How to fill out mw507 Form - Single and Married Examples

How to fill out MW507 Form – Single and Married Examples

Legal, Tax

In this post, I will show you how to fill out MW507 Form. Learn how to fill out MW507 personal exemptions worksheet without making any mistake.

The Maryland Form MW 507 is the Employee’s Maryland Withholding Exemption Certificate. The MW507 form must be completed so that you know how much state income tax to withhold from your new employee’s wages.

If for some reason, an employee does not file for a withholding tax, you must withhold tax as if the employee had claimed no exemptions.

Also, if a married employee does not claim his married status on the form, the employer must withhold on the basis of the “single employee” withholding tables.

Since the withholding rates for single employees are higher than those for married workers and since the amount of tax withheld from a given wage payment decreases as the number of exemptions claimed increases, it is important that you ask all employees to file the proper certificates.

The law requires that you complete an Employee’s Withholding Allowance Certificate so that your employer, the state of Maryland, can withhold federal and state income tax from your pay. Your current certificate remains in effect until you change it.

Instructions on How to fill out mw507 Form

If you have previously filed as “EXEMPT” from federal or state withholding, you must file a new certificate annually by February 15 of each year.

Complete the Employee’s Withholding Allowance Certificate as follows: Section 1 – Employee Information

– Please check type of Payroll – Regular (RG), Contract (CT), or University of Maryland (UM)

– Name of Employing Agency – Enter name of agency

– Agency Number – Provided by Agency Payroll Office

– Employee Social Security Number

– Employee Name – Complete first name, middle initial, last name

– Home Address – Street name and number or R.D. number

– Address Continued – Apartment number or P. O. Box number.  Pennsylvania residents enter township or borough in which they reside

– City, State, Zip code – Abbreviate state; enter complete five-digit zip code

– County of Residence – Enter Baltimore City or Maryland County in which you presently reside

 

Section 2 – Federal Withholding Form W-4

To complete section 2 see federal worksheet online at: http://www.irs.gov/pub/irs-pdf/fw4.pdf

Section 3 – State Withholding Form   (Choose Appropriate Form)

– Maryland (Form MW 507) – To complete section 3 see Maryland worksheet page 2 online at: http://forms.marylandtaxes.com/current_forms/mw507.pdf

– District of Columbia (Form D-4) – To complete section 3 see District of Columbia worksheet online at : http://otr.cfo.dc.gov/otr/frames.asp?doc=/otr/lib/otr/tax/forms/D-4.pdf

– West Virginia (WV/IT-104) – To complete section 3 see West Virginia worksheet online at: http://www.state.wv.us/taxrev/uploads/it100-1-a.pdf

Section 4 – Employee Signature – Your signature is required.  Withholding Forms are not valid unless signed.

General Instructions on How to Fill the Employee’s Federal Withholding Allowance

Form W-4 (2011)

Purpose. Complete Form W-4 so that your employer can withhold the correct federal income tax from your pay. Consider completing a new Form W-4 each year and when your personal or financial situation changes.

Exemption from withholding. If you are exempt, complete only lines 1, 2, 3, 4 and 7 and sign the form to validate it. Your exemption for 2011 expires February 16, 2012. See Pub. 505, Tax Withholding and Estimated Tax.

Note: If another person can claim you as a dependent on his or her tax return, you cannot claim exemption from withholding if your income exceeds $950 and includes more than $300 of unearned income (for example, interest and dividends).

Basic instructions. If you are not exempt, complete the Personal Allowances Worksheet below. The worksheets on page 2 further adjust your withholding allowances based on itemized deductions, certain credits, adjustments to income, or two-earner/multiple jobs situations. Complete all worksheets

that apply. However, you may claim fewer (or zero) allowances. For regular wages, withholding must be based on allowances you claimed and may not be a flat amount or percentage of wages.

Head of household. Generally, you may claim head of household filing status on your tax return only if you are unmarried and pay more than 50 percent of the costs of keeping up a home for yourself and your dependent(s) or other qualifying individuals. See Pub. 501, Exemptions, Standard Deduction, and Filing Information, for information.

Tax credits. You can take projected tax credits into account

in figuring your allowable number of withholding allowances. Credits for child or dependent care expenses and the child

tax credit may be claimed using the Personal Allowances Worksheet below. See Pub. 919, How Do I Adjust My Tax Withholding, for information on converting your other credits into withholding allowances.

Nonwage income. If you have a large amount of nonwage income, such as interest or dividends, consider making estimated tax payments using Form 1040-ES, Estimated Tax for Individuals. Otherwise, you may owe additional tax. If you have pension or annuity income, see Pub. 919 to find out if you should adjust your withholding on form W-4 or W-4P.

Two earners/Multiple jobs. If you have a working spouse

or more than one job, figure the total number of allowances you are entitled to claim on all jobs using worksheets from only one Form W-4. Your withholding usually will be most accurate when all allowances are claimed on the Form W-4

for the highest paying job and zero allowances are claimed on the others. See Pub. 919 for details.

Nonresident alien. If you are a nonresident alien, see Notice

1392, Supplemental Form W-4 Instructions for Nonresident

Aliens, before completing this Form.

Check your withholding.  After your Form W-4 takes effect, use Pub. 919 to see how the amount you are having withheld compares to your projected total tax for 2011. See Pub. 919, especially if your earnings exceed $130,000 (Single) or $180,000 (Married).

Recent name change? If your name on line 1 differs from that shown on your social security card, call 1-800-772-1213 to initiate a name change and obtain a social security card

2011 INSTRUCTIONS EMPLOYEE’S  STATE  OF MARYLAND  WITHOLDING ALLOWANCE

Line 1
Employee Withholding Allowance
Certificate

a. Number of personal exemptions (total exemptions on lines A, C and D of the
federal W-4 or W-4A worksheet a.

b. Number of additional exemptions for
dependents over 65 years of age b.

c. Number of additional exemptions for certain items, including estimated itemized deductions, alimony payments, allowable childcare expenses, qualified retirement contributions, business
losses and employee business
expenses for the year. c.

d. Number of additional exemptions for taxpayer and/or spouse at least
65 years of age and/or blind d.

e. Total – add lines a through d and
enter here an on line 1 (Form MW507) e.

Exemptions for dependents – to qualify as your dependent, you must be entitled to an exemption for the dependent on your federal income tax return for the corresponding tax year.

Additional exemptions for dependents over
65 years of age – An additional exemption is allowed for dependents who are 65 years of age or older.

Additional exemptions – You may claim additional exemptions for certain items, including estimated itemized deductions, alimony payments, allowable child care expenses, qualified retirement contribu- tions, business losses and employee business expenses for the year. One additional withholding exemption
is permitted for each $3,200 of estimated itemized deductions or adjustments to income that exceed the standard deduction allowance.

NOTE: Standard deduction allowance is 15% of Maryland adjusted gross income with a minimum of $1,500 and a maximum of $2,000 for each taxpayer.

Additional exemptions for taxpayer and/or spouse – An additional $1,000 may be claimed if
the taxpayer and/or spouse is at least 65 years of age and/or blind on the last day of the tax year.

Line 2
Additional withholding per pay period
under agreement with employer – if you are not having enough tax withheld, you may ask your employer to withhold more by entering an additional amount on Line 2.

Line 3
Exemption from withholding. You may be entitled to claim an exemption from the withholding of
Maryland income tax if:

a . last year you did not owe any Maryland income tax and had a right to a full refund of any tax withheld; and
b. this year you do not expect to owe any Maryland income tax and expect to have the right to a full refund of all income tax withheld. If you are eligible to claim this
exemption, your employer will not withhold
Maryland income tax from your wages.

Students and seasonal employees –
whose annual income will be below the minimum filing requirements (annual income less than
$9,350 for 2011) should claim exemption from withholding. This provides more income throughout the year and avoids the necessity of filing a Maryland income tax return.

Line 4
Certification of nonresidence in the State of Maryland- This line is to be completed by residents of Pennsylvania and Virginia who are employed in Maryland and do not maintain a place of abode in Maryland for 183 days or more.

Line 4 is not to be used by residents of other states who are working in Maryland, because such persons are liable for Maryland income tax and withholding from their wages is required.

If you are domiciled in the District of Columbia, Pennsylvania or Virginia and maintain a place of abode in Maryland for 183 days or more, you become a statutory resident of Maryland and you are required to file a resident return with Maryland reporting your total
income. You must apply to your domicile state for any tax credit to which you may be entitled under the reciprocal provisions of the law.

If you are domiciled in West Virginia, you are not re-quired to pay Maryland income tax on wage or salary income, regardless of the length of time you may have spent in Maryland.

Line 5
Under the Servicemembers Civil Relief Act as amended by the Military Spouses Residency Relief Act, you may be exempt from Maryland income tax on your wages if
(i) your spouse is a member of the armed forces present in Maryland in compliance with military orders; (ii) you are present in Maryland solely to be with your spouse; and (iii) you maintain your domicile in another state. If you claim exemption under the SCRA enter your state of
domicile (legal residence) on Line 5; enter “EXEMPT” in the box to the right on Line 5; and attach a copy of your spousal military identification card to Form MW507.

GENERAL INSTRUCTIONS Federal Privacy Act information –
Social Security numbers must be included. The mandatory disclosure of your social security number is authorized by the provisions set forth in the Tax-General Article of the Annotated Code of Maryland. Such num- bers are used primarily to administer and enforce the individual income tax laws and to exchange income tax information with the Internal Revenue Service, other states and tax officials of this state.

Information furnished to other agencies or persons shall be used solely for the purpose of administering tax laws or the specific laws, administered by the person having statutory right to obtain it.

Duties and Responsibilities of Employer – Retain this certificate with your records. You are required to submit a copy of this certificate and accompanying attachments to the

Compliance Division
Compliance Programs Section
301 West Preston Street
Baltimore MD 21201

when received if:
1. you have any reason to believe this certificate is incorrect.
2. the employee claims more than 10 exemptions;
3. the employee claims exemptions from with- holding because he/she had no tax liability for the preceding tax year, expects to incur no tax liability this year and the wages are expected to exceed $200 a week; or
4. the employee claims exemptions from withholding on the basis of nonresidence.
5. the employee claims an exemption from withholding under the Military Spouses Residency Relief Act.

Upon receipt of any exemption certificate (form MW507), the Compliance Division will make a determination and notify you if a change is required.

Once a certificate is revoked by the Comptroller, the employer must send any new certificate to
the Comptroller for approval before implementing the new certificate.

If an employee claims exemption under 3, 4 or 5 above, a new exemption certificate must be filed by February 15th of the following year.

Duties and Responsibilities of Employee –
If, on any day during the calendar year, the number of withholding exemptions that the employee is entitled to claim is less than the number of exemptions claimed on the withholding certificate in effect, the employee shall file a new withholding exemption certificate with the employer within 10 days after the change occurs.

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