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Withholding for Eligible Rollover Distributions

If the payor of an eligible rollover distribution made to a Maryland resident is required to have federal income tax withheld from that distribution, then Maryland income tax must be withheld from the distribution at a rate of 7.75 percent.

The withholding specifically applies to an eligible rollover distribution within the meaning of 3405(c) of the Internal Revenue Code, subject to mandatory withholding of federal income tax and received by a domiciliary or statutory resident of Maryland.

The 7.75 percent tax must be paid to the Comptroller of Maryland with Form MW506 (Employer's Return of Income Tax Withheld). If the payor of the distribution is not currently registered with the Comptroller and has not established a withholding account, the payor can register online. Payment may also be made online for free through our bFile service.

For more information, see Administrative Release 41 - Withholding on Designated Distributions from Retirement Plans

Links for Withholding Information
Business Tax Types
Income Tax
Employer Withholding
Withholding Information
  Withholding for Eligible Rollover Distributions
  Earned Income Tax Credit Information Requirement
  Withholding for Nonresident Contractors
  Taxable Wages
  Withholding for Gambling Winnings
  Withholding Exemptions
  Nonresident Income Tax Rate
  Withholding for Domestic Employees
  Withholding for Nonresident Sale of Property
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