What is the Maryland Nonresident Witholding Tax and how is it computed?
Effective October 1, 2003, Maryland enacted legislation that required nonresident individuals or entities that sold or transferred real property in Maryland to make a withholding payment before the deed or other instrument of transfer could be recorded. The state of Maryland had discovered that many nonresident sellers simply did not realize or had forgotten altogether that they were required to file a Maryland Tax Return when they transferred property. In the case of a nonresident individual the withholding payment is 7.5%. For a nonresident entity the withholding payment is 8.25%. The withholding payment is computed as follows – the amount withheld at closing will be the percentage multiplied by the total sales price less any mortgage or lien balances less the total selling expenses (commission plus any other costs) – that number is then multiplied by 7.5% or 8.25%, depending on the situation, and withheld from the seller at closing. After closing, you may be entitled to a refund or
