Welcome to the site. I'm PDtax, and will be helping you today.
Maryland rules require that you withhold for Maryland taxes if the employee has either domicile (bank accounts, MD driver's license, etc.) in MD on the last day of the year or resides in MD. If neither applies, MD withholding is not applicable.
Second is reciprocity, and NC and MD do not have such an agreement.
Lastly is resident/nonresident tax policy. Your employee is domiciled in NC, but works in MD. You have to withhold using the special MD nonresident rate, which is the ordinary MD withholding plus 1.5% nonresident rate.
http://taxes.marylandtaxes.com/Business_Taxes/Business_Tax_Types/Income_Tax/Employer_Withholding/Withholding_Information/Nonresident_Income_Tax_Rate.shtml is the link to the web page for MD nonresident tax withholding. See the first paragraph for nonresident withholding.
and, a correction. My first paragraph, last sentence, was incorrect. "If neither applies, MD withholding is not applicable." should be ignored.
To summarize, the MD nonresident withholding rate applies, and the web page explains the rate. Your employee will then file in MD as a nonresident, and also in NC as a resident, with a resident tax credit to keep from being taxed twice on the same income. http://www.dornc.com/taxes/individual/another.html is the web page that explains.
Thanks for asking at Just Answer. I'm PDtax.