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February 18, 2021
Question

I paid state tax for the first time this year in MD. Usually receive a couple hundred and owed a couple hundred instead. 0 exemptions. Is MD doing something different or did my employer mess up ?

  • February 18, 2021
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1 reply

JohnB5677
February 18, 2021

For 2020, the rate of withholding for Maryland residents is 5.75% plus the local tax rate.

 

For Maryland nonresidents the rate is increased to 8.0% (the resident rate of 5.75% plus the nonresident rate of 2.25%).

 

For Maryland residents employed in Delaware the rate is 3.2%. Maryland local income tax rate changes for 2020.

 

There are three factors that will determine the size of your state refund (or what you owe).

  1. The total amount of income that you have.
  2. The amount you had withheld from your wages.
  3. Whether you qualify for certain tax credits.

Your income determines the amount of tax you owe.  This not only includes your wages, but also any other type of income you may have had.  A relatively small side job that issued a 1099-NEC could generate a substantial tax.  Based on criteria established by the your state there are tables that determine the amount of tax that you owe.   Be sure that the state wages are correct.

 

The amount you had withheld generally come from your W-2 income; however, taxes can be withheld from other forms of income.  If the taxes withheld is more than what you owe you will get a refund.  If not, you will owe money.  You may have paid Federal taxes, but did you also have something withheld for the state.

 

You can subtract Tax Credits from the amount of tax you owe.   Each state sets a different criteria for their credits.

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