Maryland Part-Year return: Non-Maryland Income / Non-Maryland Losses and Adjustments

[brilly123]

My wife and I lived in Maryland for most of 2020, but on 2020-10-31 we arrived in Florida and have lived here ever since.  In particular, we have made it our current state of residence (e.g. in 2021-03 we acquired Florida driver's licenses, registered to vote, etc).

Consequently, in TurboTax I said during the interview that we moved to a new state, and that Florida was our new state of residence as of 2020-10-31.

I finished my Federal return the other day.  I do not recall TurboTax asking me any questions about what income was earned while we lived in each state.

But now I am doing my Maryland return.  TurboTax correctly suggested that we file a Part-Year return.  I am now at the stage in the interview where TurboTax is asking about "Additional Info for Part-Year Residents".

There are 2 text fields where I can enter numbers: "Non-Maryland Income" and "Non-Maryland Losses and Adjustments".

For "Non-Maryland Income", I THINK that I am supposed to enter here the sum total of all income (e.g. salary, interest, dividends, capital gains, unemployment benefits, etc) that my wife and I made starting on the day we arrived in Florida (2020-10-31).

Please confirm or correct my understanding.

Given that understanding, I calculated it by exporting from Quicken a 2020 Tax Report, which I then opened in a spreadsheet program and manipulated until I could calculate the desired sum.

Two income sources deserve special mention.

First, my wife has continued to this day to work remotely for her Maryland employer.  But our understanding is that Maryland does not tax you if you live in another state, even if your employer is in Maryland.  (You can see this in my wife's paystubs: once her employer was given our Florida address, they stopped withholding Maryland income tax.)  So, I included my wife's salary from her Maryland employer starting on 2020-10-31 in that sum.

Second, I received unemployment benefits paid by Maryland.  I have gone ahead and likewise included my Maryland unemployment benefits starting on 2020-10-31 in that sum.  But this may be more questionable.

Please let me know if I did anything wrong here.

My final question is about the "Non-Maryland Losses and Adjustments".

What exactly is that, and how am I supposed to calculate it?

Thanks in advance.

[ThomasM125 · Accepted solution]

You are correct in that you don't get taxed in Maryland for income earned while you are a resident of Florida. There may be an exception for that in the case of unemployment income, however, as that was earned while you where a resident of Maryland. Since that is Maryland-sourced income, it is most likely taxable in Maryland, but you would have to contact the Comptroller's office to verify that, the number is 410-260-7701.

Non-Maryland losses and adjustments would be adjustments to income as reported on your federal schedule 1, but only the portion that applies to the time spent in Maryland.

[brilly123]

ThomasM125: thanks for your answer.

I called the Maryland Comptroller's office number that you gave as [phone number removed], but that number turns out to be dedicated to their "Refund Information Line", so no good for me.

I instead called the main Maryland Comptroller's office number, 800-MDTAXES, and was able to reach a human within 1-2 minutes.  That is about the first time anyone in Maryland government has picked up the phone for me in over a year...

Unfortunately, the lady that I spoke with had no idea if my Maryland Unemployment benefits collected once I moved to Florida can be treated as non-Maryland income.  That lady referred me to the 2020 version of Form 502LU, which she said had more information.  I see nothing in that form regarding part year residents like myself.

I am going to go ahead and leave that portion of Maryland UI benefits collected once I moved to Florida as non-Maryland income, unless someone points me out to a definitive answer otherwise, since we are treating my wife's income earned from her Maryland employer as non-Maryland income now that she is working remotely.

For the benefit of anyone else reading this, I note that if you do not earn too much, Maryland for 2020 will not tax you at all for your UI (source of quote below:(

Unemployment Compensation Tax Break

For the 2020 tax year, individuals who received unemployment income can subtract the benefits from Maryland taxable income. The subtraction is allowed for individuals whose federal adjusted gross income is $75,000 or less, or for married taxpayers and head of household whose federal adjusted gross income is $100,000 or less. This applies to Maryland unemployment benefits and states with which Maryland has a reciprocal tax agreement.