All three local tax jurisdictions practice tax conformity -- meaning that the information to be entered on your state tax return is derived from the data you had entered on your federal return. You start your local return by transferring many of the numbers from your federal return, then making adjustments up or down to arrive at state taxable income.

Obviously, then, you must complete your federal income tax return before tackling your state return. Tip: Don't finalize the federal return until you have completed your state or District of Columbia return; the additional research you do for the local return may trigger a change on the federal return.

The "State Filing Minimums" table, page 32, spells out for the various filing categories the minimum income level at which the requirement to file a state return starts. Note that Maryland minimums are the same as for the federal return, but the District and Virginia have lower dollar minimums than Uncle Sam for some filing categories.

In all three jurisdictions, the filing minimums apply to "state" income -- that is, the amount you reach after adjusting federal income as directed by your particular jurisdiction. So you may find you are required to file a state return even though you are exempt under federal rules. General Rules

Before we take a look at the requirements for each of the separate states, there are a few rules that apply to all three.

The District, Maryland and Virginia all provide a special filing status for a married couple when both spouses have taxable income. The "combined separate" category makes it possible to report, and compute the tax on, the income of each spouse separately, thus avoiding any "marriage tax penalty."

Because of the availability of this filing category, the two-earner deduction allowed on federal Schedule W is not allowed on the state returns, and each requires that the amount of that deduction be added back to federal adjusted gross income.

The tax people in all three states ask that you use the peel-off label from the instruction booklet on your return. If any of the information is incorrect, in the District or Virginia use the label anyway, making any necessary corrections. But for a Maryland return, discard an incorrect label and print or type the correct information on the return.

If you're a District or Virginia taxpayer, you must complete the return and compute the tax yourself; neither department will compute the tax for you, as the IRS offers to do in some cases. Although Maryland's instruction booklet doesn't mention this option, its tax division will compute the tax liability for you if you provide the necessary information.

You can make the calculations easier by rounding all figures to whole dollars. You "round up" -- drop the cents and increase the dollar figure by one -- if the amount is 50 cents or higher, and "round down" -- drop the cents and leave the dollar figure unchanged -- if less than 50 cents.

If you moved your legal residence into or out of one of the three states during 1985, you must file a part-year return for the period of residence (if your income equals or exceeds the filing minimum).

Although each state has somewhat different rules for a part-year return, in general you prorate exemptions and allocate income and deductions to the period in which they occurred. (Exception: In Virginia, if you derived your entire federal adjusted gross income for the full year from Virginia sources, you may claim the full personal exemption instead of prorating. If married, both spouses must meet this requirement.)

All three states have "pay-as-you-go" tax systems. This requires that you file an estimated return and make quarterly payments if you have taxable income, in excess of specified limits, that is not subject to state tax withholding. Amended Returns

The three local jurisdictions provide an opportunity to correct any errors or omissions on your original return. The District and Maryland have special forms for this purpose; Virginia asks that you use a regular Form 760 or 760S, but print the word "Amended" across the top of the new return. All three require that you file an amended return any time the Internal Revenue Service adjusts your federal income tax. Military Personnel

If you are a legal resident of the District of Columbia, Maryland or Virginia, you don't lose that resident status when living elsewhere because of a military duty assignment. You are subject to income tax and required to file a resident return in your state of domicile regardless of where you are stationed, reporting all income, including military pay.

Conversely, if you are a legal resident of another state, you are not subject to income tax in any of the three local jurisdictions solely because you are assigned to military duty here.

In Maryland and Virginia, you are not required to pay tax on military income unless you are a legal resident of either state. But you are liable for tax as a nonresident on income earned from other sources within the state (a "moonlighting" job, for example). If you have such income, both states require that you file a nonresident return on which you report total federal adjusted gross income, then subtract military pay and any income derived from sources outside the state. Only locally generated income is subject to state tax.

The District of Columbia doesn't tax the income of nonresidents regardless of where it was earned. So if you are a member of the military living in the District but claiming legal residence in another state, you need not report or pay tax on any income from any source.

In all three states, however, the husband or wife of a member of the armed forces is considered a resident or nonresident according to the general rules in each state, without regard to the military status of the spouse.

So if you are stationed in the area, lived in one of the three states during the year and your spouse worked locally during 1985, he or she may be subject to state income tax even though you claim legal residence elsewhere.