MD State Filing - Interest Charges

Forum|Forum|4 years ago
April 8, 2022
7 replies
54 views

This is my first year living in MD while working in DC. Given the reciprocity agreement between the two states, DC is refunding me taxes withheld throughout the year while I am paying taxes to MD during tax filing. The issue is MD is charging me interest charges for the taxes not paid throughout the year (or withheld via DC). Is MD appropriately charging me interest in this situation or would there be a form I can file to avoid interest charges for my current filing or in the future?

dmertz

Level 15

Since you had no Maryland tax liability for 2020, there was no required quarterly payment. When preparing your 2021 Maryland tax return in 2021 TurboTax, make sure to indicate that your 2020 Maryland tax liability was zero. With no 2020 Maryland tax liability, no Form 502UP should be present in your 2021 Maryland tax return.

ryankhkimAuthor

Level 3

@dmertz

Thank you for your answer. No where in my MD state filing I have indicated MD tax liability for 2020. Any idea how I can explicitly record the nonexistence in my filing or prevent Form 502UP from being automatically populated?

ryankhkimAuthor

Level 3

Hi, even after going through the instructions for 502UP, I am unclear as to whether I really need to pay interest charges or not in my current situation. If anyone could help, that would be much appreciated.