Understanding Taxes Module 5: Filing Status

Exemptions, deductions and certain credits must be prorated using the Maryland income factor. Other than being married, there are no special qualifications for the married filing jointly or MFJ and the married filing separately or MFS filing statuses. You and your spouse may choose whether to file jointly or separately, but you must both use the same filing status for the year.

Beginning in 2022, senior citizens are eligible for a new tax credit, among other benefits they can take advantage of. Additionally, seniors should consult our filing guidelines for seniors containing pertinent information and answers to your most frequently asked questions. Part-year residents with pensions should complete the pension exclusion worksheet using total taxable pension and total Social Security and Railroad Retirement benefits as if you were a full-year resident. Prorate the amount on line 5 by the number of months of Maryland residence divided by 12. However, if you began receiving your pension during the tax year you became a Maryland resident, use a proration factor of the number of months you were a resident divided by the number of months the pension was received.

Married Filing a Separate Return

Perhaps that’s why for the 2020 tax year—the most recent year for which IRS statistics are available—14 times as many returns had the married-filing-jointly status compared to married-filing-separately. This means that the taxpayer must have paid more than half of the total household bills, including rent or mortgage, utility bills, insurance, property taxes, groceries, repairs, and other common household expenses. Some examples of qualifying family members include a dependent child, grandchild, sibling, grandparent, or anyone else you can claim as an exemption. Married filing jointly is best if only one spouse has a significant income. If both spouses work and the income and itemized deductions are large and very unequal, it may be more advantageous to file separately. Non-married individuals may choose to file as head of household if they meet certain guidelines.

However, a donor may not claim the credit on both Form 500CR and Form 502CR. PTE members that are eligible for the credit must claim it on the Business Income Tax Credit Form 500CR. Corporations and Fiduciaries that are eligible to claim the credit must use Form 500CR to do so. Even if you are not required to file a federal return, you may be required to file a Maryland return if your Maryland addition modifications added to your gross income exceed the filing requirement for your filing status.

Module 5: Filing Status

Typically, unmarried people who paid more than half the cost to keep up a home for the year and provided most or all the support for at least one other person for more than half the year. Selecting a filing status is easy for some people, not so much for others. Be sure to check the appropriate filing status on your North Carolina return. Before checking on your refund, have your Social Security number, filing status, and the exact whole dollar amount of your refund ready. Also, some married filers just prefer to keep their tax and finances separate from each other.

Do not include Social Security numbers or any personal or confidential information. The web pages currently in English on the FTB website are the official and accurate source for tax information and services we provide. Any differences created in the translation are not binding on the FTB and have no legal effect for compliance or enforcement purposes. If you have any questions related to the information contained in the translation, refer to the English version. Conclusions are based on information provided by you in response to the questions you answered.

Property Tax

This filing status might also make sense if one spouse has a large number of out-of-pocket medical expenses they would like to deduct but your combined adjusted gross income precludes them from taking full advantage of the deduction. The qualified widow or widower status lets you file as if you were married filing jointly. That gets you a much higher standard deduction and better tax bracket situation than if you filed as single. However, if you and your spouse are living apart but not legally separated according to state law, you can’t choose single as your filing status. You can file jointly, separately, or potentially as head of household if you meet certain tests. Choosing the correct filing status is very important as you complete your personal income tax return.

If you are a legal resident of another state but are stationed in Maryland, your military income is not subject to Maryland income tax. Donors claim the credit by including the certification at the time https://turbo-tax.org/filing-status/ the Maryland income tax return is filed. Individuals that are eligible to claim the income tax credit and are not PTE members may elect to claim the credit using Form 502CR, instead of Form 500CR.

Qualifying widow(er) with dependent child

The local income tax is calculated as a percentage of your taxable income. Local officials set the rates, which range between 2.25% and 3.20% for tax year 2020. For example, if you and your spouse are both 65 or older, are planning to file jointly, and you received less than $27,400 in gross income during 2020, you do not have to file a Maryland return. To qualify for the credit, a health care practitioner must have worked in an area of Maryland identified as having a health care workforce shortage by the Maryland Department of Health. The health care practitioner must have worked a minimum of three rotations, each consisting of at least 100 hours of community-based clinical training in family medicine, general internal medicine, or general pediatrics. To qualify for the credit, a nurse practitioner or licensed physician must have worked in an area of Maryland identified as having a health care workforce shortage by the Maryland Department of Health.

• The taxpayer must apply to and receive approval by the DHCD for each contribution for which a credit is claimed.
• If your total military pay exceeds $30,000, you do not qualify for this subtraction.
• To qualify for the credit, the licensed physician must have worked in an area of Maryland identified as having a health care workforce shortage by the Maryland Department of Health (MDH).
• Individuals who are eligible to claim the Community Investment Tax Credit (CITC), and who are not PTE members may elect to claim this credit on Part H of Form 502CR, instead of claiming the credit on Form 500CR.
• Be sure to include your completed Form 502CR with your Maryland return, along with a copy of the return you filed with the other state and/or a locality in another state.
• Exemption certificates issued to qualifying veterans’ organizations will expire on September 30, 2017.

Local Tax Rate Changes – There are no local tax rates increase for tax year 2021, however, two counties (St Mary’s and Washington’s) have decreased their local rate for calendar year 2022. Click here for a complete list of current city and local counties’ tax rate. If you need to make certain changes to your original Maryland return that has already been filed and processed, you must file Form 502X for 2022 to amend your original tax return.

Methods of Filing Maryland Tax Returns

The total dependent exemptions should be carried over to part C of the Exemptions section on Form 502. You must complete the Exemptions section of the https://turbo-tax.org/ return with Form 502B if completing the Form 502. Form 502B must be completed and attached to Form 502 if you are claiming one or more dependents.

• Fiscal year returns are due on the 15th day of the 4th month following the close of the fiscal year.
• Because America has a progressive tax system, the tax rate steadily increases as that person’s income increases.
• Beginning with tax year 2018, if you are age 55 or older, you will be able to subtract up to $15,000 of the military retirement income including death benefits.
• ”, read on to learn more about the United States IRS filing tax status with some information about each one.
• Make sure to check with your state’s specific laws for state filing purposes.
• Additionally, seniors should consult our filing guidelines for seniors containing pertinent information and answers to your most frequently asked questions.

The U.S. Office of Personnel Management provides an online service for retirees to begin, change or stop the withholding of Maryland income taxes from your annuity. Complete Part E of Form 502CR and include Form 502CR with your return. Instruction 13 of the Maryland resident tax booklet provides further details on claiming the subtraction. You can use the Two-Income Married Couple Subtraction Worksheet in Instruction 13 of the Maryland resident tax booklet to help calculate the correct subtraction amount for your situation. You and your spouse may claim an additional $1,000 exemption on the Maryland return for being 65 years of age or older or blind.