The program does not seem to be following the minimum filing level for taxpayers 65 and older of $27,300 for a joint return, one spouse over 65 and is instead calculating tax due. Excluding social security income, which is not supposed to be included, our income is below that level. It seems that it may be related to an early withdrawal penalty being included as income.
TABLE 2
MINIMUM FILING LEVELS FOR TAXPAYERS 65 OR OVER
Single, age 65 or over. . . . . . . . . . . . . . . . . . . . . . . $ .14,700
Joint Return, one spouse, age 65 or over. . . . . . . . . . $ .27,300
Joint Return, both spouses, age 65 or over . . . . . . . . $ .28,700
Married filing separately, age 65 or over . . . . . . . . . . $ 12,950
Head of Household, age 65 or over. . . . . . . . . . . . . . $ 21,150
Qualifying widow(er), age 65 or over. . . . . . . . . . . . . $ .27,300
The MD tax return filing requirement includes federal taxable social security and is later removed from taxable income. Please see line 11 of Resident Form 502.
Any tax due should not include Social Security. Please preview your state tax return to ensure the Social Security is removed.
Social Security affects the pension exclusion available, a maximum of $34,300. See 502 Instruction Booklet for more information.
To preview your return online:
To see in desktop:
Thanks. Good info, but not quite what I am after. I opened the minimum filing worksheet and the problem seems to be in taxable interest income which includes an early withdrawal penalty which is later adjusted in the federal form, but is showing up as the full amount here and bumping the Maryland gross income over the minimum filing level.
The Maryland (MD) return begins with the federal adjusted gross income. This figure is already adjusted for the early withdrawal penalty on your federal return. For this reason you will not see a subtraction separately on your MD return.
Please update if you have more questions.
Hello. That is true for the 502 form, but the Minimum Filing Level Worksheet is using the the full interest number as income and the penalty is not reflected anywhere. The additional amount puts us over the minimum. I don't know if this is by design or if there is an error in the form.
MD does have different filing requirements for seniors that is higher. Perhaps you qualify as a senior. See Senior Filing Requirements.
Interest can be taxable to the state but not the federal so it could be a safety net, I have nothing to do with the program design.