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Most members of the military, establish residency in non income tax states for this reason. Only military pay of non-residents is not taxed. Your home residency state may tax your military pay.
If you are a legal Maryland resident and a member of the military, you must file a resident Maryland income tax return, using Form 502, and report all income from all sources, wherever earned. You do not lose your resident status if you are stationed outside of Maryland during the taxable year.
Local income tax
Resident military personnel who develop a state income tax liability in Maryland are also liable for the local income tax. As a resident, you are subject to the local income tax regardless of whether you were stationed in Maryland or not.
Retirement income
If you are a retired member of the military, you may be able to subtract up to $5,000 of your military retirement income from your federal adjusted gross income before determining your Maryland tax.
Overseas pay
If you earned active duty income overseas outside the U.S. boundaries or possessions, you may be able to subtract up to $15,000 in overseas pay.
Estimated taxes
You or your civilian spouse must file estimated tax returns if your estimated Maryland taxable income not subject to employer withholding results in a tax liability exceeding $500. For more information, see Estimated Taxes. For more information about the filing situation for military residents in Maryland, see Instruction 29 in the Maryland resident tax booklet.
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