On May 18, 2015, the U.S. Supreme Court, based upon a 5-4 ruling, struck down a Maryland income tax law, calling it “discriminatory” because it doubled the tax on income residents earned in other states. Maryland levies a state income tax and collects a local “piggy-back” tax in each of the state’s 23 counties and the city of Baltimore. While Maryland allows residents to claim a credit against the state tax for taxes paid to other states where the money was earned, it does not allow them to do so for the local taxes. This decision will cost the state millions of dollars in revenue as residents who work out of state may now be able to reduce their future tax liability and seek refunds for prior years.
We will be checking all pertinent returns to determine if it is economically worthwhile to amend prior years’ returns, in which case we will contact you to discuss the filings. Notwithstanding, please feel free to contact us at 410-356-5900 if you have any questions.Categories: Tax