topic Not sure how to answer question regarding Maryland withholding tax in State tax filing

Not sure how to answer question regarding Maryland withholding tax

Wendy71 — Thu, 11 Mar 2021 00:40:35 GMT

Maryland requires income tax withholding for any compensation paid to individuals for personal services.

Turbo Tax Business product for MD State. It is asking whether we filed these returns but it is not clear which returns it is looking for and what is meant by 'personal services'. Is this referring to the withholding for our W2 employees? Or is it referring to individuals OTHER THAN our employees? Please clarify so that I can answer the question correctly.

Re: Not sure how to answer question regarding Maryland withholding tax

ThomasM125 — Thu, 11 Mar 2021 01:32:43 GMT

The reference is in the instructions to form 500 and states "Employers that make payments to individuals of salaries, wages, or compensation for personal services" need to withhold income tax. You are not required to withhold taxes for subcontractors, however, since you are not their employer. So, it is referring to your W-2 wages only.

Re: Not sure how to answer question regarding Maryland withholding tax

Wendy71 — Thu, 11 Mar 2021 02:20:54 GMT

Thank you for the clarification. I guess the word "required" in the question was the tip that they were referring to employees and not subcontractors. I appreciate the help!