I recently moved to MD. My salary doesn't deduct the state taxes, only the federal taxes. Can I not pay state taxes now but plan to pay when filing taxes in Jan 2024

[Vanessa A · Accepted solution]

If you do not pay state taxes now, you will be hit with an underpayment penalty and interest when you file in 2024.  It is best if you make quarterly payments to avoid penalties. 

Maryland Tax Connect

[beeg203298]

Thank you. I wanted to know whether I can pay my taxes via the comptroller's office in MD and file them using TurboTax. Or should I file them through the same service (comptroller of MD online) where I paid my taxes? 

[Vanessa A]

You should pay them quarterly through the comptrollers office.  You could then file the return in 2024 through TurboTax and enter the estimated payments you made through the year to the comptrollers office. 

When you do this you will select the following:

• Federal
• Deductions and Credits
• Show More next to Estimates and Other Taxes Paid
• Estimated Tax Payments

[beeg203298]

Thanks, should I be selecting state, instead of federal to add the 

• Estimated Tax Payments

[Vanessa A · Accepted solution]

No.  The spot where you add the state estimated payments is in the federal section.

But, this is for next year after you make the payments.  

[TomD8]

Why isn't your employer withholding MD taxes?  Is your job located in a neighboring state?

[beeg203298]

Yes, My job is located in a neighboring state (Nebraska). The employer said they could not deduct it as it is a state that is not comparable to Maryland. 

[TomD8]

@beeg203298 --

Be aware that Nebraska is one of very few states that have a "convenience of the employer" rule for non-resident remote workers.  Here is the text of Nebraska's law:

"If the nonresident's service is performed without Nebraska for his or her convenience, but the service is directly related to a business, trade, or profession carried on within Nebraska and except for the nonresident's convenience, the service could have been performed within Nebraska, the compensation for such services shall be Nebraska source income."

https://www.law.cornell.edu/regulations/nebraska/316-Neb-Admin-Code-ch-22-SS-003#:~:text=Compensatio...

Nebraska can tax non-residents on "Nebraska source" income.

A bill has been introduced in the Nebraska legislature which would repeal its "convenience of the employer" rule, but that bill has not yet been passed.

https://legiscan.com/NE/text/LB173/2023

[beeg203298]

Thank you very much for this note. Right now, I am a resident alien for tax purposes.  I moved to MD as part of the job requirements (required by my employer at NE). With this background, can my employer still possibly deduct my state taxes for MD? 

[TomD8]

If your employer required you to move to MD, then you have no tax obligation to NE.  You're not working in MD for your own convenience, but rather because your employer requires you to do so.  Hence NE's "convenience of the employer" statute does not apply.

An employer who is not subject to the jurisdiction of MD is not required to withhold MD taxes, but they may do so voluntarily.

https://www.marylandtaxes.gov/forms/current_forms/Withholding_Guide.pdf