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I am a Maryland resident who owns a business in New Jersey. I pay tax on my income to both states. Am I entitled to a credit?

In Comptroller v. Wynne, the Court of Appeals recently held that Maryland’s denial of a credit towards the local income tax portion of Maryland’s income tax regime for taxes paid to other states by a Maryland resident is unconstitutional. For example, if a resident generated income in a state with a 9% income tax rate, Maryland allowed a credit against the Maryland state tax but not against the local tax due (up to 3.2%). Thus, some residents were “double taxed” and effectively overpaid Maryland in an amount equal to their local income tax. Under Wynne, Maryland taxpayers with out-of-state income should consult with a tax professional and should strongly consider acting immediately to file refund claims for amounts overpaid under these circumstances in prior years.

Rosenberg Martin Greenberg

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Rosenberg Martin Greenberg

705 Melvin Avenue Annapolis, MD 21401
Phone: 410-727-6600
Map & Directions