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Do I have to pay Maryland state taxes on my foreign earned income?

I moved to Japan in August 2015. I live and work in Japan, thus I receive income that is not from Maryland. However, my work here is temporary (max 5 years) and I will return back to my parent's home at the end (or maybe buy a house of my own in the states or a foreign country, who knows!). Since my parent's home is in MD, and I am registered to vote in MD, I am filing as a "full-year resident".

I have been getting a lot of contradictory information regarding whether I pay state taxes on my Japanese income. Could someone clarify the details?
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Accepted Solutions
ToddL
New Member

Do I have to pay Maryland state taxes on my foreign earned income?

 If MD is your "state of domicile" then you are a MD resident for tax purposes. 

Your income, wherever earned, is subject to MD taxation. Since MD uses your adjusted gross income to calculate MD tax, any foreign earned income excluded on the federal return will be excluded from your MD return.

In general, you must file a Maryland return if you are or were a resident of Maryland AND you are required to file a federal return. You are a resident of Maryland if your permanent home is or was in Maryland (the law refers to this as your domicile). 


“Domicile” is not defined by statute, but has been defined by the appellate courts of this State to mean “...that place where a man [or woman] has his [or her] true, fixed, permanent home, habitation and principal establishment, without any present intention of removing therefrom, and to which place he [or she] has, whenever ... absent, the intention of returning.”2 The courts have also held that once domicile is established, it continues until superseded by a new domicile. Domicile is a question of intent. It is established by the individual intending to treat a place as the person’s true, fixed, and permanent home. 

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2 Replies
ToddL
New Member

Do I have to pay Maryland state taxes on my foreign earned income?

 If MD is your "state of domicile" then you are a MD resident for tax purposes. 

Your income, wherever earned, is subject to MD taxation. Since MD uses your adjusted gross income to calculate MD tax, any foreign earned income excluded on the federal return will be excluded from your MD return.

In general, you must file a Maryland return if you are or were a resident of Maryland AND you are required to file a federal return. You are a resident of Maryland if your permanent home is or was in Maryland (the law refers to this as your domicile). 


“Domicile” is not defined by statute, but has been defined by the appellate courts of this State to mean “...that place where a man [or woman] has his [or her] true, fixed, permanent home, habitation and principal establishment, without any present intention of removing therefrom, and to which place he [or she] has, whenever ... absent, the intention of returning.”2 The courts have also held that once domicile is established, it continues until superseded by a new domicile. Domicile is a question of intent. It is established by the individual intending to treat a place as the person’s true, fixed, and permanent home. 

Do I have to pay Maryland state taxes on my foreign earned income?

Thank you so much! However, I have read that MD doesn't recognize the foreign income exclusion... Is this correct? Or is it only in some cases?
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