WASHINGTON — It’s tax season during the pandemic. As people start to file that’s caused all sorts of new questions.
With so many people working from home: What happens if you’re working from home in a different state or jurisdiction from where you worked?
How does work from home during the pandemic affect your tax filing in the DMV?
It’s not a big deal if telecommuting is done in the DMV. But anywhere outside the three jurisdictions could cause issues.
D.C., Maryland, and Virginia’s tax laws and our tax expert Henry Grzes from the Association of International CPAs.
What We Found:
Working from home In the DMV won’t be that big of a filing issue. DC, Maryland and Virginia have what’s called tax reciprocity.
“If you are working in D.C., but living in Maryland, or living in Virginia, you're not going to be subject to D.C. taxes,” Grzes explained.
Working from home in any of the three jurisdictions, won’t affect how you file. However, let’s say during the pandemic you chose to get out of the DMV. You telecommuted and lived in a different state.
Grzes said depending on that state’s tax rules, you could be subject to filing there.
“Let’s say, an aggressive state, like California or New York, you know, you could only be there for a couple of weeks and potentially be subject to tax now,” he added.
While all 50 states do not have tax reciprocity agreements with each other, they do all share information. If you forget to file or chose not to, that state could eventually track you down.
Remember each state has its own set of tax laws and filing requirements. Don’t assume any are the same. It’s important to check all of these questions with your accountant or tax preparer.