After you have completed your federal tax return, you are ready to start work on your state return. The accompanying tables provide basic instructions for each of the three local "states" - the District of Columbia, Maryland and Virginia.

The general comments that follow and the state-by-state information on P4 highlight differences from federal tax handling. Instructions are not repeated when they do not differ from federal treatment explained in preceding columns.

Observe the same precautions when preparing your state return as you did with the federal return. Check your work to avoid arithmetic errors; answer all questions; use the correct tax table or rate; sign the return (both signatures on a joint or combined separate return); attach the state copy (normally Copy 2) from every W-2; and enter your Social Security number on any payment.

On a District or Virginia return, use the "peel-off" label from the instruction booklet on your return, making any necessary corrections. Use the Maryland label only if the information is correct. In all three jurisdictions, you may round your figures to whole dollars, as you did on the federal return.

All three states provide a tax benefit for a married couple (living together) when each spouse has separate income. Whether to file a joint return or combined separate returns (on the same form) depends on the amount of income attributable individually to husband and wife.

The District Maryland and Virginia all offer the following four categories for filing:

Single (unmarried, widowed, before 1976, divorced, or separated)

Married, filing separately. (In Maryland, mandatory if you filed separate federal returns.)

Married, filing jointly. (In Maryland and Virginia, only if you filed a joint federal return.) This is the most advantageous way to life if either spouse had income less than $750 in D.C. $800 in Maryland, or $600 in Virginia.

Married, filing combined separate returns. (In Maryland, only if you filled a joint federal return and elect to file separate stae (returns.) This is the best method if each spouse had taxable income greater than the above amounts.

In addition, the District permits filing as "head of family" if during 1976 you were either single or married and not living with your spouse, and at least one dependent lived in your home. A taxpayer who qualifies for this filing category is gien an extra personal exemption.

If you are a legal (domiciliary) resident of one of the three states, you do not lose that status when living elsewhere because of duty assignment. You are subject to income tax and required to file a resident return in your state of domincile regardless of where you are stationed.

Conversely, if you are a legal resident of another state, you are nott subject to income tax in the District, Maryland, or Virginia solely by virtue of being assigned to duty there.

In Maryland or Virginia, you are not required to report or pay tax on military income; but you are liable for reporting, as a nonresident, income earned from other sources within the state, such as a "moonlighting" civilian job.

The District tax laws are more lenient. If you are a military member living in D.C. but claiming legal residence elsewhere, you need not report nor pay tax on any income, regardless of sources.

The husband or wife of a military member is considered a resident or nonresident according to the geneeral rules on residency for each state, without regard to the military status of the spouse.

The District, Maryland and Virginia all operate their income tax systems on a "pay-as-you-go" basis. If you anticipate that your state tax liability will exceed the amount your wages or salary, or if you are self-employed, you are required to file a declaration of estimated tax liability.

In Maryland, if you are due a refund on your 1976 tax, you may have part or all of the refund applied to your 1977 tax without having to file Form 502-D showing the estimated tax liability.

What to do if you have income (other than wages or salary) in a state that is not your state of residence?

For example, a District resident who owns and rents out his concominium in Ocean City, Md. Or the Maryland resident who has income-producing property in Virginia Beach, Va.

Maryland, Virginia and the District have reciprocal agreements on such income. But even then, there are too many variables to permit all-inclusive answers. Review the instructions for filing tax returns in both your state of residence and in the state where the income originated.

One general rule applies. You will not be taxed twice for the same income. But you may have to file a return in Maryland (if you are a District or Virginia resident) to show that you are paying a tax on that Maryland income in the District or Virginia.