Am I resident in two states for tax purposes?
August 10, 2007 11:34 AM   Subscribe

Starting next month I will have a job in the state of Maryland. My permanent residence is in West Virginia (I own a house there, live in it, and my husband lives and works there), and I rent a flat in maryland during the week. My question: which state do I fill out a W2 for when I go to payroll?

There are many questions here from people who live in one state and work in another. But what are the residency implications if I also rent in the state I work in? Am I a resident of WV or of MD (the payroll office says I should only fill out a W2 for West Virginia)?
posted by media_itoku to Law & Government (8 answers total)
Maryland. The state where the income is earned is the state that gets to tax the income.
posted by gum at 12:04 PM on August 10, 2007

Wait -- you're asking what address to put on your W-2, and you want to use your West Virginia address because of all the "it's my home" reasons you offered. But you'll use said W-2 to pay income taxes in Maryland. Sorry initially misreading your question.
posted by gum at 12:08 PM on August 10, 2007

Do you mean a W-4? The W-4 is the form you fill out when you start a new job. Your employer fills out the W-2 at the end of the year.

Second, the W-4 is a federal form. You have to state your address on it, which I presume would be your permanent WV address. I don't know about MD or WV specifically, but I've never heard of a state equivalent to the W-4; you just fill out the federal one, and that's it. Since you're working in MD, your employer will withhold taxes for MD.

The hard part is not now, but in next year when you file your tax returns - you might have to submit state tax returns in both MD and WV, and read their instructions carefully at that point to determine whether you qualify as a resident or non-resident in each state.
posted by DevilsAdvocate at 12:08 PM on August 10, 2007

gum: I believe the opposite is true, at least in this part of the country. I live and work in DC, however many people who work in DC live in nearby Virginia or Maryland. Every job here in DC has asked me my state of residency, so that they can give me the correct form.
posted by dcjd at 12:10 PM on August 10, 2007

Additionally, there are some localities that charge a "commuter tax" to non-resident workers, but DC doesn't do that. (in fact, it is prohibited from doing so by Congress)
posted by dcjd at 12:12 PM on August 10, 2007

Oops, yes, I mean the W-4. And dcjd is correct, here they ask for state of residence to give you the right tax form, since (for example) MD and WV have a tax treaty. I guess what I'm asking is, if I fill out a WV W-4, giving my home address in WV, will the state of Maryland be on my ass at the end of the year for filling out the wrong form?
posted by media_itoku at 12:14 PM on August 10, 2007

Looks like this is the form you'd fill out to be exempt from Maryland withholding because of your West Virginia residency status.

From the MW507 form:

Line 4
CERTIFICATION OF NONRESIDENCE IN THE STATE OF MARYLAND This line is to be completed by residents of the District of Columbia, Pennsylvania, Virginia or West Virginia who are employed in Maryland and who do not maintain a place of abode in Maryland for more than 183 days.

Line 4 is not to be used by residents of other states who are working in Maryland, because such persons are liable for Maryland income tax and withholding from their wages is required.

If you are domiciled in the District of Columbia, Pennsylvania or Virginia (Virginia residents see note below) and maintain a place of abode in Maryland for 183 days or more, you become a statutory resident of Maryland and you are required to file a resident return with Maryland reporting your total income.You must apply to your domicile state for any tax credit to which you may be entitled under the reciprocal provisions of the law.

If you are domiciled in West Virginia, you are not required to pay Maryland income tax on wage or salary income, regardless of the length of time you may have spent in Maryland.

NOTE: If you are domiciled in Virginia, you must commute daily to Maryland to be exempt from withholding. If you reside in Maryland for at least one day but less than 183 days, you will be subject to Maryland tax on your income from Maryland sources as a nonresident of Maryland.

posted by yarrow at 12:49 PM on August 10, 2007

The state where the income is earned is the state that gets to tax the income.

Ignore this. It's not true, at least not entirely—both states are probably entitled to their respective cuts.
posted by oaf at 2:01 PM on August 10, 2007

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