Withholding Taxes: Maryland

Federal law and guidance on this subject should be reviewed together with this section.

Author: Vicki M. Lambert, The Payroll Advisor

Summary

• Income tax withholding rules differ depending on whether an employee is a Maryland resident, nonresident, or works for the employer in a state that does not have a reciprocal withholding agreement with Maryland. See Withholding on Residents, Nonresidents and Expatriates.
• When hired, all employees must complete and submit to their employer a state withholding exemption certificate. The spouse of a military servicemember may be exempt from Maryland income tax withholding on income from services performed in Maryland if certain conditions apply. See Employee Withholding Forms.
• A set withholding rate applies to payments of supplemental wages, such as bonuses. See Supplemental Wages.
• Employers must provide electronic or written notice to employees who may be eligible for the state Earned Income Tax Credit. See Earned Income Tax Credit Notices.
• Employers must keep all records pertaining to the payment of wages and the deduction and withholding of Maryland income tax for a certain number of years. See Recordkeeping Requirements.
• Baltimore and Maryland counties have requirements pertaining to income tax withholding. See Local Requirements.