I live in Virginia or Maryland and work in DC: where do I pay income tax?

DC's income tax is imposed on the taxable income of every resident. DC defines a resident as someone domiciled in DC at any time during the year, or someone who keeps a place of abode in DC for 183 days or more during the year. If you live in Virginia or Maryland and only commute to DC, you are a nonresident and DC does not tax your wages.

What to do:

• Give your employer Form D-4A, the Certificate of Non-residence in DC. It tells the employer not to withhold DC income tax.
• If DC tax was withheld anyway, file Form D-40B, the Non-Resident Request for Refund.
• Make sure your employer withholds for your home state instead, so you do not owe a large balance in April.

If you later move into DC, file a new Form D-4 with your employer so DC tax is withheld.

Live in Maryland, work in Virginia. Virginia exempts a Maryland domiciliary whose only Virginia income is wages and salaries, when those wages are taxed by Maryland and the person did not keep a place of abode in Virginia for more than 183 days. Virginia does not require a daily commute for this exemption. Use Form VA-4 to stop Virginia withholding. If Virginia tax was withheld, claim it back on Form 763-S.

Live in Virginia, work in Maryland. Maryland exempts Virginia residents from Maryland income tax withholding on wages, as long as they do not live in Maryland for more than six months of the year. Complete line 4 of Form MW507 with your employer. If Maryland tax was withheld, file Maryland nonresident Form 505 to get it back. You pay Virginia on Form 760.

Live in DC, work in Virginia or Maryland. DC says DC residents must file a DC return even if they work in another state. Virginia exempts DC residents who commute daily, have no Virginia abode and earn only wages in Virginia. Maryland exempts DC residents who do not keep a Maryland abode for 183 days or more (MW507, line 4).

Maryland county tax. Maryland residents also pay a local income tax on their Maryland return, based on the county (or Baltimore City) where they live on the last day of the tax year. It applies to Maryland residents wherever they work.

The Virginia and Maryland exemptions above cover wages and salaries. Virginia's own forms say the exemption applies only when wages are your only Virginia-source income. If you earn business income from work in another state, you may need to file there and claim a credit at home.

If you run an unincorporated business (a sole proprietorship or an LLC taxed as a partnership) with income from DC, see DC unincorporated business franchise tax. If your business elects a state pass-through entity tax, the entity pays state tax for its owners. See Virginia PTET and Maryland pass-through entity tax.

Best for: DC-area commuters, remote workers, people who moved during the year, two-state couples, and 1099 consultants who work across state lines.

1. Free initial consultation. We confirm where you lived, where you worked and what kind of income you had.
2. Fees quoted upfront, in writing. Our fees are transparent and fair, and you see them before work starts.
3. We check your W-2s for the wrong state's withholding and tell you which certificate to give your employer.
4. We prepare your home-state return and any nonresident refund claim (D-40B, 763-S or 505).
5. For business owners, we review filing requirements in each state where you earn income.

What to send us: all W-2s and 1099s, last year's returns, and dates of any move during the year.