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Lev
Lev, Tax Advisor
Category: Tax
Satisfied Customers: 29516
Experience:  Taxes, Immigration, Labor Relations
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I have an employee who works in MD, but lives in DC, do we

Customer Question

I have an employee who works in MD, but lives in DC, do we have to charge them for MD local tax?
JA: The Accountant will know how to help. Please tell me more, so we can help you best.
Customer: I'm thinking since she's exempt from MD tax, that we do not have to do anything with MD locality
JA: Is there anything else the Accountant should be aware of?
Customer: not that I can think of
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Submitted: 11 months ago.
Category: Tax
Expert:  Lev replied 11 months ago.
In general - based on work location - you need to withhold MD taxes and report that income as from MD sources on form W2.
Expert:  Lev replied 11 months ago.
However - Maryland has written reciprocal agreements with Pennsylvania, Virginia, West Virginia and the District of Columbia.Correspondingly - nonresidents from these jurisdictions are exempt from taxation on the wages, salary and other compensation for personal services rendered in Maryland.Withholding is not required if the individual files an exemption certificate with the employer. An income tax return is not required by the nonresident if the individual's only income is from wages, salary and other compensation for personal services rendered in the nonresident jurisdiction.Here is the form to use to claim an exemption.http://forms.marylandtaxes.com/current_forms/mw507.pdfWith this exemption, no withholding is taken out of your paycheck for Maryland.That would be employee's responsibility to pay DC taxes..I appreciate if you take a moment to rate the answer.Experts are ONLY credited when answers are rated positively.If you still have any doubts, need clarification - please be sure to ask.I am here to help you with all tax related issues.