Maryland State Tax Exemption

[Bsantos]

Hi,

My wife is a military spouse that works in Maryland. Our home state is Florida, we recently moved from Alaska where she technically established residency. Can she put either of these 2 states as her domicile state to avoid state tax withholding?

If it matters, we just bought a house in Maryland but haven’t changed our drivers license or anything.

thanks! 

[BillM223]

It depends. Your spouse is not military, right? But she is earning non-military income in Maryland, right?

If so, she (y'all) need to file a nonresident Maryland return which means that you can't/shouldn't avoid Maryland withholding.

Please see this Maryland FAQ for the details, and to confirm that I understand your situation correctly.

[Bsantos]

Correct, spouse is not military and earning non-military pay. Thank you for the link!

[TomD8]

Per Maryland Administrative Release #1:

"a military servicemember’s civilian spouse who is domiciled in a state other than Maryland and who is in this State solely to be with the servicemember serving in compliance with military orders is a nonresident of the State regardless of how long the civilian spouse has resided in the State, and ... is not subject to Maryland taxation on income for services performed within this State (e.g. wages, salaries or tips) "

Administrative Release No (marylandtaxes.gov)

If she has not done so already, your spouse should submit Maryland Form MW-507M to her Maryland employer to exempt herself from MD withholding.

TY-2021-MW507M.pdf (marylandtaxes.gov)