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Eskomao
New Member

TurboTax maybe incorrectly calculate the new 2% Maryland capital gains surcharge for part-year residents. Apply to all capital gains instead of those earned in MD.

MD Taxable income over 350k. Move out of MD in 2/28/2025. Capital gain $60k . Out of 60k capital gain ,only 20k was earned while residing in MD. Surcharge 2% is calculated based on total $60k capital gain instead of 20k.
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3 Replies
AmyC
Employee Tax Expert

TurboTax maybe incorrectly calculate the new 2% Maryland capital gains surcharge for part-year residents. Apply to all capital gains instead of those earned in MD.

Follow these steps:

  1. Open your return to Maryland.
  2. On the summary screen, select Income
  3. scroll down
  4. Select done with income
  5. Additional Info for Par-Year Residents
  6. Enter Non-Maryland income - this is wages, capital gains, all income not taxable to MD (including your $40k in capital gains)
  7. Continue

Warning: MD looks like it is taxing all income from everywhere for the whole year and calculating a tax liability. Well, they are. Then, they take that amount and multiply it by the % of MD income out of the total income. 

You can find both total and state incomes on Form 502 in the software, under the PY dates and you can see the MD % of income.

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Eskomao
New Member

TurboTax maybe incorrectly calculate the new 2% Maryland capital gains surcharge for part-year residents. Apply to all capital gains instead of those earned in MD.

The issue is for year of 2025, Maryland  introduced 2% surcharge on capital gain for income > $350k. 

For part-year resident, turbo tax calculates 2% surcharge based on 2025 total capital gain instead of capital gain you earned while residing in Maryland.  And I cannot find a way to get around using web turbo tax.

AmyC
Employee Tax Expert

TurboTax maybe incorrectly calculate the new 2% Maryland capital gains surcharge for part-year residents. Apply to all capital gains instead of those earned in MD.

The program is pulling your federal income, triggering the tax regardless of the MD income. I am using the desktop version and can go into forms mode when needed to make adjustments while you are online. 

For this year, I recommend you switch to desktop. It is very easy and you pick up right where you left off plus you can fix the issue by switching to Forms mode. You may be able to enter the correct $400 or you may need to right click and override. 

 

Once you override a value, go back through step by step and see if the program picks it up, then you can cancel the override. You don't really want to file with an override; if you can help it, because that voids the accuracy guarantee. In your case, I bet your taxes are perfect by the time you file, so you may not be concerned.

 

See How do I switch from TurboTax Online to the TurboTax software?

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