If you are required to file federal Form 1040NR (or 1040NR-EZ) to the IRS as a nonresident alien, how you file your Maryland income tax return depends on whether you are a legal resident of Maryland or a nonresident.
If you were domiciled in Maryland on the last day of the tax year, or you maintained a place to live in Maryland and were physically present in Maryland for more than six months (183 days) of the tax year, then you are a legal Maryland resident. In that case, you must file a Maryland resident tax return for the full tax year, using Form 502.
If you do not meet the above definition, you are not a resident of Maryland. You will need to file a nonresident income tax return to Maryland, using Form 505 and Form 505NR if you have income derived from:
- tangible property, real or personal, permanently located in Maryland;
- a business, trade, profession or occupation carried on in Maryland; or,
- gambling winnings derived from Maryland sources.
If you must file a Maryland tax return, you cannot use the joint filing status or head of household filing status if you are a nonresident alien filing a federal 1040NR.
You must report the same income on your Maryland return as you reported on Form 1040NR. You must enter on line 1 of your Maryland return the federal adjusted gross income amount from your 1040NR form.
Additions and Subtractions
You must list any additions or subtractions on Maryland forms 502 and 505 that are required under Maryland tax law and federal tax law.
- If you have income that is exempt on federal Form 1040NR because of a treaty between the United States and your country of residence, you must add back this income on your Maryland return. If you are using Form 502, enter the amount on line 5 and use code letter "g". If you are using Form 505, enter the amount on line 19 and use code letter "e."
- If you receive a sum of money that is not taxable on the 1040NR form, and that same item would not be taxable regardless of what country you are from, then this item would not generally be taxable on the Maryland tax return. For exceptions to this general rule, see Instruction 12 in the Maryland resident tax booklet or nonresident tax booklet.
- You will subtract from your income any items which you must include on your 1040NR form which are not taxable in Maryland or are treated differently under Maryland tax law. See Instruction 13 in the tax booklets.
You should report the same itemized deductions that you claimed on your federal 1040NR - with one exception: state and local income taxes. You must subtract from your total deductions on your Maryland return any state or local income taxes that you included as an itemized deduction. See Instruction 14 in the resident tax booklet or Instruction 16 in the nonresident tax booklet.
Even though you may be required to claim itemized deductions on your federal 1040NR, you have the option to claim the Maryland standard deduction or itemized deduction method on the Maryland return.
You may claim the same number of exemptions on your Maryland return that were allowed on the federal 1040NR.
Age and Blindness
If you are 65 years or older, or are legally blind, you may claim an additional $1,000 exemption for age or blindness on the Maryland return.
Generally, nonresident aliens who are nationals of the United States or residents of Mexico or Canada may claim a personal exemption for their spouse if the spouse had no gross income for U.S. tax purposes and cannot be claimed as a dependent on another taxpayers return.
Nonresident aliens who are residents of the Republic of Korea (South Korea) must meet an additional requirement to claim their spouse as an exemption: the spouse must have lived with the taxpayer in the United States at some time during the tax year. Students and business apprentices who are residents of India may also claim their spouse under certain circumstances (See IRS Publication 519).
If your spouse meets the criteria noted above, you can claim an exemption for your spouse in the Exemptions section of the Maryland return.
You may not claim any other dependents unless the dependents are residents of the United States, Canada, or Mexico. The dependents are entitled to an additional exemption for age if they are 65 years of age or older.
Only U.S. nationals and residents of Canada, Mexico, and the Republic of Korea (South Korea), may claim exemptions for their dependents. If you were a U.S. national (American Samoan or a Northern Mariana Islander who chose to be a U.S. national) or a resident of Canada or Mexico, you can claim exemptions for your children and other dependents on the same terms as U.S. citizens. See IRS Publication 501 for more details.
Residents of Other Countries
You may not claim any exemptions for a spouse or dependents if you are a nonresident alien from any other country and are required to file a federal Form 1040NR.
If you are a nonresident for Maryland tax purposes, you must prorate your exemptions and deductions following the instructions in the nonresident tax booklet.
Earned Income Tax Credit
You cannot claim an earned income tax credit if you are a nonresident alien required to file a federal 1040NR. You must qualify and elect to be taxed as a resident alien with IRS on your worldwide income in order to claim the earned income tax credit.