typically your resident taxes all your income including wages
Is my filing to MA correct? I should not pay state tax there as I was NR?
here's what MA says
In General. Under M.G.L. c. 62, § 5A(a), income of a non-resident derived from a trade or business, including any employment, carried on in the Commonwealth is sourced to Massachusetts. Pursuant to this rule, all compensation received for services performed by a non-resident who, immediately prior to the Massachusetts COVID-19 state of emergency (3/10/2020) was an employee engaged in performing such services in Massachusetts, and who is performing services from a location outside Massachusetts due to a Pandemic-Related Circumstance will continue to be treated as Massachusetts source income subject to personal income tax under M.G.L. c. 62, § 5A and personal income tax withholding pursuant to M.G.L. c. 62B, § 2.
Why MD state tax calculation comes very high at 8.5%? (not if you are also subject to a local income tax)
For tax year 2020, Maryland's personal tax rates begin at 2% on the first $1000 of taxable income and increase up to a maximum of 5.75% on incomes exceeding $250,000 (or $300,000 for taxpayers filing jointly, heads of household, or qualifying widow(ers). in addition,
Maryland's 23 counties and Baltimore City levy a local income tax which we collect on the state income tax return as a convenience for local governments. The local income tax is calculated as a percentage of your taxable income. Local officials set the rates, which range between 2.25% and 3.20% for the current tax year.
You should report your local income tax amount on line 28 of Form 502.
Shall I add MA withheld as a credit? NO. the only time you can take a credit is if you actually have a tax liability in MA. then the credit is based on your actual tax liability, not the withholding amount. if you are subject to MA tax that return must be prepared first so you get the proper credit on MD.
