Why is TurboTax is saying I have Maryland state tax due when the right state tax amount was deducted? I live in another state and filing a MD return as Nonresident.

[abdakhama]

I live in another state and filing a MD return as Nonresident. Is MD supposed to tax me only on the income I made in MD? If that's the case, then the right MD state tax amount was deducted; why am I told by Turbotax that I have $1150 MD state tax due when I made 
$18,508.00 income and MD deducted $1,147 in MD state tax; this latter amount is what I got when I used the MD tax calculator. Or is MD tax rate also applied on my other income made in the state where I live?  

[ErnieS0]

Yes, Maryland only taxes nonresidents on income earned in the Old LIne State.

The most common reason for owing a large amount of Maryland tax is that your employer did not withhold county tax. Many Maryland counties have a county tax that's added to your MD return.

Check your W-2. Do you have local wages and withholding on lines 18-20? Next, check lines 17 and 18 on Form 505NR. You will are either being charged the 2.25% special nonresident tax or a county tax.

A second reason you may owe tax is because Maryland uses your total income to set your base tax rate. You are then taxed on the Maryland percentage of the total tax you would pay if all your was earned in Maryland.

That means nonresidents often end up with a higher tax rate than the withholding rate on their W-2, meaning they end up owing tax.

You can see this computation on lines 154-16 on Form 505NR.

[abdakhama]

Thank you for your answer, ErnieS0!

I can't see lines 154-16 on Form 505NR until I file, or can I? I think Turbotax doesn't generate the forms until a person files, is that right? If I could see the form 55NR that Turbotax generated I could easily make sense of the numbers and the calculations.

For now, I still think something is weird. Because, when I used the MD tax calculator, and even if I don't claim any exemption or make any deductions, the MD state tax, even for a single with no dependent, comes up way less than what the total of what has been deducted by MD already and what Turbotax is asking me to pay to MD.  I have been filing for 1 years as a NR of MD, first that the amount doesn't seem to make sense. It would make sense to go over the form 505 and 505NR, I may switch to another provider.

[armando50]

I filed my taxes for Maryland and when i files i didn't add my w-2 for Maryland on my tax return for 2024 and on line 41 (2024 estimated tax payments, amount applied from 2023 return, payment made with an extension request and form mw506NRS............. I put $474) and i put myself as a part-year resident. So I amended my tax return and added my w-2 from Texas and Maryland both jobs i worked, and in Texas i worked 7 months and in Maryland I worked 1 month and on my amended return after adding those W-2's I accidentally put Full- year resident on my 502x and it taxed me on my income i made in Maryland, so now Maryland says i owe $352 in taxes I don't know what is going to happen since both my original and amended state tax returns are processing

[KeshaH]

If you'd like, we can look at your return and see exactly what you see to  help come to a resolution. The return will be scrubbed and won't include any of your personal details.

If you're using TurboTax Online:

Once you're logged in to your account,

- on the left hand panel, click on Tax Tools and then choose Tools

- on the pop up window, select Share my file with Agent

- you'll see a message saying you'll give us a copy of your tax return. Your personal information will be changed so we can't see any private information.

- click okay and you'll get another message with a token

If you're using TurboTax Desktop:

• Click on Online in the top menu of TurboTax Desktop for Windows
• Select 'Send Tax File to Agent'
• Write down or send an image of your token number and state then place in this issue.
• We can then review your exact scenario for a solution

Please reply to this message with your token so that we can further assist you. Let us know all the states, if any, that are included on the return.

@armando50 

[armando50]

My tax token is 1278608

[armando50]

Never mind it's 1278610

[KeshaH]

Thank you for sending over your token. I'm looking over your return.

The W-2s that are currently entered in the return don't show any MD tax withholding. Review your W-2s and enter the correct amount of tax withheld for MD in box 17. Next, be sure to allocate your income to Maryland so that it can be properly reported.

@armando50 

[armando50]

I didn't have no taxes withheld on my MD tax return on my W-2 

[KeshaH]

I see that you live in Texas. Did you actually physically work in Maryland or did you just work remotely for a company that was based in Maryland? If you didn't actually work in Maryland, you won't actually need to file a Maryland return because none of your income would be taxable to Maryland.

[armando50]

Yes I physically worked there in Maryland.

[KeshaH]

Thank you.

From what I now understand, one of your W-2s was from Maryland sources and there was no withholding. When you originally filed your return, you didn't include your Maryland income. When you went back to add the Maryland income, all of your income was being taxed for Maryland. Now you need to amend your Maryland return to only show the correct amount of income (from the Maryland W-2).

It looks like you've already started making the adjustments to the income and allocated the correct amount to Maryland, which is a great start.

Next, you'll need to set up an amended return. On the page that says your 2024 returns are ready to be checked, click Edit next to Other situations. Then choose Start or Revisit next to Amend a Previous Maryland Return.

Next, you'll need to complete column A based on your original Maryland Return. Column C should be based on the changes that you've made to your return already. Once you update column A, that will cause column B to calculate to the correct numbers.

Wait until the first version of your Maryland return finishes processing before you file this one.