Nonresidents
If you are a nonresident of Maryland, you are required to file a nonresident Maryland income tax return (Form 505)
if you have income derived from:
- Tangible property, real or personal, permanently located in Maryland;
- A business, trade, profession or occupation carried on in Maryland; or,
- Gambling winnings derived from Maryland sources.
You are not required to file as a nonresident if:
Nonresidents who work in Maryland or derive income from a Maryland source are subject to Maryland's 4.75 percent income tax rate for tax year 2007, as well as a special nonresident tax rate of 1.25 percent. By law, the nonresident tax rate must equal the lowest local income tax rate paid by Maryland residents (currently 1.25 percent) combined with the top state tax rate. For tax year 2008, employers must withhold Maryland income tax at a rate of 6.75 percent for nonresidents (since the top state tax rate for 2008 is 5.5 percent).
Nonresident taxpayers may either use Maryland's standard deduction or itemize deductions. You may elect to use the standard deduction whether or not you itemized deductions on your federal income tax return. You may itemize deductions on your Maryland return only if you have itemized them on your federal return. Deductions and exemptions must be apportioned using the ratio of Maryland income to federal adjusted gross income.
Nonresident sale of property
If you are a nonresident who owned and sold or transferred real property and associated tangible personal property in Maryland, you must make a tax withholding payment to the local clerk of the circuit court or the Maryland Department of Assessments and Taxation (MDAT). The payment must be made before the deed or other instrument of transfer is recorded with the court clerk or filed with MDAT. For more information, see Withholding Requirements for Sales of Real Property by Nonresidents
