A CPA is doing my deceased mother's taxes and filing a non-resident tax form. They are having a problem because Maryland is charging more in taxes then my mother earned in the state of Maryland. They use the professional version of Intuit.
I paid Intuit $45 for the Maryland State Returns, followed easy step to report income I also earned in MD as a non-resident and it has me paying over $100 than what I earned in the state of MD. I know MD taxes are high but Wowee! This doesn't seem right.
So I went to this link:
And used the state of MD estimated tax calculator, using the values they asked for from the Form 505NR in Turbo Tax. Turbo Tax says I owe $1,479. The state of MD estimated tax calculator says my tax owed is $264. What is up with that. Something isn't right.
I think there is a problem and I think I should get a refund of the $45 I paid for the state forms.
I would suggest you go thru the entire MD non-resident section of the interview again, just to check the numbers you allocated to being MD income. Occasionally, people miss a decimal point, or double-hit a key and end up with a grossly inflated income number.
But, If both the professional CPAs, with the pro version, and you with the consumer version are both having a similar issue, it might be a recent update to the MD software that got kluged up. You could call TTX support to report the problem....and they could get a diagnostic file from your MD-containing tax file to check out the situation;
@dmertz I think you do MD stuff.
Can y'all do a MD nonresident to check the current MD tax calculations? If you have the time.
Maybe $100k income for a TX resident with $10k from working in MD as nonresident (If you have the most recent MD software).
I don't see any obvious problems preparing a simple Maryland nonresident tax return. Form 505NR calculates what your Maryland state tax would have been had all of your taxable income been Maryland income, calculates the effective tax rate, then applies the effective tax rate to just your Maryland net taxable income. It then calculates a 2.25% special nonresident tax and the two get combined on Form 505. An examination of Maryland Form 505NR should identify any problem with the tax calculation.
I would expect the sum of the regular tax and special nonresident tax to be between 2.25% (only special nonresident tax if Maryland net taxable income is $3,000 or less) and 8% (maximum regular tax bracket of 5.75% plus 2.25% special nonresident tax) of Maryland net taxable income.
I just downloaded the MD state tax, this week. I followed Easy Step. Earned $1,633 in Maryland income, Expenses of $267. Net $1,366. Decimals in the correct places. Turbo Tax says I owe $1,479 to the state of Maryland. That ain't 2.25% or 8%. My CPA is having the same issues doing my mother's return. I will call Turbo Tax.
I just went through the Easy Step one more time. I'm in Texas and not used to doing state returns, got a totally different tax due at a more reasonable amount. The first time I went through the process, there weren't as many steps. Thanks for your replies.
Again, review Form 505NR where the Maryland nonresident tax calculation is done. The reason for the seemingly incorrect Maryland tax should be apparent on that form.
Make sure that you have entered your non-Maryland income correctly. (You are to indicate the amounts that were earned in other states. The remainder is what you earned in Maryland.)