If you are a Maryland (MD) resident then all worldwide income must be included on your state tax return. This includes any interest earned from anywhere in the world, including another state.
If you meet the filing requirements for the state where the interest is derived from, then you may also have to file a nonresident state tax return. If this situation occurs, you may have a credit on your resident state return.
The credit for taxes paid to another state on the same income is used on your resident state because they do not want you to pay taxes twice on the same income. The credit allowed is the lesser of:
- the tax liability actually charged by the nonresident state, OR
- the tax liability that would have been charged by the resident state
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