I withdrew my 401k so I could move out of state in 2003. I filed my taxes but did not file VA state taxes because I only had $700 worth of income in the state. The majority of my income was made in DE & that's where I was living when I w/drew from my 401k. So I included it in my DE state return. Now I'm getting audited by VA & they want me to pay them for the 401k w/draw. Do I owe them or DE? The 401k was from a DE job & I was living in DE when I w/drew the money so what right does VA have to it?
Thanks in advance.

If you show VA that you paid the taxes to Delaware (sent them a copy of the tax return), they should leave you alone.