anything on my end.  Maybe a software coding issue?  Thoughts?

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4 Replies 4
rbynaker
Level 11

Unfortunately ProSeries goes strictly by what you enter on the W-2 Wks.

I'm not exactly sure what you mean by "One spouse works and reports income to VA".  If that spouse lives in WV and is paid wages for working in VA, those wages are exempt from VA taxation and no VA income taxes should be withheld.  If they are withheld in error you need to file a VA 763S to get that money back from VA.  The tax needs to be paid to WV instead.

On the W-2 Wks in the state section, enter VA wages of $0 but include all of the VA withholding.  Add a line for WV wages for the full amount of wages but with $0 WV withholding.  That should make the right numbers flow to your NR Worksheet (VA) and then to the states.

Rick

House
Level 2

The spouse lives in VA.  Odd situation.  They are married but live in two separate houses in two different states.  College residency issue.  Its almost as if they may need to file "married separate" for the states.  Most unique case I have ever had. 

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rbynaker
Level 11

Sounds like they might.  On the VA side of the line you can see if the VATAX site helps:

https://www.tax.virginia.gov/residency-status

There are details listed for students and for married taxpayers with mixed residency status.  Scroll down past the Aliens and click on the different boxes to see what might apply.

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House
Level 2

I have all that information.  I clearly marked W2 as VA source revenue.  I have them filing joint as WV residents.  I currently have the file and can preview it with you through remote connection if we can.  It is still allowing the Credit on the WV return for taxes paid in VA.  Could you review my settings and selections to see why this may be happening?

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