topic Maryland Taxes and Social Security in Retirement tax questions

Maryland Taxes and Social Security

icom730 — Sun, 09 Feb 2020 12:05:18 GMT

While completed my taxes, I was getting a refund from Maryland. As soon as I entered my Social Security Income I all of a sudden owed a large amount for Maryland. I thought Maryland did not tax Social Security income. Am I missing something here?

Thank You

Re: Maryland Taxes and Social Security

DavidS127 — Sun, 09 Feb 2020 13:47:39 GMT

Maryland does not tax social security, even if it is taxed on your federal return. Maryland does, however, have a pension exclusion "deduction" that considers how much social security you receive. If you have a pension other than social security, when you entered your social security the amount of pension taxed would have increased by the same amount.

If your social security (SSA-1099) was properly entered in TurboTax, and any portion is shown as taxable (line 5b of Form 1040), check the "subtractions" on your Maryland return. You should see any federally taxable social security deducted there.

Re: Maryland Taxes and Social Security

dmertz — Sun, 09 Feb 2020 14:07:21 GMT

What you are likely missing is that the maximum amount of pension income allowed to be excluded from Maryland income for 2019 is $31,100 minus your Social Security income and when you entered the Social Security income, your pension exclusion dropped. That makes it appear as if part of your Social Security income is taxed, when in fact it's pension income being taxed that otherwise would not be taxed.