VA resident worked in SC, State Tax Owe in VA

SL12
SL12 Member Posts: 1 Newcomer
in State Filing

I'm a resident in VA and did internship in SC in 2025. I earned $55,828 in total and paid $2,090 SC state tax. When I filed state tax return (for both SC and VA) and filled out credit for taxes paid for SC and VA, it says that SC tax liability is $1,809 and SC tax withheld is $2,090. But it says that I owe $587 in VA. Does this mean that I have to pay $587 to VA? I thought credit for taxes paid will prevent double taxes.

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Answers

  • JohnV
    JohnV FreeTaxUSA Agent Posts: 35 image
    Hello SL12,

    Credit for taxes paid to other state does prevent double taxation by giving you a credit for the taxes that you've paid to the nonresident state on the resident state tax return.

    However, the resident state and nonresident state have different tax rates. If the resident state has a higher tax rate than the nonresident state, then you would have to pay the resident state since the credit from the nonresident state is not enough to cover the taxes the resident states charged on that income.

    Your assumption that you do not owe taxes to the resident state if you have paid taxes to the nonresident state would only be true if the resident state has the same tax rate, or lower tax rate, than the nonresident state. Only then is the tax you've paid to the nonresident state covers the tax in the resident state.

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