FULL List to Maryland Tax Forms
Individual Income Tax Forms
Form 503 Individual Income Tax Return Resident
Form 505 Individual Income Tax Return Nonresident
Form 515 Individual Income Tax Return Nonresident Local
Corporate Income Tax Forms
Form 500 Corporation Income Tax Return
Form 500X Amended Corporation Income Tax Return
Sales Tax Forms
Form ST-205 Sales and Use Tax Refund Application
Property Tax Forms
Form AT3-45 Transfer, Sale or Disposal of All Tangible Personal Property
Form HTC-60 Homeowners’ Property Tax Credit Application
There are a number of taxes applicable to the state of Maryland, which includes sales tax, five income brackets for personal income taxation as well as local taxes. Tax returns are due on April 15.
Maryland state sales tax – 6%, no local sales tax (food, prescription drugs, clothing up to $175, and utilities such as gas, oil and electricity are exempt)
Maryland state personal income tax
Eight income brackets for single filings
2% – first $1,000 of taxable income
3% – $1,001 – $2,000
4% – $2,001 – $3,000
4.75% – $3,001 – $150,000
5% – $150,001 – $300,000
5.25% – $300,000 – $500,000
5.5% – $500,001 – 1 million
6.25% – $1 million+
Counties and municipalities may add taxes from 1.25% to 3.20% to “piggyback” on state rates. Baltimore city, for example, levies a tax of 3.05% on top of Maryland state taxes.
Maryland state excise taxes
Taxes assessed on vehicles, alcohol, tobacco, gasoline and are in addition to federal excise taxes.
$2.00 per package of 20 cigarettes,
$1.50 tax per gallon of liquor
$.09 per gallon barrel of beer
$.40 per gallon of wine
$.235 a gallon on gasoline , $.24.3 on diesel
Maryland inheritance tax
Maryland exempts taxation if the estate passes to a spouse, child and/or relative of lineal descent, parent, grandparent or sibling. Any other transfer of estate is subject to a 10% tax rate. A tax return must be filed if the estate exceeds $1,000,000. This estate is taxed at 16%.
Maryland payroll taxes
State Disability Insurance – none
State Unemployment Insurance – 1.32% to 12.33%, wage base is $8,500. Employer contribution is 2.3% but if the employer is a construction firm form out of state, that rate is 9.4%
Maryland state property tax
Property must be assessed by Jan 1, annually and listed by March 15. The Maryland State property tax is 11.2 cents per $100 of assessed value. There is an additional assessment for local taxes, which ranges from $0.475 to $2.268. The Homestead Credit caps tax increases at 10% or less and there is a homeowner’s property tax credit for homes under $60,000 in value. Property tax bills are issued in July or August of each year.
Exemptions
Pension income exclusion stands at $23,600 for in certain cases. There are also a number of personal income credits available, such as a credit for buying health insurance.
Corporate income tax
The corporate tax rate in Maryland is 8.25%. This is modified if the corporation operates across multiple states. Proceeds from the corporate tax are paid into the Higher Education Investment Fund.
Misc
Social Security, railroad retirement income are not taxed under Maryland law.
Military personnel receiving their only income from the military pay will be exempt from taxes in Maryland. If they receive income in Maryland, military pay will not be used in their income calculation. They will not need to file tax returns. Blind veterans and spouses also receive special property tax exemptions.
When going forward with the task of filing Maryland taxes, you may acquire forms in three ways, which include requesting them by email, visiting local public libraries or post offices, or by printing them out from the actual website containing Maryland tax forms online. Prior to filing income taxes, there are certain requirements you must possess. In order to file, you must be a Maryland resident, have been required to file federal income tax returns, and have also fallen into the gross income filing requirements for the state.
According to Maryland tax laws, there are distinctions placed upon different categories of persons. The first general differentiation specifies whether you are single, the head of the household, married filing jointly, married filing separately, a widower, or a dependent taxpayer. In addition to this, there are divisions depending upon age, such as that of ranges from 65 and under to 65 and older. These are accompanied by their gross income requirements, which then determine their filing status. Aside from the actual compilation of your information for the purposes of your adherence to the state, you may also be eligible for personal income tax credits, which reduce the total amount of tax owed to the state.
Some examples of Maryland tax credits include “Child and Dependent Care,” “Poverty-Level,” and “Quality Teacher Incentive” credits. In order to qualify for a Child and Dependent Care Tax Credit, you must have, of course, claimed credit on you federal income tax return for that of a minor or for other “dependent care” costs.
Qualifications consist of the following: federally adjusted gross income must have been $50,000 or lower unless you are filing separately while married, in which case the range would be $25,000 or lower. State tax credit for this stems from the calculation of a percentage taken from whatever federal tax credit you are guaranteed for “child and dependent care.”
This percentage does fall, however, as those incomes rise. In addition, they may be eliminated from your options altogether if they reach a maximum quantity. In addition to such credits, individuals may also be eligible for college savings plans. This entails that you had put forth monetary considerations toward and of these 3: the Maryland Prepaid College Trust, Maryland College Investment Plan, or the Maryland Broker-Dealer College Investment Plan. In order to claim any deductions, you must use form 502.
In terms of the reception of refunds from your income taxes, you may look online as to the availability of such information. Your income tax return must be on hand in order for you to quickly ensure that the information provided was correct. In addition to this, you may also email the appropriate offices in relation to the state of Maryland. Pertinent information will include your name, social security number, and the refund amount request. In reference to the quickest means of acquiring a refund, you will do well to choose to file electronically as they are usually processed the day of.
Maryland State Tax: A Comprehensive Guide
Taxes are an important part of our everyday lives, and understanding the tax code is key to ensuring we pay what we owe while also taking advantage of available deductions and credits. Maryland, like all other states, has its own tax laws and regulations that individuals and businesses must follow. In this article, we’ll take a deep dive into Maryland state tax, including what taxes you may be subject to, how to file your taxes in Maryland, and some recent updates to the state tax code.
Overview of Maryland State Tax
Maryland has several types of taxes that residents and business owners may be subject to. The most common types include:
– Income tax: Maryland has a progressive income tax system with rates ranging from 2% to 5.75%. The exact rate you pay depends on your income level. Maryland residents must file a state income tax return if their income exceeds certain thresholds. For tax year 2020, the threshold for single filers under 65 is $10,000, and for married filing jointly it is $20,000.
– Sales and use tax: Maryland imposes a 6% sales and use tax on most goods and services. However, there are many exemptions and exceptions to this rule. For example, groceries and prescription drugs are exempt from sales tax, while certain services such as car repairs and haircuts are subject to a lower tax rate.
– Property tax: Property tax rates in Maryland are among the highest in the nation. County governments determine property tax rates, and they vary widely across the state. The average effective property tax rate in Maryland is 1.06%, which ranks 11th highest in the nation.
– Estate tax: Maryland is one of a handful of states that still imposes an estate tax. The tax rate is based on the value of the estate and ranges from 0.8% to 16%. For tax year 2020, the exemption amount is $5 million.
– Inheritance tax: Maryland also has an inheritance tax, which is imposed on certain transfers of property from a deceased person to their heirs. The tax rate ranges from 0% to 10%. There are many exemptions and exceptions to this tax, so it’s important to consult with a tax professional if you’re facing an inheritance tax situation.
Now that we have a good understanding of the types of taxes you may be subject to in Maryland, let’s take a closer look at how to file your taxes in the state.
Filing Your Maryland State Tax Return
If you’re a Maryland resident, you can file your state income tax return using the state’s online tax portal, which is known as Maryland iFile. This system allows you to file your return electronically and pay any taxes owing using a credit or debit card or bank transfer. Alternatively, you can file a paper return using Form 502 or hire a tax professional to file your return for you.
When filing your Maryland state tax return, be sure to have all of your pertinent financial information on hand. This may include your W-2 forms, 1099 forms, and any receipts or documentation related to deductions or credits you’re claiming. You should also review the Maryland tax code carefully to ensure you’re taking advantage of all available deductions and credits.
One key thing to keep in mind when filing your Maryland state tax return is whether you need to file a combined return if you or your spouse have income from more than one source. If you and your spouse both have income that’s subject to Maryland income tax, you must file a combined return using Form 502. This applies even if only one of you is a Maryland resident.
Recent Updates to Maryland State Tax Law
Like all state tax codes, Maryland’s tax laws are subject to change over time. Here are a few recent updates to the Maryland tax code that you should be aware of:
– Digital products tax: Beginning on March 14, 2021, Maryland imposed a sales tax on certain types of digital products. This includes audio and visual content such as movies, TV shows, and e-books, as well as digital downloads of games, software, and music. The tax rate is 6%, the same as Maryland’s regular sales tax.
– Pass-through entity tax: Maryland has become the first state in the nation to adopt a “pass-through entity tax,” which allows certain small businesses to avoid paying the new $10,000 cap on state and local tax (SALT) deductions. The new tax law allows pass-through entities such as partnerships and S-corporations to pay state income taxes on behalf of their owners at rates ranging from 3% to 5.75%.
– Unemployment compensation: The American Rescue Plan Act, signed into law by President Biden in March 2021, includes a provision that makes the first $10,200 of unemployment compensation tax-free for individuals earning less than $150,000. However, Maryland may not conform to the federal law, which could result in confusion for taxpayers. It’s a good idea to consult with a tax professional if you received unemployment compensation in 2020 to understand how it may impact your Maryland state tax return.
Conclusion
Maryland state tax can be a complex and sometimes frustrating topic for both individuals and businesses. However, with a little bit of knowledge and preparation, you can ensure that you’re not paying more tax than you need to while also staying in compliance with state tax law. Remember to keep all relevant documentation organized and to consult with a tax professional if you have any questions or concerns. With the right approach, you can keep your tax liabilities under control and avoid any unnecessary penalties or audits.
Introduction:
Taxes are an essential part of our society, ensuring that governments have the necessary funds to provide essential services like infrastructure building, healthcare, security, and more. In the United States, taxes are levied by both the federal and state governments, with each state having specific tax rules and regulations that taxpayers must follow.
Among all the states in the USA, Maryland is known for its relatively high tax rates. In this article, we will analyze Maryland’s tax structure in detail, highlighting key facts and figures that taxpayers need to know about.
Maryland’s Tax Structure:
Maryland has a graduated income tax system, which means that taxpayers pay taxes at different rates depending on their income levels. For example, in 2021, taxpayers earning less than $1,000 pay no taxes at all, while those earning between $1,000 and $2,000 pay at a rate of 2%. The highest tax rate of 5.75% applies to individuals earning over $250,000. Married couples filing jointly have the same tax rates as individuals with double the income brackets.
One unique aspect of Maryland’s tax system is that the state collects county taxes on behalf of each of its 24 counties and Baltimore City. County tax rates vary from 2.25% to 3.20%, depending on the location, and they are added to state taxes. This means that taxpayers can expect to pay more or less depending on their location within Maryland.
Maryland’s sales tax rate is 6%, and the state collects an additional tax of 2% for alcoholic beverages and a 6% tax on other tobacco products except cigarettes (15% tax on cigarettes). The state does not have any additional tax on gasoline sales. There is also a Maryland estate tax levied on transfers of estates valued at $1 million or more.
Property taxes in Maryland are determined by county assessments based on the property’s value. Counties set their rates, and homeowners must pay both state and county property taxes. In 2021, the state property tax rate was $0.112 per $100 of assessed value. Property taxes are the main source of revenue for local governments, and they fund essential services like public schools and public safety.
Additional Taxes and Fees:
In addition to the headlining taxes mentioned above, there are several additional taxes and fees that Maryland taxpayers need to know about. These include:
– Admissions and amusement tax: The state imposes a 6% tax on admissions to events like concerts, movies, and sporting events. There is also a 10% tax on amusement games.
– Alcoholic beverage tax: In addition to the sales tax, Maryland levies an additional tax of 9% on spirits and 5% on beer and wine.
– Bay Restoration Fund fee: In 2004, the State of Maryland established the Chesapeake Bay Restoration Fund to help fund efforts to clean up the polluted Chesapeake Bay. To finance this fund, Maryland levies a fee on wastewater treatment plants, septic systems, and certain products like fertilizer. In 2021, the fee was $7.50 per month for residential wastewater treatment.
– Corporate income tax: Maryland levies a corporate income tax on businesses operating in the state at a flat rate of 8.25%.
– Insurance premiums tax: Maryland imposes a 2% premium tax on insurance companies that operate in the state.
– Vehicle excise tax: This tax is imposed when a vehicle is titled in Maryland, and it varies depending on the value of the vehicle.
Impact of Taxes on Marylanders:
Maryland’s relatively high tax rates mean that taxpayers in the state pay more in taxes than residents of some other states. However, this is only part of the story, as the taxes collected by the state are used to fund essential services that benefit all residents.
For example, Maryland has some of the best public schools in the country, with highly educated teachers and modern facilities. These schools are funded in part by property taxes, which are paid by homeowners in the state. Maryland’s tax revenues also support important public safety initiatives like fire departments, police forces, and emergency medical services.
Another way that Maryland’s tax structure impacts residents is through the state’s transportation infrastructure. In recent years, the state has invested heavily in improving its roads, bridges, and public transportation systems. These investments have improved the daily lives of Marylanders by reducing traffic congestion and travel times, and making it easier to get around the state for work, school, or recreation.
At the same time, some of the taxes and fees mentioned above can be a burden for some Maryland residents. For example, the cigarette tax of 15% is one of the highest in the country, which can make it difficult for smokers to afford their habit. Additionally, the Bay Restoration Fund fee can add up for some homeowners, particularly those with large properties or failing septic systems.
Conclusion:
Overall, Maryland’s tax structure is designed to ensure that the state has the necessary funds to provide essential services for its residents. While some taxes and fees may be seen as a burden for certain individuals or businesses, others benefit the state as a whole and support the quality of life enjoyed by Marylanders.
As always, it is important for taxpayers to stay up-to-date on the latest tax regulations, and to consult with a tax expert if they have any questions or concerns. By doing so, they can ensure that they are compliant with the law and are not underpaying or overpaying their taxes.