The following information is taken from the Maryland Employer Withholding Tax Alert Notice to Employees. FosterThomas HR has provided the text here for ease of use by employers and employees across the state. Should you have questions regarding EITC, please contact your tax advisor and/or the Comptroller of Maryland.
Did you know that federal and Maryland earned income tax credits are available to certain low-income individuals and families?
These credits can reduce the amount of income tax you owe or increase your income tax refund; and, you may qualify to receive some of these credits even if you did not earn enough income to be required to file a tax return.
2014 Maryland Earned Income Tax Credit (EITC)
Maryland’s EITC is a credit for certain taxpayers who have income and have worked. The state EITC reduces the amount of Maryland tax you owe. The local EITC reduces the amount of county tax you owe. Some taxpayers may even qualify for a refundable Maryland EITC.
Most taxpayers who are eligible and file for a federal EITC can receive the Maryland state and local EITC. The allowable Maryland credit is up to one-half of the federal credit. To be eligible for the federal and Maryland EITC, your federal adjusted gross income and your earned income must be less than the following:
- $46,997 ($52,427 married filing jointly) with three or more qualifying children
- $43,756 ($49,186 married filing jointly) with two qualifying children
- $38,511 ($43,941 married filing jointly) with one qualifying child
- $14,590 ($20,020 married filing jointly) with no qualifying children
To receive the Maryland EITC, you must be eligible for the federal credit. If your income is less than the amounts shown in this notice, visit the Internal Revenue Service Web site at www.irs.gov, or contact your tax advisor, to learn if you meet the other requirements. You also may be entitled to a refundable Maryland EITC and to a local EITC. If you are a part-year resident or a nonresident of Maryland, you may be entitled to a prorated share of the credit, if you have Maryland income.
For more information about the Maryland EITC, visit our Web site at www.marylandtaxes.com or call 1-800-MDTAXES (1-800-638-2937) or from Central Maryland 410-260-7980. You must have a valid Social Security Number and file a tax return to claim this credit.
Reminder: Legally married same-sex couples must file as married filing jointly or married filing separately for tax year 2014. Employees wishing to adjust their withholding to reflect married status should complete a new Maryland Form MW507, as well as federal Form W-4.
To Download the 2014 Maryland Earned Income Tax Credit Notice to Employees, click on the button below:
You may choose to notify all of your employees; or you may choose to notify only those employees with wages less than or equal to the amounts shown above.
You may use the sample notice above (click on the red download button), or you may choose to develop a notice of your own.
Maryland Withholding Tax Facts (Employers)
For more information about filing your employer withholding tax forms, reconciliation statement and other employer withholding related forms, please see the 2015 edition of Withholding Tax Facts at www.marylandtaxes.com
For more information about the federal EITC, visit: www.irs.gov/individuals or call the IRS at 1-800-829-1040
FosterThomas HR Consulting
Should you need assistance drafting an EITC notice for your employees, please contact an HR specialist at FosterThomas HR. Our exceptional HR management solutions are designed to provide complete and continuous HR compliance, guidance, employee cultivation, training and administration.