There are countless issues that could arise that are related to state and local taxes. By addressing these challenges head-on, it may be possible to avoid any penalties or unnecessary tax liability. A seasoned tax lawyer could assist you with resolving these issues in a timely manner.

If you have questions about your tax obligations to the state of Maryland, now is the time to seek help. Consult with a Rockville state and local tax lawyer about remaining compliant with the Office of the Comptroller of Maryland, and addressing any disputes that come up.

The Office of the Comptroller of Maryland

The Comptroller serves as the chief financial officer for the State of Maryland. Among its other duties, the Office of the Comptroller is responsible for the collection of all state taxes, including personal income tax, which makes it the state-level equivalent of the IRS. It is important for all individuals and businesses to properly report and pay their taxes to remain in good standing with the government.

However, the Office of the Comptroller does more than receive income taxes and process returns. The Comptroller and their deputies also have the ability to audit taxpayers, and they are in charge of the collection of delinquent tax debts, much like the IRS does for the federal government.

Maryland State Income Tax Requirements

State law is clear regarding who must file a tax return each year. Most individuals who were a resident of the state during any given year could be required to file a state return.

Whether or not a person must file a state return depends on their federal tax status. If a person does not have to file a federal tax return, they are also not required to file a state return with the Comptroller as well. A state return is necessary only when a taxpayer’s gross income is at or above a specific threshold. This threshold depends on a few factors, including the age of the taxpayer as well as their marital status. Per Table 1 of the 2021 IRS Publication 550, the thresholds are as follows:

  • Single individual under 65: $12,550; over 65: $14,250
  • Married but filing separately: $12,550
  • Head of household under 65: $18,800; over 65: $20,500
  • Married and filing jointly under 65: $25,100;
    • One spouse over 65: $26,450
    • Both spouses over 65: $27,800
  • Widow(er) under 65: $25,100; over 65: $26,450

If a taxpayer has an income of more than $100,000 and they are at a higher risk of an audit for unfiled tax returns, it is in their best interest to speak with a state and local tax lawyer in Rockville about how to carefully come into compliance.

Reciprocity Agreement with the District

The State of Maryland has a tax reciprocity agreement with Washington D.C. This is important for anyone who works in the nation’s capital but lives in Rockville or elsewhere in Maryland. Typically, in this situation, a taxpayer would face tax obligations in both jurisdictions. The reciprocity agreement allows a taxpayer to request an exemption from withholding in a reciprocal jurisdiction. In other words, a Rockville resident could ask for a waiver that prevents their DC employer from withholding any of their income from their paycheck to the DC Office of tax and Revenue.

This prevents the taxpayer from having to file a return for both DC and Maryland. Taxation issues between states, especially in the DMV, can be complex, and these challenges can lead to mistakes on a tax return. A Rockville state tax attorney can work with an individual or business that is encountering problems with state audits, tax collections, unemployment insurance debts, tax liens and levies issued by the Comptroller, and questions about residency.

Call a Rockville State and Local Tax Attorney Today

Taxes are complicated, especially when state-level returns overlap with federal returns. The Comptroller of Maryland has just as much power to conduct audits and impose penalties as the IRS does. If you have concerns about what this might mean for you, discuss your situation with a Rockville state and local tax lawyer today.

Attorney John Pontius

Pontius Tax Law, PLLC is a tax law firm that strives to resolve sensitive tax problems through trust, dedication and value. The law firm was founded by John Pontius with offices in Washington, DC,  Rockville, MD, Bethesda, MD, Fairfax, VA, and Alexandria, VA. Mr. Pontius represents individual and business clients with sensitive and serious tax matters before the Internal Revenue Service and state taxing authorities. His client base is local, national, and international.

Over the course of his career, Mr. Pontius has represented businesses and individuals with complex tax issues in the following areas: FBAR examinations, offshore and domestic disclosures, FATCA, FIRPTA, tax planning, unfiled tax returns, release of tax liens and levies, trust fund recovery penalty, IRS and state audit examinations, as well as appeals, penalty abatement, U.S. Tax Court litigation, along with defense of tax fraud and evasion. If you require assistance from a tax lawyer, contact Mr. Pontius to discuss your situation.

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John helped us with a DC tax audit and succeeded in getting us a "no change" final decision. The issues were related to two flow-through entities and the use of carry-forward operating losses -- something that the DC auditors struggled to understand and with which they did not have any...
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