Last year I worked for companies in VA and MD and they didn’t take out state taxes. Using Turbo Tax, I filed my federal return and following its prompts, I filed state returns for those states plus for NY where I live. Is that correct?
In a nutshell, if you worked on a tug or ship that ran interstate (between states or foreign), state taxes should not have been taken out. The only state you needed to file was the state you resided in.
I wouldn’t file for VA or MD unless you want them to take more money than NY is already going to take.
The issue raised is State Tax Reciprocity. A cursory glance revealed that NY has no reciprocity agreements. Although it’s not a simple thing, you may have accidentally done it correctly, but complicated tax situations usually beg for professional help. You might consider upgrading your tax preparation.
Are you looking for advice from a sea lawyer? If so you’re in the right place.
I disagree. The issue is a transportation worker engaged in interstate, coastwise, intercoastal, noncontiguous, or foreign trade. 49 USC 14503: Withholding State and local income tax by certain carriers (house.gov)
Hey, sea lawyers aren’t always wrong, and given they’re almost always pro bono it’s the best deal around!! (Its their client base I’d be leery of)
That being said…I’m my experience, TurboTax is not programmed with the nuances of the average mariners tax situation. OP would be wise to find a tax professional who is.
On TurboTax’s Community Forum:
I am a merchant mariner. I live in Washington state but worked for companies based in Massachusetts, Florida and Maryland. Do I need to file any state returns? (intuit.com)
Good luck with that. I’m not sure you ready to receive your Sea Lawyer diploma just yet
That’s a terrible answer
I agree, those that answered the guy’s question on TurboTax’s forum didn’t understand the nature of his work, i.e., transportation worker engaged in interstate trade.
The OP’s question has been answered before on this forum.
You don’t really need a tax professional these days. It’s a nice luxury if you can find a good one that is accepting new clients, or you have a standing relationship with a good one. Information is pretty easily accessed nowadays. It just takes a little work.
Most people have terrible tax professionals and just don’t pay attention. A good one is a worthwhile investment, but good ones don’t need new clients.
I definitely agree with you. I actually used TurboTax most of my sea going career until I had some more complex international income tax considerations that I just didn’t want to get bogged down in interpreting the code myself.
But honestly the mariner related state income tax things are pretty decently covered in prior threads. Without trying to sound to much like Shipengr Esq., basically if your on a ship meeting the criteria of whatever the USC I’m not going to look up says (pretty sure it’s in 46?), the State of your employer shouldn’t withhold any state income tax, and you should file in the state in which you reside.
But don’t overlook 49 U.S.C. §14503 (b)(2)(B). The 50% rule.
If they didn’t take out state taxes why did you file in those states?
I searched for the answer but I couldn’t find this specific situation - not state withholding but filing in other states. I see now that I made a mistake and should have just filed in NY. Lesson learned.
Just file it away for future reference. If you had worked in only one state, I would guarantee the company would have taken out taxes for that state. As you worked multiple states, that changed the situation.
Living in Maryland near DC, I have worked in Maryland, DC, and Virginia. By local agreement, only the state of residence gets taxes. But, other states have other rules. Other states and localities want taxes from truck drivers carrying loads on their highways from and to out-of-state locations, and plumbers coming into their village to fix a leak. Some employees needed two city stickers on their cars - one for where they lived and one where they were employed.
They may WANT that but they can’t enforce that. There are federal laws prohibiting taxing transportation workers on interstate runs.
My memory is from years ago when Indiana was trying to enforce it. I had a weekday job in Chicago, Illinois and worked weekends in adjacent Lake County, Indiana. Both employers were in Illinois, so that’s who got the taxes. In winter, the trucks at the Indiana plant were left locked overnight with engines idling, to avoid the task of starting them in the frigid morning weather. The gasoline was cheaper than a service call.