Employer Withholding

The withholding of Maryland income tax is a part of the state's "pay-as-you-go" plan of income tax collection adopted by the 1955 session of the Maryland General Assembly. The provisions are set forth in the Tax-General Article of the Annotated Code of Maryland. The law aids in the proper collection of taxes required to be reported by individuals with taxable income. Generally speaking, the state's system resembles the federal withholding plans.

Withholding tax is not an additional tax, but merely a collection device. Its purpose is to collect tax at the source, as the wages are earned, instead of collecting the tax a year after the wages were earned. Please see the Maryland Withholding Guide and the links at the bottom of the page for more information.

As an employer, you must record sums that are withheld from employee wages in a ledger account to clearly indicate the amount of state tax withheld. These funds must be submitted to the state on the due date assigned to you.

You may use our withholding tables to determine the correct amount of state and local income tax that must be withheld from employee wages. To determine a precise amount to be withheld, use our percentage method tables.

The total income tax required to be withheld on wages for the purposes of the withholding tables and schedules is calculated without regard to the marginal state income tax rates of less than 4.75%.

The wages earned by a spouse of a nonresident U.S. servicemember may be exempt from Maryland income tax under the Military Spouses Residency Relief Act, when the spouse of the servicemember is not a legal resident of Maryland. The income tax withholding exemption may be claimed by filing a revised Form MW507 with their employer. For more information, see Employer Withholding Tax Alert- Important Information for Spouses of U.S. Military Servicemembers

If the payor of an eligible rollover distribution made to a Maryland resident is required to have federal income tax withheld from that distribution, then Maryland income tax must be withheld from the distribution at a rate of 7.75 percent.

The withholding specifically applies to an eligible rollover distribution within the meaning of §3405(c) of the Internal Revenue Code, subject to mandatory withholding of federal income tax and received by a domiciliary or statutory resident of Maryland.

The 7.75 percent tax must be paid to the Comptroller of Maryland with Form MW506 (Employer's Return of Income Tax Withheld). If the payor of the distribution is not currently registered with the Comptroller and has not established a withholding account, the payor can register online. Payment may also be made online for free through our bFile service.

For more information, see Administrative Release 41 - Withholding on Designated Distributions from Retirement Plans

House Bill 632 (Chapter 352, Acts of 2011), the Earned Income Credit Information Act, requires the Comptroller to publish the maximum eligibility for the State earned income tax credit (EITC) on or before January 1 of each calendar year. This Act also requires the Comptroller to notify all employers in Maryland by mail of the information on the State EITC. The employer then must notify each employee who may be eligible for the federal or State earned income tax credits electronically or in written form by December 31. The Act took effect on January 1, 2012. You may view and download the Tax Alert for this new requirement. You may also read the IRS notice.

Certain employees may be entitled to claim an earned income tax credit on their 2018 federal and Maryland income tax returns if both their federal adjusted gross income and their earned income is less than the following:

  • $50,162 ($55,952 married filing jointly) with three or more qualifying children
  • $46,703 ($52,493 married filing jointly) with two qualifying children
  • $41,094 ($46,884 married filing jointly) with one qualifying child
  • $15,570 ($21,370 married filing jointly) with no qualifying children

The notice to employees must include the following statements: (1) the employee may be eligible for the federal and State earned income tax credits; and (2) the employee may be eligible for the State earned income tax credit. We have created a sample employee notice for you to use, however, you may create your own as long as it includes the two statements above.

Persons and business entities who enter into contracts to improve real property with nonresident general contractors for $500,000 or more, or with nonresident subcontractors for $50,000 or more under contracts where the improvements are $500,000 or more, must withhold 3 percent of the total contract price upon completion of the contract pending receipt of a Tax Clearance Certificate from the Comptroller.

A nonresident contractor is a contractor that does not maintain a "regular place of business" in Maryland. A "regular place of business" includes having a bona fide office, factory, warehouse or any other space in Maryland at which a person is regularly doing business in its own name and is continuously maintained, occupied and used by the person or the person's regular employees to carry on the business. Sales and use tax and withholding tax including any penalty and interest associated with those taxes are subject to 3 percent withholding.

Any person who directly contracts with a nonresident contractor for the improvement of real property where the total value of the improvement equals or exceeds $500,000 must withhold 3 percent of the total contract price. Any general contractor who has contracted for the improvement of real property where the total value of improvement equals or exceeds $500,000 and does business with a nonresident subcontractor under a contract that equals or exceeds $50,000 must withhold 3 percent of that total contract price.

All contracts for the improvement of real property of any kind, except for contracts with an owner of property that contracts for the construction of a new home, including a condominium or cooperative unit, or an improvement of a home or condominium or cooperative unit that the owner intends to occupy within a reasonable period of time are subject to the requirement.

Requesting a tax clearance certificate

A Tax Clearance Certificate authorizes the person withholding 3 percent of the contract price from the nonresident contractor to release that money to the contractor. The Tax Clearance Certificate is furnished by the Comptroller to the nonresident contractor and to the person required to withhold the required 3 percent of the contract price. The nonresident contractor can make a written request for a Tax Clearance Certificate only after the contract has been completed. The contract is considered completed when the performance requirements of the contract have been met by the nonresident contractor or when full payment (less the 3 percent withholding) is made to the nonresident contractor by the person that contracted with the nonresident contractor, whichever occurs first.

The request for a Tax Clearance Certificate must contain the following:

  • Type of project.
  • Site address.
  • Nonresident contractor's name and address.
  • Date the contract was completed.
  • Certification that all records pertaining to the contract are available in Maryland for review.
  • Location of the records if not submitted with the request
  • Name and address of the person required to withhold 3 percent of the contract price.
  • Total contract price.

The following records must also be submitted with the request:

  • Purchase invoices and related journals and ledgers.
  • Payroll records of individual employees (including payroll journals) and copies of filed Maryland employer's withholding.
  • Copies of filed use tax returns.

If the records cannot be submitted, provide the Maryland address and telephone number of the location where original records are available. If the records are voluminous, please contact us for an alternative examination method. Send the request and any appropriate records to:

Comptroller of Maryland
Compliance Division, Room 407
301 West Preston Street
Baltimore, MD 21201-2383

The request can also be faxed to 410-333-7749 or e-mailed to nrc@marylandtaxes.gov.

See sample request for Tax Clearance Certificate.

If no taxes are due - tax clearance certificate

If within 30 days after receipt of a written request for a Tax Clearance Certificate, the Comptroller determines that no sales or use tax and withholding tax are due from the nonresident contractor, the Comptroller shall furnish to the nonresident contractor and to the person required to withhold the 3 percent of the contract price, a Tax Clearance Certificate. After receiving the Tax Clearance Certificate, the person withholding the 3 percent may pay the nonresident contractor the amount withheld free from any claims by the Comptroller.

If taxes are due - certificate of tax due

If within 30 days after receipt of a written request for a Tax Clearance Certificate the Comptroller determines that the nonresident contractor has a sales and use tax or withholding tax liability due to the state, the Comptroller will issue a Certificate of Tax Due to both the person required to withhold 3 percent of the contract price and the nonresident contractor. The Certificate of Tax Due will include the amount of sales and use tax, withholding, or both, due from the nonresident contractor, plus penalty and interest.

The person required to withhold from the nonresident contractor:

  • Shall pay to the Comptroller the amount due up to 3 percent of the contract price.
  • Shall include with the payment a statement identifying the name of the person required to withhold, the type of project, the site address, the nonresident contractor's name and the date the contract was completed.
  • May pay to the nonresident contractor the excess of the amount withheld over the stated amount due on the certificate.

If additional taxes are due

If the Comptroller's Office determines the taxpayer has an additional liability after a certificate has been issued, the Comptroller may issue an assessment against the nonresident contractor for additional tax, penalties and interest due and take appropriate legal action to effect collection.

If no certificate is issued

If, however, the Comptroller fails to issue either a Certificate of Tax Due or a Tax Clearance Certificate, the person required to withhold 3 percent of the contract price may pay the nonresident contractor the amount withheld. However, receipt of the 3 percent withholding does not relieve the nonresident contractor from any sales and use tax or withholding tax liability which may be determined to be due at a later date.

Appeals

The nonresident contractor will be issued an assessment and may appeal the Notice of Assessment from the Comptroller of Maryland to the Hearings and Appeals Section of the Compliance Division. An appeal of an assessment by the nonresident contractor does not affect the remittance due by the person required to withhold and pay over 3 percent of the contract price to the Comptroller's Office.

Failure to request certificate and/or withhold

The person withholding 3 percent of the contract price is required to remit that amount to the Comptroller's Office if the nonresident contractor fails to make a written request for a Tax Clearance Certificate, or fails to meet all the filing requirements within 30 days after completion of the contract. Persons who fail to withhold and/or pay over the 3 percent are liable for the amounts due. The liability extends to any sales and use tax, withholding tax, or both up to 3 percent of the contract amount, including penalties and interest relating to these taxes. The Comptroller shall take appropriate legal action to recover amounts required to be withheld and/or paid over.

Contracts and amendments

For contracts entered into on or after July 1, 2003, if amendments to the total contract price bring the contract price to $500,000 or more, the 3 percent withholding is then required for the entire contract price, including any subcontracts of $50,000 or more not yet completed. Subcontracts for $50,000 or more completed prior to meeting the $500,000 threshold are exempt from the 3 percent withholding requirement.

Amendments, additions and/or separate contracts related to or associated with real property improvement are subject to the 3 percent withholding if the total value of the contract including amendments, additions and/or separate contracts for the same period equals or exceeds $500,000 for a general contractor and equals or exceeds $50,000 for a subcontractor. In contrast, contracts entered into before July 1, 2003, are not subject to the 3 percent withholding requirement. An amendment executed July 1, 2003, or later for which the total value of the amendment is at least $500,000, and the work to be performed under the amendment does not fall within the scope of the original contract is subject to the withholding requirement as well as any subcontract which equals or exceeds $50,000.

Questions

For more information, please call 410-767-1942 or toll free 1-800-648-9638.

Taxable wages include all employee compensation, such as salaries, fees, bonuses, commissions, vacation allowances, back pay, and retroactive wage increases.

Wages paid in any form other than money are measured by their fair market value. These include lodging, meals, property, or other considerations for personal services.

Withholding is not required for:

  • Domestic service in a private home.
  • Services performed by a duly ordained, commissioned or licensed minister of a church or religious order in the exercise of duties.
  • Nonresidents (if their income consists entirely of wages or other compensation for personal services performed in Maryland, and their state of residence has a reciprocal agreement with Maryland. All other nonresidents are subject to withholding.)

Military spouses

The wages earned by a spouse of a nonresident U.S. service member may be exempt from Maryland income tax under the Military Spouses Residency Relief Act, when the spouse of the service member is not a legal resident of Maryland. The income tax withholding exemption may be claimed by filing a revised Form MW507 and Form MW507M with their employer. For more information, see Employer Withholding Tax Alert - Important Information for Spouses of U.S. Military Servicemembers issued November 23, 2009.

Lottery and other gambling winnings in excess of $5,000 are subject to withholding at a rate of 8.95% for Maryland residents or 8% for nonresidents. Pari-mutuel (horse racing) winnings in excess of $5,000 and at least 300 times as large as the original wager are subject to the same withholding rates.

If you have an employee who expects to have less than $12,000 in income during 2018, you are not required to withhold Maryland state and local income tax. Students and other part-time workers affected by this situation may claim an exemption from withholding, using Maryland Form MW507, Employee's Maryland Withholding Exemption Certificate. You should keep the completed MW507 certificate with your records.

Many high school and college counselors have partially completed MW507 forms that eligible employees can use to claim the withholding exemption with their employer.

You are responsible for sending a copy of an MW507 certificate to the Compliance Division under the following circumstances:

  • You have any reason to believe the certificate is incorrect.
  • The employee claims more than 10 exemptions.
  • The employee claims "exempt" as a result of having no tax liability for the preceding tax year, expects to incur no liability this year, and the wages are expected to exceed $200 a week (a new exemption certificate must be re-filed each year by the 15th day of February for employees whose income tax liability is determined on a calendar basis or by the 15th day of the second month following the last day of the employee's tax year).
  • The employee claims exemptions from withholding on the basis of residence in a reciprocal state.

Mail completed forms to:

Comptroller of Maryland
Compliance Division, Compliance Programs Section
301 W. Preston Street
Baltimore, Maryland 21201

Nonresidents who work in Maryland or derive income from a Maryland source are subject to the appropriate Maryland income tax rate for their income level, as well as a special nonresident tax rate. The special nonresident tax rate has increased from 1.25% to 1.75% in 2016.

By law, the nonresident tax rate must equal the lowest local income tax rate paid by Maryland residents (currently 1.75%) combined with the top state tax rate.

Employers must withhold Maryland income tax for nonresidents using the 1.75% rate. See Withholding Tables for regular and percentage method withholding amounts.

Washington, D.C., Pennsylvania and Virginia residents

Residents of the District of Columbia, Pennsylvania and Virginia who did not maintain a place of abode in Maryland for more than six months (183 days or more), are exempt from withholding of Maryland tax on Maryland wages and salary by the authority of a reciprocity agreement between Maryland and these jurisdictions.

West Virginia residents

Wage and salary income for residents of West Virginia is not taxable to Maryland, regardless of the amount of time spent in Maryland, and they are exempt from withholding of Maryland tax on Maryland wages and salary by the authority of a reciprocity agreement between Maryland and West Virginia.

Local tax for certain nonresidents

The local income tax is imposed on nonresidents employed in Maryland, who reside in local jurisdictions that impose a local income or earnings tax on Maryland residents.

During 2012, the following states had local jurisdictions which impose local earnings taxes on Maryland residents: Alabama, Delaware, Indiana, Iowa, Kentucky, Michigan, Missouri, New York, and Ohio.

Both state and local income tax withholding is required on wages of residents of local jurisdictions in the states above which impose an income or earnings tax of Maryland residents, if they work in Maryland. Since Maryland shares a state tax reciprocity agreement with Pennsylvania, only the local tax should be withheld for Pennsylvania residents working in Maryland and living in a jurisdiction that taxes Maryland residents. The local tax is computed at the rate of the local Maryland jurisdiction where the taxpayer is employed.

Nonresident tax on sale of Maryland property

A nonresident tax on the sale of Maryland property is withheld at the rate of 8% (2.25% plus the top state tax rate of 5.75%) for individuals and 8.25% on nonresident entities. For more information, see Withholding Requirements for Sales of Real Property by Nonresidents.

Nonresident pass-through entity tax rate

The tax rate for pass-through entities is 7.5% on nonresident individual members (including nonresident fiduciary members) and 8.25% on nonresident entity members. For more information, see Pass-Through Entities.

You are not required by law to withhold Maryland income taxes from the wages paid to a domestic employee in a private residence. However, you may do so as a courtesy to the employee.

If you wish, you can register your withholding account online and use bFile to file your withholding returns electronically for free.

You can also refer to our Employer Withholding Guide or Withholding Tables to determine the correct amount of state and local income tax that must be withheld from employee wages. The total income tax required to be withheld on wages for the purposes of the withholding tables is calculated without regard to the marginal state income tax rates of less than 4.75 percent. The local income tax, which is calculated as a percentage of taxable income, is included in the amount shown in the withholding tables.

If taxes are not withheld, then the employee will need to make estimated tax payments.

If you are a nonresident who owns and is selling or transferring real property and associated tangible personal property in Maryland, you must make a tax withholding payment to the local Clerk of the Circuit Court or the State Department of Assessments and Taxation (SDAT). The payment must be made before the deed or other instrument of transfer is recorded with the court clerk or filed with SDAT.

Generally, the person responsible for your closing, a title company for example, is responsible for ensuring that sufficient funds are withheld at settlement and for paying the amount of withholding tax due to the Clerk or SDAT when the deed or other instrument of transfer is presented for recordation.

In the case of a nonresident individual, the payment is 8% of the total property sale payment made to the individual. A nonresident entity must make an 8.25% payment. See Withholding Requirements for Sales of Real Property by Nonresidents.

Under this provision, a nonresident entity is an entity that is:

  • not formed under the laws of Maryland more than 90 days before the date of the sale of the property, and
  • not qualified by or registered with SDAT to do business in Maryland more than 90 days before the date of the sale of the property.

In the case of multiple owners, withholding is required from each of the nonresident owners based on the percentage of the total payment that represents each nonresident's ownership percentage.

At settlement, you must complete Form MW506NRS - Return of Income Tax Withholding for Nonresident Sale of Real Property. The settlement agent must then present Copies A and B of Form MW506NRS to the clerk or SDAT, along with payment.

In addition to filing Form MW506NRS with a tax withholding payment, you are still required to file an end-of-the-year income tax return with Maryland for the year in which the sale occurred.

Find Account Numbers

Your Federal Employer Identification Number is the nine-digit number located in the upper left part of your withholding return, under the label "FEIN."

Your Maryland Central Registration number is the eight-digit number located to the right of your FEIN, under the label "REGISTRATION NBR."

Closing a Withholding Account
You can close your withholding account by calling 410-260-7980 from Central Maryland, or 1-800-638-2937 from elsewhere, Monday - Friday, 8:30 a.m. - 4:30 p.m.

Please be ready to provide the following information:

  • Name
  • Telephone Number
  • Account number
  • Reason for closing the account (out of business, no employees, etc.)
  • Closing date

You can also close your account by completing and remitting the Final Report Form available in your withholding coupon booklet, or by completing Form MW506FR.

Existing accounts

You have two options to file your employer withholding reports: you can file electronically, or you can file using pre-printed coupons in a coupon book that we send to you, which contains your Employer's Return of Income Tax Withheld (Form MW506). If you use the preprinted MW506 coupons to file, please return your reports in the window envelope that we send to you. Be sure that our mailing address is showing through the window.

You must file your withholding reports according to the schedule dictated for your business by our filing categories. If you have a new account, you must file quarterly reports. Your account will be reviewed at the end of the year to determine if your filing requirement needs to be changed.

If circumstances prevent you from using the coupon book and you choose not to file electronically, you may file your return by letter. Please include the following information in the letter:

  • Maryland Central Registration Number (CRN).
  • Federal Employer Identification Number (FEIN).
  • Business name, address and telephone number.
  • Amount of income tax withheld.
  • Dates covered by the return.

No tax due

If you do not owe tax, you are still required to file a return. In this case, you can file a zero report using our telefile service at 410-260-7225.

For additional information, see the links below.

The due dates for income tax withholding reports vary for employers filing monthly, quarterly, accelerated and annual reports. If the due date falls on a Saturday, Sunday or state holiday, the report is due on the next business day.

Monthly reports

Monthly income tax withholding reports are due on the 15th day of the month following the month in which the income tax was withheld.

If you are required to file monthly withholding reports you must continue to file reports until you give written notice to the Comptroller of Maryland indicating that you no longer have employees or are no longer liable to file the return.

Quarterly reports

Quarterly income tax withholding returns are due on the 15th day of the month that follows a calendar quarter in which income tax was withheld.

If you are required to file quarterly, you must continue to file reports until you give written notice to the Comptroller of Maryland indicating that you no longer have employees or are no longer liable to file the return.

Accelerated reports

Employers filing accelerated withholding reports must file within three business days following the payroll (pay date).

The accelerated filing category applies to employers who withheld $15,000 or more for the preceding calendar year and currently have accumulated in any pay period $700 or more in withholding tax.

Annual reports

Employers filing annual reports must file on or before January 31 in the year that follows the year in which the income tax was withheld.

No tax due

If you do not owe tax, you are still required to file a return. In this case, you can file a zero report electronically by using our bFile service, or over the telephone by calling 410-260-7225.

Period Due Date
January
February
March
February 15
March 15
April 15
 1st Quarter  April 15
April
May
June
May 15
June 15
July 15
 2nd Quarter  July 15
July
August
September
August 15
September 15
October 15
 3rd Quarter  October 15
October
November
December
November 15
December15
January 15
 4th Quarter  January 15

Generally, all new accounts are placed on a quarterly filing frequency. However, when completing our Central Registration Application electronically, you can choose a quarterly or monthly filing frequency. All accounts are reviewed once a year to determine if a filing category needs to be changed.

Businesses must file withholding reports according to the following categories:

  • Accelerated: Employers who were required to withhold $15,000 or more for the preceding calendar year and also have accumulated $700 of withholding tax, in any pay period.
  • Quarterly: Employers with less than $700 of withholding per quarter.
  • Monthly: Employers with more than $700 of withholding in any one quarter.
  • Seasonally: Employers who operate only during certain months. Employers must obtain prior approval to file seasonally.
  • Annually: Employers with less than $250 withholding per calendar year are required to remit the tax withheld on an annual basis.

Withholding Tables

You may use the Regular Method Withholding Tables to determine the correct amount of state and local income tax that must be withheld from employee wages. To determine a precise amount to be withheld, use the Percentage Method tables.

The total income tax required to be withheld on wages for the purposes of the withholding tables and schedules is calculated without regard to the marginal state income tax rates of less than 4.75 percent.

Employer Withholding Forms

Businesses needing to pay employer withholding of Maryland income tax may do so in several ways as follows:

  • Pay electronically using Direct Debit or Electronic Funds Transfer
  • Pay by credit card


    All companies collect a non-refundable, convenience fee for processing the credit card payment; this fee does not go to the state of Maryland.

    Do not include the amount of the convenience fee as part of the tax payment.

    ONLINE PAYMENTS
    Vendor Name Convenience Fee Tax Types Supported Credit Cards Accepted
    NICUSA, Inc. 2.49% All Visa, MasterCard, Discover, American Express
    PAYMENTS BY TELEPHONE - TOLL FREE 1-800-2PAY-TAX (1-800-272-9829)
    Vendor Name Convenience Fee Tax Types Supported Credit Cards Accepted
    Official Payments 2.49% All Visa, MasterCard, Discover, American Express
    You may also be asked to provide the following information:
    • 13-digit notice number from your tax bill
    • Social Security number or Federal EIC
    • Address with Zip Code
    • Email Address
    • Phone number
    • If you are calling Official Payments to pay by credit card, please use Jurisdiction Code 3000
    After your payment is authorized, you will be given a confirmation number that you should keep for your records.


  • Pay by check or money order: Make your payment payable to Comptroller of Maryland. Be sure to include your Maryland Central Registration number or Federal Employer Identification Number (FEIN) on the check or money order. Do not send cash by mail. Use the envelopes included with your preprinted payment vouchers (Form MW506) to submit your reports and payments.

Other correspondence

All other correspondence related to employer withholding of Maryland income tax should be sent to:

Comptroller of Maryland
Remittance Processing Center
Annapolis, Maryland 21411-0002

Employers are required to furnish a completed wage and tax statement (Form W-2 or 1099) to each employee by the last day of January each year. If the due date falls on a Saturday, Sunday or a legal holiday, the statements must be filed by the next business day.

Employers are also required to submit a year-end reconciliation to the Comptroller of Maryland by the due date January 31st of each year, showing the prior year's wage and withholding information. If the due date falls on a Saturday, Sunday or legal holiday, the statements must be filed by the next business day..

Maryland law does not allow filing extensions for year-end reconciliations.

Magnetic Media Reconciliations FAQs

Media Specifications


Employers must submit their required annual withholding statements in machine readable or electronic format if the total number of required statements equals or exceeds 25. The electronic format is also required if a lower threshold applies for federal income tax purposes.

We urge all employers to file electronically since it saves time and processing costs. However, filing electronically with the U.S. Social Security Administration does not satisfy your Maryland filing obligation. You must submit a separate filing to the Comptroller of Maryland in compliance with Maryland's filing requirements, on diskette, CD or online through our bFile service.

Year End Reconciliation Booklet and Forms

Common Errors to Avoid

Avoid making the following errors when filing your magnetic media:

  • Failure to include RA record results in improper reading of file.
  • Failure to modify RS Record to include the Federal Employer Identification Number (FEIN) positions 328-336.
  • Failure to include the RV containing the MW508 information.
  • Failure to provide the 6 digit North American Industry Classification System (NAICS) in positions 333-337 of RV record. The NAICS is the standard used by federal statistical agencies in classifying business establishments for the purpose of collecting, analyzing, and publishing statistical data related to the U.S. business economy. If you do not know your NAICS code, please contact the census bureau or reference www.census.gov
  • Using the FEIN instead of the Maryland Central Registration number.
  • Using an incorrect format for the FEIN - nine positions, all numeric and no hyphen.
  • Omitting the FEIN, or using an invalid FEIN.
  • Incorrect record length. Record lengths must be 512 for W-2s and 750 for 1099s.
  • Failure to modify B Record to include the Maryland Central Registration Number (CR) positions 715-722 for 1099s.

Filing Requirements for W-2 Wage Data


Employers must submit their required annual withholding statements in machine readable or electronic format if the total number of required statements equals or exceeds 25. The electronic format is also required if a lower threshold applies for federal income tax purposes.

We urge all employers to file electronically since it saves time and processing costs. However, filing electronically with the U.S. Social Security Administration does not satisfy your Maryland filing obligation. You must submit a separate filing to the Comptroller of Maryland in compliance with Maryland's filing requirements, on diskette, CD or online through our bFile service. For detailed information, the following publications are available here:

Employers who fail to comply may incur a penalty of $100 for each violation. Each W-2 submitted that is not properly filed is a separate violation subject to the $100 penalty. Failure to comply with Section 13-706 of the Tax General Article, Annotated code of Maryland, may result in the assessment of additional penalties.

The required records are:
      RA-Submitter Record (Same as SSA)
      RE-Employer Record (Modified)
      RS-State Record (Modified)
      RV- Total Record (Modified)

The specification document link above will provide details related to this electronic W-2 file.

Filing Requirements for 1099 Reporting


Filers having 25 or more information returns must file magnetic media in the IRS format detailed in IRS Publication 1220.


Specifications for Filing Forms 1098, 1099, 5498 and W-2G

Employers must submit their required annual withholding statements in machine readable or electronic format if the total number of required statements equals or exceeds 25 for the current tax year. The electronic format is also required if a lower threshold applies for federal income tax purposes.

Filers must file magnetic media in the IRS format cited IRS Publication 1220 for filing forms 1098, 1099, 5498 and W-2G.

Maryland requires a 1099G, 1099R, 1099S and W-2G for every Maryland payee who receives a payment of $10 or more during the tax year being reported.

Filers participating in the Combined Fed/State filing program should remember to include the Central registration Number in positions 715-722 of the modified "B" record.

Do not include more than one "IRSTAX" file per diskette or CD.

The required records are:
      T Transmitter Record (Same as IRS)
      A Payer Record (Same as IRS)
      B Payee Record (Modified, record description below)
      C End of Payer Record (Same as IRS)
      K Use for combined federal/state filing program (Same as IRS)
      F End of File Record (Same as IRS)

Failure to comply with the 1099 data reporting rules may result in a penalty of $100 for each violation, along with a $100 penalty or each 1099 that is not properly filed. Additional penalties may be assessed for failing to comply with Section 13-706 of the Tax-General Article, Annotated Code of Maryland.

Mailing Instructions

Paper Filers

Employers who have fewer than 25 W-2 wage and tax statements and/or 1099 forms to report may send a completed Form MW508 with the W-2 wage and tax statements and/or 1099 forms to:
      Revenue Administration Division
      ATTN: Magnetic Media Processing, Room 214
      110 Carroll Street
      Annapolis, MD 21411-0001

Magnetic Media Filers

Employers with 25 or more W-2 wage and tax statements and/or 1099 forms, or are otherwise required by the U.S. Social Security Administration to file electronically, are required to use magnetic media (with the EFW2 electronic format) or file electronically using our online b-File applications (Withholding Reconciliation or Bulk Upload). We encourage all employers, regardless of size, to use magnetic or electronic methods when possible.
      Revenue Administration Division
      ATTN: Magnetic Media Processing, Room 214
      110 Carroll Street
      Annapolis, MD 21411-0001

Extensions Unavailable

Employers must file their wage and tax statements and/or 1099 forms by the filing deadline. Maryland law does not provide for filing extensions for year-end reconciliations.

Failure to comply with the W-2 and 1099 data reporting rules may result in a penalty of $100 for each violation, along with a $100 penalty for each annual W-2 or 1099 report that is not properly filed. Additional penalties may be assessed for failing to comply with Section 13-706 of the Tax-General Article, Annotated Code of Maryland.

Reminders for the Current Tax Year

Magnetic Media Record Changes

There have been no changes to the MW508 EFW2 record layouts for TY2020. Please see the 2020 Maryland Employer Reporting of W-2s Instructions and Specifications Booklet for complete information. MW508 returns and W2s are due on January 31st of each year. If the due date falls on a Saturday, Sunday or a legal holiday, the statements must be filed by the next business day.

The 2020 Maryland record layout is the only acceptable format for both current and back year tax magnetic media submissions. PDFs on media are not acceptable.

Electronic submissions should be reviewed for accuracy using the Bulk Upload Testing Application. Rejected submissions will render error codes which will be listed in the 2018 Maryland Employer Reporting of W-2s Instructions and Specifications Booklet.

2020 Maryland Employer Reporting of W-2s Instructions and Specifications Booklet - RS and RV record reminders and 2020 Maryland Employer Instructions and Specifications for Reporting 1099s

The RS (W-2) record must include the Employer Identification Number in positions 328-336 and the Maryland Central Registration Number in positions 338-345. Failure to include your Employer Identification Number and Maryland Central Registration Number will result in your data being rejected

If you are expecting an overpayment, it must be reported in the 'RV' record. Please indicate as to whether you are a requesting a refund or want to apply it as a credit. Refunds will be approved based on the request in the 'RV' record.

Failure to include a date and time stamp in positions 497-512 of the 'RE', 'RS' and 'RV' records will result in the entire file being rejected.

The RV record is an electronic version of the paper form, MW508, Annual Employer Reconciliation Return. The RV record contains all of the information from the MW508 and is a required record in the electronic file. Do not include the paper MW508 with your magnetic media submission as the RV record is considered the electronic version. Do not send in a paper Form MW508 unless the report is for all zeros and/or paper W-2s/1099s are attached. Amounts reported on a paper Form MW508 are for paper submission only.

Outsourced Payrolls

If you outsource your payroll, please provide the transmitter/submitter with the Federal Employer Identification Number (FEIN) and the Maryland Central Registration (CR) Number. You can find the account numbers in your pre-printed employer withholding tax returns coupon book and on the Form MW508.

Avoid duplicate filing

Do not report duplicate information. If you file returns magnetically, do not file identical paper documents. This may result in erroneous balance due notices and/or penalty notices.

CDs and Diskettes

The Comptroller of Maryland will only accept 3½-inch diskettes, CDs and online filings through b-File.

1099s and W2-G

For tax year 2020 and going forward, the IRS has removed reporting for nonemployee compensation from Form 1099-MISC, box 7 to Form 1099-NEC. The State of Maryland will follow federal guidelines. Please reference the 2020 Maryland Employer Reporting of 1099s Instruction and Specifications and IRS Publication 1220 for detailed information.

Combined Federal/State Filing Program

The Comptroller of Maryland is a participant in the IRS Combined Federal/State Filing Program. See the IRS format from Publication 1220

If you are participating in the Combined Federal/State filing program, separate reporting is not necessary. The IRS will forward the 1099 information to us. Keep in mind that separate reporting may result in erroneous balance due notices and/or penalty notices.

Current and prior year data may be submitted in the same shipment; however, each tax year must be on separate media.

For assistance with Maryland employer withholding, 410-260-7980 in Central Maryland or 1-800-638-2937 from elsewhere, Monday - Friday, 8:30 a.m. - 4:30 p.m. You can also e-mail your withholding questions to us at taxhelp@marylandtaxes.gov

Magnetic Media

For assistance with magnetic media reporting, call 410-260-7150 from Central Maryland, Monday - Friday, 8:00 a.m. - 5:00 p.m.

E-mail questions concerning magnetic media to efil@marylandtaxes.gov

Unemployment Insurance

For information about with unemployment insurance, visit the Maryland Division of Unemployment Insurance Web site.

Withholding Online Services



Employer Withholding Tax Alerts En Español

  • Employer Withholding Tax Alert - Emitido en Octubre del 2020. Los empleadores están requeridos de notificar acerca del Crédito por el Ingreso Trabajado.
  • Employer Withholding Tax Alert - Emitido en Octubre del 2019. Los empleadores están requeridos de notificar acerca del Crédito por el Ingreso Trabajado.
  • Employer Withholding Tax Alert - Emitido en Octubre del 2018. Los empleadores están requeridos de notificar acerca del Crédito por el Ingreso Trabajado.
  • Employer Withholding Tax Alert - Emitido en Octubre del 2017. Los empleadores están requeridos de notificar acerca del Crédito por el Ingreso Trabajado.
  • Employer Withholding Tax Alert - Emitido en Octubre del 2014. Los empleadores están requeridos de notificar acerca del Crédito por el Ingreso Trabajado.