Credit for taxes paid in another state on part year resident

Question

I'm confused about whether I can take a tax credit as I moved during 2025. I lived in WV until May 30th and then in MD the rest of 2025. On my W2 it appears WV taxed my entire yearly income as box 1 wages match box 16 under WV state wages. Box 16 under MD is for part of my total income and seems correct. My payslips show WV continued to take out income tax until the end of 2025. So if I am eligible for a tax credit, would that mean under the "Were your MD earnings double taxed?" page I would say yes and put the WV income tax amount?

kiarab · Answer

Hello again,

Okay, in that case, your income would generally just be taxed in your resident state at the time you received your income. Since your employer withheld taxes for WV all year long, you may have an excess in taxes withheld which should be refunded to you if that is the case.

Neither state should be taxing you on income earned while a resident of another state, so there should not be any double taxation that would qualify you to claim the Credit for Taxes Paid to Another state.

MattW · Answer

I actually work remotely and my employer is in neither state, but follows the taxing of whatever state an employee resides in.

kiarab · Answer

Hello MattW,

In your case, I do not think so. MD and WV have a reciprocal agreement. If your work state has a reciprocal agreement with your home state, your wages aren't taxed in your work state and usually you do not need to file a tax return with your work state.

Based on what you said, I'm going to assume that WV is the state that your job in is and that you kept the same job when you moved to MD. If this is true, then all of your income that you earned while a resident of WV is taxable to WV and all of the income you earned while a resident of MD is taxable to MD and not WV.

Now, when you fill out your WV part year tax return, you will want to enter the amount of income you earned in WV before you moved. That way you are only taxed on the income earned in WV. Since you mentioned that you were taxed all year long for WV, you should get the excess withholdings refunded back to you. If they are all refunded to you, that means that your income wasn't double taxed.

I'm also going to include a link to a Community Article that explains more about reciprocity.

https://community.freetaxusa.com/kb/articles/303-what-is-tax-reciprocity-and-does-it-apply-to-me?

You may want to contract Support while signed into your account so they can double check your state returns and confirm they are prepared correctly.