labor lawAdivision of labor law center

Most states impose a tax on individual income, and Maryland is no exception. Each person that earns a wage and/or lives in the state of Maryland, must pay state income taxes in addition to federal income taxes. But how much should come out of each person’s income for state income taxes? Good question – and there is a simple form to help determine this.

In addition to the federal income tax withholding form, W4, each employee needs to fill out an MW507 form for their Maryland State income tax withholding. This form has essentially the same information on it, but makes sure you have the proper withholding allowances for state-level withholdings. This form is available online here.

Also, to avoid double-taxation of income, the state of Maryland has Reciprocal Agreements in effect with D.C., Pennsylvania, Virginia, and West Virginia – meaning that if the individual lives in one state and works in another, income tax will only be withheld for the state of residence. The form MW507 is also used to establish the state of residence for any employee that wishes to alleviate themselves of the burden of double-taxation in these particular states.

And, please take note! If no income tax withholding form is filled out, taxes must be withheld at the highest level possible – single, no deduction allowances – even if the employee is known to be married. To prevent things like this from happening, I cannot stress enough the importance of having each employee file both their MW507 as well as a W4 form for federal income taxes, so please make their completion a priority.

Last 10 posts by Cara

• Massachusetts W-4 - September 24th, 2006
• Maine W-4 - September 24th, 2006
• Louisiana W-4 - September 24th, 2006
• Kentucky W-4 - September 24th, 2006
• Kansas W-4 - September 24th, 2006
• Iowa W-4 - September 24th, 2006
• Indiana W-4 - September 24th, 2006
• Illinois W-4 - September 24th, 2006
• Idaho W-4 - September 24th, 2006
• Federal W-4 Form - August 27th, 2006