Article Structure
Dos and Don'ts
Things to Do When Filling Out the Maryland 505NR Form:
- Read the instructions carefully before starting.
- Use black or blue ink to fill out the form.
- Double-check your Social Security numbers for accuracy.
- Ensure all income is reported, including non-Maryland income.
- Calculate your Maryland Adjusted Gross Income accurately.
- Use the correct tax table or computation worksheet for your income range.
- Complete all relevant sections without leaving any blanks.
- Keep a copy of your completed form for your records.
- Submit your form before the deadline to avoid penalties.
Things Not to Do When Filling Out the Maryland 505NR Form:
- Do not use pencil or any ink color other than black or blue.
- Avoid guessing your income amounts; use accurate figures.
- Do not skip instructions; follow them line by line.
- Do not leave out any necessary documentation when submitting.
- Refrain from making calculations without checking your work.
- Do not ignore the special instructions for Form 515 users if applicable.
- Do not submit the form without a final review.
- Never forget to sign and date your form before submission.
- Do not wait until the last minute to file; plan ahead.
Misconceptions
Understanding the Maryland 505NR form can be challenging, and several misconceptions often arise. Here are six common misunderstandings about this nonresident income tax form:
- It’s only for Maryland residents: The 505NR form is specifically designed for nonresidents who earn income in Maryland. It allows them to report and calculate their tax obligations based on income sourced from the state.
- All income is taxable: Not all income earned by a nonresident is subject to Maryland tax. Non-Maryland income, which is income not earned within the state, does not need to be reported on this form.
- You cannot claim deductions: Nonresidents can claim deductions on the 505NR form, including standard deductions or itemized deductions. It’s essential to calculate these correctly to reduce taxable income.
- Filing is optional: If you earn income in Maryland as a nonresident, filing the 505NR form is mandatory. Failure to file can result in penalties and interest on unpaid taxes.
- Only wages are taxable: Nonresidents may have various types of income subject to Maryland tax, including wages, rental income, and certain investment earnings. Each type must be reported appropriately.
- Using the form is straightforward: While the form provides detailed instructions, many find it complex. Careful attention to each line is necessary to ensure accurate calculations and compliance with state tax laws.
By addressing these misconceptions, individuals can better navigate the complexities of the Maryland 505NR form and fulfill their tax obligations with confidence.
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Key takeaways
Here are some important points to keep in mind when filling out and using the Maryland 505NR form:
- Purpose: The Maryland 505NR form is used by nonresidents to calculate their Maryland income tax.
- Attach it: Always attach the 505NR form to your main tax return, either Form 505 or Form 515.
- Accurate Information: Ensure that you enter your Social Security number and your spouse's Social Security number correctly.
- Taxable Income: Start by entering your taxable net income from the appropriate line of Form 505 or Form 515.
- Tax Calculation: Use the tax table or computation worksheet to determine your tax based on your taxable income.
- Federal Adjusted Gross Income: You will need to provide your federal adjusted gross income from Form 505 or Form 515.
- Maryland Adjusted Gross Income: This is calculated by subtracting certain non-Maryland income and other deductions from your federal adjusted gross income.
- Income Factor: Calculate your Maryland income factor by dividing your Maryland adjusted gross income by your federal adjusted gross income.
- Deductions: Decide whether you will take the standard deduction or itemize your deductions. This will affect your taxable income.
- Final Tax Amount: Multiply your calculated tax by the nonresident factor to determine your final Maryland tax liability.
Filling out tax forms can be complex, but taking it step by step can help simplify the process. Make sure to review your entries for accuracy to avoid any issues. If you have questions, consider reaching out to a tax professional for assistance.
Guidelines on Utilizing Maryland 505Nr
Completing the Maryland 505NR form is essential for nonresidents who need to calculate their Maryland tax obligations. This process involves gathering specific income details and following a structured approach to fill out the form accurately. Here are the steps to guide you through the process.
- Begin by entering your Social Security Number and your spouse’s Social Security Number, if applicable.
- Print your first name, middle initial, and last name, as well as your spouse’s information if filing jointly.
- In Part I, enter your taxable net income from Form 505, line 31 (or Form 515, line 32) on line 1.
- Find the corresponding tax amount in the tax table or computation worksheet for your income on line 2.
- Proceed to Part II. Enter your federal adjusted gross income from Form 505 (or Form 515), line 17 (Column 1) on line 3.
- If claiming the earned income credit, enter your earned income on line 3a.
- Enter the total from Form 505, line 21 on line 4.
- If applicable, enter your taxable military income from Form 505, line 22 on line 5.
- Enter your subtractions from line 23 of Form 505 or Form 515 on line 6a.
- On line 6b, enter any non-Maryland income that has not been included on lines 5 or 6a.
- Add lines 5 through 6b and enter the total on line 7.
- Calculate your Maryland Adjusted Gross Income by subtracting line 7 from line 4. Enter this amount on line 8.
- If using the standard deduction, recalculate it based on the income on line 8 and enter it on line 8a.
- Determine your Maryland income factor by dividing line 8 by line 3. Enter this value on line 9.
- For the deduction amount, if using the standard deduction, multiply the standard deduction on line 8a by line 9 and enter it on line 10a. If itemizing, use line 10b instead.
- Calculate your net income by subtracting line 10a or 10b from line 8. Enter this amount on line 11.
- Multiply the total exemption amount from Form 505, line 28 (or Form 515, line 29) by line 9 and enter on line 12.
- Calculate your Maryland Taxable Net Income by subtracting line 12 from line 11. Enter this on line 13.
- Enter the tax amount from line 2 on line 14.
- Divide the amount on line 13 by line 1 to find the Maryland Nonresident factor. Enter this on line 15.
- Multiply line 14 by line 15 to find your Maryland tax. Enter this amount on line 16.
- For the special nonresident tax, multiply line 13 by .0125 and enter it on line 17.
Form Preview Example
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MARYLAND |
NONRESIDENT INCOME |
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TAX CALCULATION |
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505NR |
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ATTACH TO YOUR TAX RETURN |
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Social Security Number |
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Spouse's Social Security Number |
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PrintUsing Blackor Ink |
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Spouse’s first name |
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Your first name |
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If you are filing Form 505, use the Form 505NR Instructions appearing on page 2 of this form.
If you are filing Form 515, use the Form 505NR Instructions appearing in Instruction 18 of the Form 515 Instructions.
PART I – CALCULATION OF TAX WITHOUT ALLOWING CERTAIN MODIFICATIONS |
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Enter Taxable net income from Form 505, line 31 (or Form 515, line 32) |
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2. |
Enter tax from Tax Table or Computation Worksheet Schedules I or II |
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Continue to Part II. |
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PART II – CALCULATION OF MARYLAND TAX |
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Enter your federal adjusted gross income from Form 505 |
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(or Form 515), line 17 (Column 1) |
3. |
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3a. |
Earned Income (See instructions.) |
3a. |
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Enter your federal adjusted gross income plus additions from Form 505 (or 515) line 21. . . . . .4. |
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Enter the Taxable Military Income of a Nonresident from line 22 of Form 505.. . . . . . . . . . . . . .5. |
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6a. |
Enter your subtractions from line 23 of Form 505 or Form 515 |
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6b. |
Enter |
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or 6a of this form (See instructions on page 2.) |
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7. |
Add lines 5 through 6b |
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8. |
Maryland Adjusted Gross Income. Subtract line 7 from line 4 |
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If you are using the standard deduction, recalculate the |
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standard deduction based on the income on line 8 and |
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enter on line 8a |
8a. |
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9.Maryland Income Factor. Divide line 8 by line 3. The factor cannot exceed 1.000000 and cannot be less than 0. If line 8 is 0 or less, the factor is 0. If line 8 is greater
than 0 and line 3 is 0 or less, the factor is 1.000000 . . . . |
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10. Deduction amount. |
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If you are using the standard deduction, multiply the |
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standard deduction on line 8a by line 9 of this form |
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and enter on line 10a |
10a. |
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If you are itemizing your deductions, multiply the |
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deduction on Form 505, line 26d, by line 9 of this |
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form and enter on line 10b |
10b. |
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Form 515 Users, see Instruction 18 in Form 515 Instructions. |
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11. |
Net income (Subtract line 10a or 10b from line 8.) |
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Exemption amount. Multiply the total exemption amount on Form 505, line 28 |
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(or Form 515, line 29) by line 9 |
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Maryland Taxable Net Income (Subtract line 12 from line 11.) |
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Enter the tax amount from line 2 of this form |
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Maryland Nonresident factor: Divide the amount on line 13 on this form by line 1. |
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If more than 1.000000, enter 1.000000. If 0 or less, the factor is 0 |
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Maryland Tax. Multiply line 14 by line 15. Enter this amount on Form 505, line 32a |
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(Form 515, line 33) |
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Special nonresident tax. Multiply line 13 of this form by .0125. Enter this amount on |
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Form 505, line 32b. If line 13 is 0 or less, enter 0 |
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FOR FORM 515 FILERS ONLY.
If you are: (1) a nonresident employed in Maryland and (2) you are a resident of a local jurisdiction that imposes a local income or earnings tax on Maryland residents, then you must file a Form 515 to report and pay a tax on your Maryland wages. Form 515 filers pay a local income tax instead of the Special Nonresident Tax.
18. Local Income Tax. Multiply line 13 of this form by the local rate of the Maryland county (or Baltimore City) where you are employed. Enter this amount on Form 515, line 40.
If line 13 is 0 or less, enter 0 |
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18. ___________________ |
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MARYLAND |
NONRESIDENT INCOME |
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FORM |
TAX CALCULATION |
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505NR |
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INSTRUCTIONS |
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2013 |
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Using Form 505NR, Nonresident Income Tax Calculation, follow the
Line 1. Enter the taxable net income from Form 505, line 31.
Line 2. Find the income range in the tax table that applies to the amount on line 1 of Form 505NR. Find the Maryland tax corresponding to your income range. Enter the tax amount from the tax table. If your taxable income on line 1 is $50,000 or more, use the Maryland Tax Computation Worksheet schedules at the end of the tax table.
Line 3. Enter your federal adjusted gross income (FAGI) from Form 505, line 17 (column 1).
Line 3a. If you are claiming a federal earned income credit (EIC), enter the earned income you used to calculate your federal EIC.
Earned income includes wages, salaries, tips, professional fees and other compensation received for personal services you performed. It also includes any amount received as a scholarship that you must include in your federal AGI.
Line 4. Enter the amount from Form 505, line 21.
Line 5. Taxable Military Income of a nonresident, if applicable.
Line 6a. Enter the amount of your subtractions from line 23 of Form 505.
Line 6b. Enter any
Important Note: Make sure that you follow the instruction for line 6b above to arrive at the correct amount. The
Be sure to include the following items if not already included on line 5 or 6a.
•Maryland salaries and wages should be included if you are a resident of a reciprocal state.
•Income subject to tax as a resident when required to file both Forms 502 and 505 should be included.
•Line 17 of column 3 on Form 505 (or 515) should also include income for wages earned in Maryland by a nonresident rendering police, fire, rescue or emergency services in an area covered under a state of emergency declared by the Maryland Governor, if the wages are paid by a nonprofit organization not registered to do business in the state and not otherwise doing business in the state, or by a state, county or political subdivision of a state, other than the State of Maryland.
PAGE 2
Line 7. Add lines 5 through 6b.
Line 8. Subtract line 7 from line 4. This is your Maryland Adjusted Gross Income.
Line 8a. If you are using the standard deduction amount, recalculate the standard deduction (line 8) based on the Maryland adjusted gross income.
Line 9. Compute your Maryland income factor by dividing line 8 by line 3. Carry the factor to six decimal places. The factor cannot exceed 1.000000 and cannot be less than 0. If line 8 is 0 or less, the factor is 0. If line 8 is greater than 0 and line 3 is 0 or less, the factor is 1.000000.
Line 10a. If you are using the standard deduction, multiply the standard deduction on line 8a by the Maryland Income Factor (line 9) and enter on line 10a.
Line 10b. If you are itemizing your deductions, multiply the deduction on Form 505 line 26d by the Maryland Income Factor (line 9) and enter on line 10b.
Line 11. If you are using the standard deduction, subtract line 10a from line 8. If you are using itemized deductions, subtract line 10b from line 8.
Line 12. Multiply the total exemption amount |
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505, line 28 by the factor on line 9. |
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Line 13. Subtract line 12 from line 11. This |
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your |
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Maryland taxable net income. |
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Line 14. |
Enter the tax from line 2 of this form. |
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Line 15. |
Divide the amount on line 13 of this form by the |
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amount on line 1. Carry this Maryland nonresident |
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factor to six decimal places. If more than |
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1.000000, enter 1.000000. If 0 or less, enter 0. |
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Line 16. |
Multiply line 14 by line 15 to arrive at your |
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Maryland tax. Enter this amount on line 16 and |
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on Form 505, line 32a. |
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Line 17. |
Multiply line 13 by .0125. Enter this amount on |
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line 17 and on Form 505, line 32b. If line 13 is |
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0 or less, enter 0. |
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On Form 505, add lines 32a and 32b and enter the total on line 32c.
Note: If you are using Form 505NR with Form 505, follow the instructions above. If you are using Form 505NR with
Form 515, please follow Instruction 18 in the Form 515 instructions.
Common mistakes
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Failing to enter the correct Social Security Numbers for both yourself and your spouse. This can lead to processing delays or errors.
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Not using black or blue ink when filling out the form. This is a requirement and using the wrong color can cause issues.
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Neglecting to refer to the correct form instructions. Ensure you are using the instructions for Form 505NR, especially if you are also filing Form 515.
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Incorrectly calculating your taxable net income on line 1. Double-check the figures from Form 505 or Form 515 to avoid mistakes.
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Overlooking the Maryland tax table for the correct tax amount on line 2. Always verify that you are in the right income range.
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Forgetting to include non-Maryland income on line 6b, which can lead to an inaccurate calculation of your tax.
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Not recalculating the standard deduction based on your Maryland adjusted gross income on line 8a, if applicable.
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Confusing the Maryland income factor calculation on line 9. Remember that it should be between 0 and 1.000000.
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Failing to correctly multiply the deduction amount by the income factor on lines 10a or 10b, which can significantly affect your tax calculation.
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Not subtracting the exemption amount from your net income on line 12, which can result in an inflated taxable income.
Learn More on This Form
What is the purpose of the Maryland 505NR form?
The Maryland 505NR form is designed for nonresidents who earn income in Maryland. It helps calculate the Maryland income tax owed based on the income earned within the state. If you are a nonresident and need to report your Maryland income, this form is essential to ensure compliance with state tax laws.
Who needs to file the Maryland 505NR form?
Nonresidents who have earned income in Maryland must file the Maryland 505NR form. This includes individuals who work in Maryland but reside in another state. If you are also required to file a federal tax return, you must attach the 505NR to your Maryland tax return to report your nonresident income accurately.
How do I calculate my Maryland taxable net income using the 505NR form?
To calculate your Maryland taxable net income, follow the instructions provided on the form. Start by entering your federal adjusted gross income. Then, account for any additions and subtractions specific to Maryland. After calculating your Maryland adjusted gross income, apply the Maryland income factor. Finally, subtract any exemptions to arrive at your Maryland taxable net income. Ensure that you complete each step carefully to avoid errors.
What if I have income from outside Maryland?
When completing the 505NR form, you must report any non-Maryland income that is not included in the taxable income calculations. This includes income earned in other states or jurisdictions. Be sure to follow the instructions carefully, as certain types of income may need to be included or excluded based on specific guidelines outlined in the form.
What happens if I do not file the Maryland 505NR form when required?
Failing to file the Maryland 505NR form when required can lead to penalties and interest on any unpaid taxes. The Maryland Comptroller's office may take action to collect the owed taxes. It is crucial to file the form on time to avoid complications and ensure compliance with state tax regulations.