MARYLAND
separate property state

 

Military Income:  Fully taxable if stationed in the the US.  Maryland residents with military pay from active service outside the 50 US states and the US possessions (Guam, Marianas Island, Puerto Rico, Virgin Islands) may exclude up to $15,000 of that pay provided total military pay is less then $30,000.

Military Spouse Residency Relief Act:  Service member in state in compliance with military orders. Spouse in state solely to be with service member. Spouse must be domiciled in a state other than Maryland. File Form MW507 and MW507M with employer to exempt Maryland income tax withholding. No provision to obtain refund of withheld taxes.

Forms Used:            

Filing Status:  Military personnel who are domiciles of Maryland (their permanent home is in Maryland) must file a resident return.  Military personnel who are legal residents of another state must file a nonresident return if they earn income in Maryland other than their military pay. Military personnel who are legal residents of another state with a civilian spouse earning income in Maryland must file a nonresident return if they have resided in Maryland for less than six months. If the civilian spouse has live in Maryland longer than six months they become a statutory resident and would then be required to file either a joint or separate resident return

Attach Copy of Federal Return:  No

Not Taxed: 

Other State Tax Credit:  Available.  Attach Maryland Form 502CR and copy of other state return.   

Reciprocity States Pennsylvania, Washington D.C., Virginia, and West Virginia. 

Miscellaneous:  If both spouses have income taxable to Maryland and they file a joint return, up to $1,200 can be deducted.  (Use worksheet in instructions.)

Where to Mail:

Comptroller of the Treasury
Revenue Administration Division
Annapolis, MD  21411-0001  

Refund Info:  1-800-218-8160

Website:  www.marylandtaxes.com
Military Website individuals.marylandtaxes.com/incometax/military/default.asp  

Forms:   General Information:  1-800-638-2937

By fax:  410-974-3299
By phone:  410-260-7951  

E-File Help Desk:  (410) 260-7753
Other Info:  

Comptroller of Maryland
Revenue Administration Division
800 Calvert Street
Annapolis, MD  21404 

E-filing Info:  Retain 502EL for 3 years.  The following CANNOT be filed electronically:
  • Part Year Resident Returns
  • Married Filing Separate Returns
Tax Form Instructions:
Resident Instructions Non-Resident Instructions

 

Filing Status Scenarios

1.  Taxpayer and Spouse Residents (Use also for Single Taxpayer)
2.  Taxpayer and Spouse Different States of Residence
3.  Taxpayer and Spouse Non-Residents
4.  Taxpayer Non-Resident - Spouse Part-Year Resident
5.  Taxpayer Married or Single - Resident but Income from Other State
6.  Amended Return

 

1.  Taxpayer and Spouse Residents (Use also for Single Taxpayer) - Taxpayer and spouse are both Maryland residents, lived at their present location all year, and one or both had income.

Main Info Screen.

 

Maryland 502 Form.  A joint resident Maryland income tax return is prepared.  You must complete the County of Residence Code and the name of the city, town or taxing area. NOTE:  If there is no taxing area behind the County Code or the taxpayer is unsure if they reside in the city, town or taxing area, use only the County Code, i.e. BC for the city of Baltimore.

Complete all other fields and forms with red or required information.

2.  Taxpayer and Spouse - Different States of Residence - Taxpayer or spouse is a resident of Maryland, while the other member is a resident of a different state.  A Maryland income tax return must be prepared due to the taxpayer or spouse having Maryland earned income.

Main Info Screen.  If they are married and spouse is not from Maryland and they lived together at the end of the year, they may file either a married filing joint, or a married filing separate return.  For this example, the taxpayer is a resident of  Maryland while the spouse is a resident of North Dakota.

Resident/Nonresident States Worksheet.  Review form to ensure income is split correctly for the appropriate states.

Maryland 502 Form.  A married filing separately Maryland income tax return is prepared for the taxpayer as that results in the lowest tax.<Compute the tax both ways to determine which benefits the taxpayer most.>  You must complete the County of Residence Code and the name of the city, town or taxing area. NOTE:  If there is no taxing area behind the County Code or the taxpayer is unsure if they reside in the city, town or taxing area, use only the County Code, i.e. BC for the city of Baltimore.

Complete all other fields and forms with red or required information.

3.  Taxpayer and Spouse Non-Residents - Taxpayer and spouse are residents of a different state.  The spouse and taxpayer must file a Maryland tax return due to one or both having Maryland earned income.

Main Info Screen.  If both members are residents of another state, the parties should file as nonresidents.  For this example, the taxpayer and spouse are both residents of Wisconsin and the civilian spouse has lived in Maryland for less than 6 months. A Maryland income tax return because the spouse worked in Maryland.

Resident/Nonresident Worksheet.  Review form to ensure income is split correctly for the appropriate states.

Maryland Form 505.   A joint non-resident Maryland income tax return should be prepared. Enter state of legal residence, dates of residence in Maryland and answer questions.

MD 505 Pg 1, Line 22 - Nonresident Military Income - In order to comply with Service Member's Civil Relief Act, the nonresident military income is entered on Line 22.

Review the remainder of the Maryland Form 505 to ensure the other state income is being subtracted correctly.  Complete all other fields and forms with red or required information.

4.  Taxpayer Non-Resident - Spouse Part-Year Resident - Taxpayer and spouse moved to or from Maryland during the tax year.  The taxpayer is a resident of a different state.  The Spouse is a part-year resident of Maryland.  The Spouse and taxpayer must file a Maryland tax return due to one or both of them having Maryland earned income and possibly income from another state.

Main Info Screen.  For this example, the taxpayer is in the military and a resident of Indiana.  The taxpayer and spouse moved from Maryland to North Dakota during the year.  The spouse was a resident of Maryland but is now changing their residency to North Dakota for tax purposes.  The spouse therefore was a part-year resident of both Maryland and North Dakota and must file a Maryland income tax return because the spouse worked in Maryland.

Part Year Resident States Worksheet.  Review form to ensure income is split correctly for the appropriate states.

Maryland Form 502 will be used for a Maryland part-year resident who must report Maryland earned income.  You must complete the County of Residence Code and the name of the city, town or taxing area. NOTE:  If there is no taxing area behind the County Code or the taxpayer is unsure if they reside in the city, town or taxing area, use only the County Code, i.e. BC for the city of Baltimore. You must also complete the Part-year Residents information. Check the military box and enter the amount of nonresident military income.

Review the remainder of the Maryland Form 502 to ensure the other state income is being subtracted correctly.  Complete all other fields and forms with red or required information.

5.  Married or Single Military Resident of Maryland with Income from Another State  - Taxpayer is single.  The taxpayer must file a Maryland tax return due to him or her having Maryland earned income.

Main Info Screen.  For this example the taxpayer is a military member stationed in North Dakota but a resident of Maryland.  The taxpayer had a job in North Dakota therefore having North Dakota earned income.

Resident/Nonresident Worksheet.  Review form to ensure income is split correctly for the appropriate states.

Maryland 502 Form.  A resident Maryland income tax return is prepared.  Maryland taxes residents on income from all sources, even income earned while living in another state (North Dakota as in this example).  You must complete the County of Residence Code and the name of the city, town or taxing area. NOTE:  If there is no taxing area behind the County Code or the taxpayer is unsure if they reside in the city, town or taxing area, use only the County Code, i.e. BC for the city of Baltimore.

Maryland 502CR Form, Personal Income Tax Credits for Individuals.  Maryland 520CR Form must be added to the tax return.  Part A - Tax Credits for Income Taxes Paid to Other States must be prepared to give a credit for taxes paid to another state (North Dakota). You must complete the other states tax return first, then enter the amount of tax from the other states tax return.  This is not the amount the taxpayer had withheld from his or her pay but the amount of tax imposed on them.  Line 2 is the amount of income earned in the other state (North Dakota).  Line 7 lists the state and the amount of income tax liability on the (North Dakota) tax return.  A copy of the other state's return must be attached to the Maryland return if not e-filed.

Complete all other fields and forms with red or required information.

6.  Amended Return  - An amended Maryland return must be filed because the taxpayer received new tax information after their Maryland return was filed.
Federal 10502X Form.  Before making any changes to the tax return add the US 10502X form to the tax return.  You must check the box under Income and Deductions to lock in the entries in Column A - Original amount or as previously adjusted.

Maryland 502X - Amended Tax Return.  Add the Maryland 502X Form to the return.

Maryland 502X - Amended Tax Return.  Answer the questions as in the example.  You must check the box to lock in the entries in Column A - As originally reported or as adjusted, before making any changes to the return.

Make whatever changes are required to the federal tax return.  For this example, a new W-2 was received.

Maryland 502X - Amended Tax Return.  Return to the Maryland 502X form to determine if the taxpayer is receiving an additional refund or owes money. 

Maryland 502X - Amended Tax Return, Page 2.  On Page 2 you must enter an explanation for why the Amended Return is being prepared.  Enter the current date in the Date field.

Amended returns can not be e-filed.  The taxpayer must mail the federal 10502X and any state amended returns if required to be filed.