State of Virginia Taxes

Apr 02, 2019 2 Replies

My nephew lives in Arlington, Va and works in DC. On his W-2 form he has no dollars being allocated to the State of Virginia and 2542.79 allocated to DC. When I do his taxes in Turbotax he owes the State of VA



2052.00 as no taxes were taken out of his check for VA.

In addition he has two pages of W2's from his employer. One is for DC, which has a State ID no. of Total State on his W2 form and page one has VA in the State ID field with an State ID of 30-xxxxxxxxxx-xxx. The "x" are my entries to protect confidentiality.



If I move the 2542.79 into the VA field, he gets a refund of 491.00. So my question is did Turbotax do the import correctly? If it did, why is there no money being taken out for the State of VA in his pay check when he lives in VA?


In article you write:

It looks to me like the employer screwed up and the W-2 is wrong. VA and DC have tax reciprocity so if you live in one and work in the other, you only pay tax where you live.

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As already mentioned, the reciprocity agreement between VA & DC states that income tax is due to the state of residence, not the work location. You say that the W-2 reflects tax withholding for D.C. As such, the only way I know to obtain the $2542.79 from D.C. is to file a D.C. D-40B Nonresident Request for Refund tax return. That means, he has to file a VA resident return and pay the full tax due.

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