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Income Taxes Paid to Other States Credit

If you are a Maryland resident (including a resident fiduciary) and you paid income tax to another state, you may be eligible for a credit on your Maryland return. Nonresidents (filing Form 505, 515 or 504) are not eligible for this credit.

Find the state to which you paid a nonresident tax in the groups listed below. The instructions for that group will tell you if you are eligible for credit and should complete Part A of Form 502CR.

You must file your Maryland income tax return on:

  • Form 502 and complete lines 1 through 22 of that form; or
  • Form 504 and complete lines 1 through 23.

Then complete Form 502CR Parts A and G and attach to Form 502 or 504. A completed, signed copy of the income tax return filed in the other state must also be attached to Form 502 or 504.

Group I - Maryland Residents

A Maryland resident (including a resident fiduciary) having income from one of these states must report the income on the Maryland return Form 502 or 504. To claim a credit for taxes paid to another state, complete Form 502CR and attach it and a copy of the other state's nonresident income tax return to your Maryland return.

Alabama - AL Massachusetts - MA Pennsylvania - PA (except wage income)
Arizona - AZ Michigan - MI Rhode Island - RI
Arkansas - AR Minnesota - MN South Carolina - SC
California - CA Mississippi - MS Tennessee - TN
Colorado - CO Missouri - MO Texas - TX
Connecticut - CT Montana - MT Utah - UT
Delaware - DE Nebraska - NE Vermont - VT
Georgia - GA New Hampshire - NH Virginia - VA (except wage income)
Hawaii - HI New Jersey - NJ Washington, DC - DC (except wage income)
Idaho - ID New Mexico - NM West Virginia- WV (except wage income)
Illinois - IL New York - NY Wisconsin - WI
Indiana - IN North Carolina -NC Territories and Possessions of the United States
Iowa - IA North Dakota - ND American Samoa - AS
Kansas - KS Ohio - OH Guam - GU
Kentucky - KY Oklahoma - OK Northern Mariana Island - MP
Louisiana - LA Oregon - OR Puerto Rico - PR
Maine - ME   U.S. Virgin Islands - VI
Group II - Reciprocal States

Maryland has a reciprocal agreement with the following states:

  • Pennsylvania - PA
  • Virginia - VA
  • Washington, DC - DC
  • West Virginia - WV
Group III - No state income tax

No state income tax - No credit allowed.

  • Alaska - AK
  • Florida - FL
  • Nevada - NV
  • South Dakota - SD
  • Washington - WA
  • Wyoming - WY
Dual Residents

A person may be a resident of more than one state at the same time for income tax purposes. If you must file a resident return with both Maryland and another state, use the following rules to determine where the credit should be taken: 

  1. A person who is domiciled in Maryland and who is subject to tax as a resident of any of the states listed in Group I or II can claim a credit on the Maryland return (Form 502) using Part A of Form 502CR.
  2. A person domiciled in any state listed in Group I or II who must file a resident return with Maryland must take the credit in the state of domicile.
Capital gains installment sales

You may be allowed a credit for tax paid to another state when a capital gain is recognized in the current year on the federal return, but was taxed by another state in an earlier year. The gain must have resulted from the sale of a personal residence located in another state or from an installment sale. The credit equals the amount of the gain multiplied by the highest state tax rate used on your Maryland tax return or the personal income tax rate in the other state in the year in which the state taxes the gain, whichever is less.

If the credit exceeds your tax liability, the unused credit may not be carried forward to any other tax year.



 
Links for Tax Credits and Deductions
General Information
Tax Credits and Deductions
  College Savings Plans Deductions
  Poverty Level Credit
  Preservation and Conservation Easement Credit
  Income Taxes Paid to Other States Credit
  Heritage Structure Rehabilitation Tax Credit
  Solar Energy Grant Subtraction
  Tax Subtraction for Two-Income Families
  Determine Tax Credits and Deductions
  Long-Term Care Insurance Credit
  Quality Teacher Incentive Credit
  Earned Income Tax Credit
  Aquaculture Oyster Float Credit
  Sustainable Communities Tax Credit
  Child or Dependent Care Expenses
  Neighborhood Stabilization Credit
  Child and Dependent Care Tax Credit
  Hurricane Tax Relief
 
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