Maryland tax was correctly withheld from your pay because you were hired on the assumption that you would be a Maryland-based employee, but are temporarily working remotely due to the pandemic.
The Comptroller of Maryland issued guidance that Maryland withholding requirements are not affected by the shift from working in an office to teleworking for Maryland employees.
Generally, Maryland imposes income tax, and therefore a withholding requirement on employers, for employees living in Maryland and on non-residents receiving Maryland-sourced income. Income is deemed Maryland-sourced income when the income is compensation for services performed in
File a non-resident Maryland income tax return with TurboTax. To learn more see How do I file a nonresident state return?
Just a followup: so even though I am teleworking from FL and have been since beginning my employment, the work I perform is considered to be as if I was working in the state of MD since that is my work location and therefore I have to pay the MD state tax, but as a non-resident since I do not actually live in the state?
@dwb4997 You are correct, since you are teleworking for a Maryland based company, your income is considered ""Maryland-based", so you would file a non-resident tax return. However, this is a temporary regulation based on the emergency declaration in Maryland, so you should review the requirement going forward, as your income would not normally be taxable in Maryland if you don't work there.
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A quick follow up to the most recent response for which I am thankful. It got me thinking about these 2 questions:
Does it change my current 2021 and or 2020 tax situation at all if the company that I work for has other full time employees working at a permanent company office in FL? They are full time residents of FL (like me), but their positions have always at the FL office location, even prior to Covid, but does this make a difference for me now? Would the company have to change my actual work position to the FL location in order to discontinue the necessity of the state of MD tax withholding?
On the topic of the MD Governor's emergency order, if he were to lift that in the future, but I did not return to work because the company was not ready to have employees come back to the MD work site, would that be a scenario under which I would consider changing my withholding to the state of FL, under such time as I was told to report to the MD work location, since I am actually not "working" in MD?
You would probably not pay Maryland non-resident income tax if you were reassigned to your company’s permanent Florida office. These questions are facts and circumstance based and I don’t know how your Florida employees are taxed. I assume your company considers employees who work or telework out of the Florida office to be Florida-based rather than Maryland-based so they are probably not paying Maryland income tax.
Take to HR. See if they can “transfer” you to the Florida office. You can also speak to them about what would happen if you were to stay in Florida as a teleworker but are still reporting to the Maryland office.