Maryland Tax Preparers

[TXEA]

I tried calling the Maryland tax office, but they said the lines are busy.

I have a client that lives in Texas and teaches an online course for a college in Maryland. She has never been to the state of Maryland. Her only connection is through a computer to students all around the country.

The Maryland NR instructions state the following:

A nonresident individual is subject to tax on that portion of the federal adjusted gross income that is derived from tangible property, real or personal, permanently located in Maryland (whether received directly or from a fiduciary) and on income from a business, trade, profession or occupation carried on in Maryland and on all gambling winnings derived from Maryland sources. Adjustments to federal gross income and losses not allocable to Maryland may not be used to reduce Maryland income. You are required to file even if the net Maryland income is a loss.

In general, you must file this return if:
• You are a nonresident of Maryland, • AND, you are required to file a federal return based upon
the income levels in Table 1 or 2, • AND, you received income from sources within Maryland.

So, would Maryland consider an online course taught from Texas to be "carried on in Maryland" or does the "income from sources in Maryland" dictate the filing requirement.

The taxpayer insists the school told her that she would not have to file in Maryland.

[billhaskell]

MD answers

MD is usually pretty good at answering their phone and very good answering tax questions. They are there till 7pm EST at 1-800-mdtaxes, or just email to taxhelp@comp.state.md.us. This is not the answer but tells you where to get the answer. I hope it helps.

[Gary2]

Are you making too much of this? If someone works at Wal-Mart in TX, do they have to file Arkansas taxes because that's where Wal-Mart is headquartered? Or if someone is making money on eBay, do they have to file CA taxes because that's where eBay is headquartered?

Unless the client specifically asked you to come up with a covered opinion, I'd be inclined to take the school's word on this. (Now, if it were a NY school, I might put some more energy into it.)

[TXEA]

Gary2 - I am, but on WalMart W-2, if someone is working in Texas, they do not show state of Arkansas wages on the W-2.

In this instance, the W-2 for the taxpayer has Maryland wages on the Form W-2. She worked from her home in Texas.

Otherwise, I agree, this is a non-issue.