Maryland non-resident return

[Catherine]

Client gets sent to various employer sites on assignment and so has various non-resident state returns. Last year, he worked in Maryland and earned somewhat under 40K while there (out of about triple that, in total).

Anything I should watch out for in the MD NR return? Funny little "gotcha's" that out of state preparers miss? Corrections that need to be made that are phrased ambiguously on the forms? Anything about that special "nonresident tax" that I need to look into?

This is a state I have not prepared before and I know there are places in the MA forms that confuse "furriners" so I'm sure there must be something similar for MD.

Any advice gladly accepted and appreciated.

Catherine

[Pacun]

The first question that comes to my mind is to ask you where he lives. If the person lives in a state with a reciprocal agreement between MD and his state, he needs to file and get full refund. I know MD has agreements with VA, DC, PA, etc.

[jklcpa]

I agree with Pacun. The form starts with federal income and divides in between MD income and non-MD income. The next 2 sections on page 1 of the nonresident form are additions and subtractions that have some oddball items. Check out the instructions for lines 18, 19, 22 and 23 of the MD Form 505. State income taxes are subtracted out of federal itemized deductions before applying the income % to arrive at the MD itemized. MD does not require that the person use the itemized just because itemized was used for federal purposes, so you should figure the tax using the standard deduction and pick whichever is better.

[Catherine]

Thank you both!