What Is a Maryland MW507 Withholding Form?

Form MW507, the Employee’s Maryland Withholding Exemption Certificate, is a state tax document used by employers to determine how much Maryland state and local income tax to withhold from an employee’s wages. It is the state-level counterpart to the federal Form W-4. Completing this form accurately ensures that the tax deducted from each paycheck aligns with your annual tax liability, preventing a large tax bill or a significant refund when you file your state tax return.

Who Needs to Complete Form MW507

An employee must complete Form MW507 when starting a new job to establish their initial tax withholding. Without a completed form, an employer may be required to withhold at the highest possible rate, which is the single rate with zero exemptions. This could result in a larger portion of your pay being withheld than necessary.

The form should also be updated whenever your personal or financial situation changes. Life events such as marriage, divorce, the birth of a child, or a change in dependents will alter the number of exemptions you can claim. A substantial change in income for you or your spouse may also require an adjustment to your withholding to avoid tax underpayment or overpayment.

Information Required to Complete the Form

To complete the form, you will provide personal information, including your full name, Social Security Number, and address. You must also indicate your county of residence to calculate local income tax withholding. Nonresidents who work in Maryland must enter the Maryland county or Baltimore City where they are employed.

You will select a filing status, such as Single, Married Filing Jointly, or Married, but withhold at Single Rate. This should match the filing status you anticipate using on your annual Maryland income tax return. The “Married, but withhold at Single Rate” option is often chosen by two-earner households to prevent under-withholding, as it applies a higher rate to each spouse’s income.

You will calculate your total number of allowances, which directly reduces the amount of income subject to withholding. The form includes a “Personal Exemption Worksheet” to guide this calculation. You can claim exemptions for yourself, your spouse if they will not claim themselves on their own form, and any qualifying dependents.

You can claim a full exemption from Maryland withholding only under specific circumstances. To qualify, you must certify that you had no Maryland income tax liability in the previous tax year and expect none for the current year. This status is often applicable to students or part-time workers with very low earnings. If your wages are expected to exceed $200 per week, your employer may be required to submit the form to the Comptroller of Maryland for review.

The form provides a line to request that an additional flat dollar amount be withheld from each paycheck. This is useful for individuals with other income not subject to withholding, such as from freelance work or investments. By increasing your withholding, you can cover the tax liability from this other income and avoid making quarterly estimated tax payments.

Submitting the Completed Form

Once you have filled out the form, you must sign and date it. Your signature certifies under penalty of perjury that the information provided is correct. An unsigned form is not considered valid by your employer or the state.

The completed and signed Form MW507 should be given directly to your employer. Do not send the form to the Comptroller of Maryland or any other government agency unless specifically instructed to do so.

After you submit the form, your employer will use the information to update their payroll system. The changes to your withholding will take effect on a future paycheck. Review your first pay stub after submitting a new form to verify that the withholding amount has been adjusted as expected.

You should make a copy of the completed Form MW507 for your personal records before giving it to your employer. This copy serves as a reference for how your withholding is calculated and can be useful if questions arise later.