Question

Why is TurboTax is saying I have Maryland state tax due when the right state tax amount was deducted? I live in another state and filing a MD return as Nonresident.

Forum|Forum|3 years ago
February 25, 2023
1 reply
0 views

I live in another state and filing a MD return as Nonresident. Is MD supposed to tax me only on the income I made in MD? If that's the case, then the right MD state tax amount was deducted; why am I told by Turbotax that I have $1150 MD state tax due when I made
$18,508.00 income and MD deducted $1,147 in MD state tax; this latter amount is what I got when I used the MD tax calculator. Or is MD tax rate also applied on my other income made in the state where I live?

TurboTax Deluxe Online

E

ErnieS0

Yes, Maryland only taxes nonresidents on income earned in the Old LIne State.

The most common reason for owing a large amount of Maryland tax is that your employer did not withhold county tax. Many Maryland counties have a county tax that's added to your MD return.

Check your W-2. Do you have local wages and withholding on lines 18-20? Next, check lines 17 and 18 on Form 505NR. You will are either being charged the 2.25% special nonresident tax or a county tax.

A second reason you may owe tax is because Maryland uses your total income to set your base tax rate. You are then taxed on the Maryland percentage of the total tax you would pay if all your was earned in Maryland.

That means nonresidents often end up with a higher tax rate than the withholding rate on their W-2, meaning they end up owing tax.

You can see this computation on lines 154-16 on Form 505NR.

**Say "Thanks" by clicking the thumb icon in a post**Mark the post that answers your question by clicking on "Mark as Best Answer"

A

abdakhamaAuthor

Thank you for your answer, ErnieS0!

I can't see lines 154-16 on Form 505NR until I file, or can I? I think Turbotax doesn't generate the forms until a person files, is that right? If I could see the form 55NR that Turbotax generated I could easily make sense of the numbers and the calculations.

For now, I still think something is weird. Because, when I used the MD tax calculator, and even if I don't claim any exemption or make any deductions, the MD state tax, even for a single with no dependent, comes up way less than what the total of what has been deducted by MD already and what Turbotax is asking me to pay to MD. I have been filing for 1 years as a NR of MD, first that the amount doesn't seem to make sense. It would make sense to go over the form 505 and 505NR, I may switch to another provider.