Transcript: Comptroller Tax Chat March 21,2013

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(Mar 21 2013, 10:58:21 -07:00 PDT – Mar 21 2013, 12:19:17 -07:00 PDT)

 

Time From -> To Message
Mar 21, 10:58:21 Tax Chat Moderator -> Everyone Thanks for joining us. We’re going to get started in a few minutes, but please feel free to submit questions now.
Mar 21, 10:59:15 Patti -> Panelist(s) I am self-employed in MD. I have 1099s from DC and MD. However, I worked full-time (W2) in VA from Oct. 2012 – Feb. 2013. How do I file my state tax in MD? Do I need to file state tax in VA/DC as well?
Mar 21, 11:03:49 VK -> Panelist(s) I pre-submitted my question
Mar 21, 11:03:55 Patricia -> Comptroller Franchot I live in Maryland but I worked full-time in Virginia from October 17, 2012 thru February 20, 2013. How do I file my state income tax with MD? Do I also have to file in VA as well?
Comptroller Franchot -> Patricia Patricia, If you live in Maryland, file a Maryland return (502 return). You do not have to file anything with Virginia, unless they mistakenly withheld taxes from your income. In that case file with Virginia for a refund. Thank you for the question. BTW, file electronically please. Speeds up your refund. Peter
Mar 21, 11:04:29 Patti -> Panelist(s) Thank You!
Mar 21, 11:07:21 candy -> Panelist(s) I keep going to ifile to do my niece tax for free but not coming up to get started. What do I need to put in? This is her first time filing on her own and she is very low income
Mar 21, 11:09:59 Patti -> Comptroller Franchot I am self-employed in MD. I have 1099s from DC and MD. However, I worked full-time (W2) in VA from Oct. 2012 – Feb. 2013. How do I file my state tax in MD? Do I need to file state tax in VA/DC as well?
Comptroller Franchot -> Patti Patti, See the response to the previous question from Patricia. You pay taxes in the state in which you are domiciled. To the extent you have paid taxes to another jurisdiction you may be able to claim a credit on your Maryland tax return.
Mar 21, 11:12:25 Alana -> Panelist(s) I was laid off last year and can’t afford to pay what I owe right now. Should I not file until I can? I’ve never been in this situation before.
Mar 21, 11:14:00 Veronica -> Comptroller Franchot If our company is based in Maryland and we have an employee working in Florida, should the employee be subject to Maryland state taxes? Also, if the employee worked part of the year here in Maryland and the other part in Florida, should all of the wages and withholding be subject to Maryland or just the wages?
Comptroller Franchot -> Veronica Veronica, If the employee works in Florida, then no withholding would be required unless they are a Maryland resident. If it is a Maryland company, then the company should withhold for the time the employee worked in Maryland. Good question, Almost had me stumped. Thanks, Peter
Mar 21, 11:15:57 Marshall -> Panelist(s) Hello Mr. Franchot. I already filed my taxes, but it turns out I made an error that the IRS caught, in my favor fortunately so I got a bigger federal return. But since I already got my return from the state, will that automatically be adjusted or do I have to contact you to fix it?
Mar 21, 11:16:56 candy -> Comptroller Franchot I keep going to ifile to do my niece’s tax for free but not coming up to get started. What do I need to put in? This is her first time filing on her own and she is very low income.
Comptroller Franchot -> candy Candy, Hard to answer your question without more information. Call Karen Scheerer, my taxpayer ombudsman at 410 260-4020. Tell her the comptroller referred you! Peter
Mar 21, 11:17:21 nique -> Panelist(s) hello is there any way that i can print out a Maryland W2 form for my current job?
Mar 21, 11:17:53 RedskinsGirl -> Panelist(s) To be eligible for free tax prep help from your office, what’s the income limit?
Mar 21, 11:18:05 Glenn -> Panelist(s) Has my estimated taxes for 2013 been established?
Mar 21, 11:21:14 candy -> Panelist(s) THANKS I will call in just a few minutes. HAVE A GREAT DAY !!
Mar 21, 11:21:16 Alana -> Comptroller Franchot I was laid off last year and can’t afford to pay what I owe right now. Should I not file until I can? I’ve never been in this situation before.
Comptroller Franchot -> Alana Alana, Sorry about being laid off. These are tough economic time for far too many Marylanders. Definitely file by April 15. We will work with you for a reasonable payment plan likely free from penalties. We are on your side. For more information call 410 974-2432, and once again mention my name. Peter
Mar 21, 11:22:44 Coffeeroll -> Panelist(s) Hi! I have a sales and use tax question: I’m based in Maryland and it’s primarily where I sell artwork. But if I wanted to do a show in Philadelphia would I collect sales tax for Maryland, Philly or both?
Mar 21, 11:24:22 RedskinsGirl -> Comptroller Franchot To be eligible for free tax prep help from your office, what’s the income limit?
Comptroller Franchot -> RedskinsGirl I like your user name. Go Redskins! There is no income limit. We aspire to help all Marylanders, regardless of income. No questions asked. For more information about branch offices and hours of operation, please visit www.marylandtaxes.com. Good question. Peter
Mar 21, 11:25:40 Max -> Panelist(s) Does a person on Medicaid pay MD state taxes? The person is 77 years old.
Mar 21, 11:28:44 Jim_H -> Panelist(s) When or where can I get form and info to declare and pay
Mar 21, 11:28:49 Marshall -> Comptroller Franchot Hello Mr. Franchot. I already filed my taxes, but it turns out I made an error that the IRS caught, in my favor fortunately so I got a bigger federal return. But since I already got my return from the state, will that automatically be adjusted or do I have to contact you to fix it?
Comptroller Franchot -> Marshall Marshall, Generally, it is better to file an amended state return within 90 days (Form 502X, available on website). You will get a quicker resolution to any appropriate state refund. Peter
Mar 21, 11:29:44 Jim_H -> Panelist(s) When and where can I get forms and info to pay 2013 estimated tax?
Mar 21, 11:31:42 OC -> Panelist(s) My son had his first summer job as a waiter, but didn’t keep track of his tips. How do I know what his income really was?
Mar 21, 11:32:04 Max -> Comptroller Franchot Does a person on Medicaid pay MD state taxes? The person is 77 years old.
Comptroller Franchot -> Max Max, It depends on the income level of the taxpayer. Generally speaking, less than $11,200 income for someone over 65 means they do not have to file a state return, regardless of medicare or medicaid. Peter
Mar 21, 11:32:38 Natitude -> Panelist(s) I have an odd question. I know for a fact that my sister has committed tax fraud, but just hasn’t gotten caught. Who should I contact about it or should I just hope the system catches her? Will it catch her?
Mar 21, 11:33:45 Coffeeroll -> Comptroller Franchot Hi! I have a sales and use tax question: I’m based in Maryland and it’s primarily where I sell artwork. But if I wanted to do a show in Philadelphia would I collect sales tax for Maryland, Philly or both?
Comptroller Franchot -> Coffeeroll Coffeeroll, No. Good luck. I hope you do well. Peter
Mar 21, 11:36:01 Grace -> Panelist(s) I have heard a lot in the news lately about all of the cigarettes being smuggled through Maryland and your call to increase penalities. Why do you care about this issue?
Mar 21, 11:37:03 Comptroller Franchot -> Everyone BTW, Coffeeroll, you may need to register with appropriate tax administration in Pennsylvania and collect appropriate sales tax, You do not have to collect sales tax for Maryland. Peter
Mar 21, 11:40:03 GaryS -> Panelist(s) my ex-wife is illegally claiming our two kids (4 and 7) on her taxes but they live full-time with me. if i file after she does, will the state see they have been claimed twice and what should i do?
Mar 21, 11:41:09 OC -> Comptroller Franchot My son had his first summer job as a waiter, but didn’t keep track of his tips. How do I know what his income really was?
Comptroller Franchot -> OC OC, Tips are reported as income. Estimate the tips to the best of his ability and make sure the employer did not estimate tips on his W-2. Good luck. Glad he was working at a job. Looking forward to visiting Ocean City this summer. Peter
Mar 21, 11:45:06 Grace -> Comptroller Franchot I have heard a lot in the news lately about all of the cigarettes being smuggled through Maryland and your call to increase penalities. Why do you care about this issue?
Comptroller Franchot -> Grace Grace, Thank you for the question, We are facing an epidemic of cigarette smuggling because the penalties are light and profits huge. The state of Maryland is losing tax revenue, small businesses are unable to compete fairly, and underage Marylanders are getting access to cigarettes. I hope the legislation passes this year to increase the fines and jail sentences for cigarette smuggling. Peter
Mar 21, 11:46:44 -> Panelist(s) Can businesses decide on their own to charge an Obamacare tax?
Mar 21, 11:46:56 Jim_H -> Comptroller Franchot When and where can I get forms and info to pay 2013 estimated tax?
Comptroller Franchot -> Jim_H Jim H. The estimated tax forms are available on our website www.marylandtaxes.com. Thanks for the question. Peter
Mar 21, 11:48:56 Glenn -> Comptroller Franchot Has my estimated taxes for 2013 been established?
Comptroller Franchot -> Glenn Glenn, Call 1 800 MDTaxes tollfree to find out the status of your individual account. Peter
Mar 21, 11:50:39 Prissy -> Panelist(s) Good afternoon Comptroller Franchot. I’m a Navy sailor stationed in Maryland, and I live on the eastern shore. My home was damaged from Sandy, are there any deductions that I’d qualify for as a Marylander in the military.
Mar 21, 11:52:40 Natitude -> Comptroller Franchot I have an odd question. I know for a fact that my sister has committed tax fraud, but just hasn’t gotten caught. Who should I contact about it or should I just hope the system catches her? Will it catch her?
Comptroller Franchot -> Natitude Natitude, Those must be interesting Thanksgiving dinners. Seriously, the hotline number is 410 767-1325. Good luck. Peter
Mar 21, 11:53:45 VK -> Panelist(s) Hi this Veronica again. If the person who worked in Maryland for part of the year and then had MD withholding stopped because they moved and began performing services in Florida, should the wages still be reportable to Maryland even though the withholding has stopped since Florida does not have a state tax?
Mar 21, 11:55:05 Connor -> Panelist(s) As a Towson alum, I’m appalled that the administration got rid of baseball and soccer in such a disrespectful way. Thank you for bringing this issue to the public’s attention and calling for the president to come to Annapolis. Do you think there is hope that the sports might come back to TU?
Mar 21, 11:56:03 Prissy -> Comptroller Franchot Good afternoon Comptroller Franchot. I’m a Navy sailor stationed in Maryland, and I live on the eastern shore. My home was damaged from Sandy, are there any deductions that I’d qualify for as a Marylander in the military.
Comptroller Franchot -> Prissy Prissy, As a fellow veteran, thank you for your service. Sorry about your home….. any casualty losses permitted on the federal return will flow through to your Maryland return. Peter
Mar 21, 11:56:06 towson_baseball_mom -> Panelist(s) I really don’t have a question but i wanted to thank you for your support of our Student athletes. I am doing my sons for the first time. Thank You.
Mar 21, 12:05:04 Comptroller Franchot -> Everyone We are concluding now but will answer all remaining questions on taxes. We received several questions and comments about Towson soccer and baseall teams. I remain angry and troubled by the decision to discontinue these programs and the manner in which it was handled. It is a disservice to these talented student athletes and their families and harms a great school, Towson. On April 3 at 10 AM in Annapolis there will be a meeting of the Board of Public Works. The Governor and I asked that the President of Towson attend and answer all questions. The meeting is open to the public. Feel free to attend and speak up
Mar 21, 12:19:17 Tax Chat Moderator -> Everyone Thanks again for joining us this afternoon. On behalf of the Comptroller, we appreciate you being one of the vast majority of Marylanders who do the right thing and pay your taxes on time. As always, we’re here to serve you so please don’t hesitate to visit our website at www.marylandtaxes.com or email mdtaxhelp@comp.state.md.us.

Comptroller Agents Seize More Than $500,000 in Contraband Cigarettes in Month of January

- 22 Cigarette Smugglers Arrested; 150% Increase in Seizures Over January 2012 - 

Annapolis, MD (January 31, 2013)Comptroller Peter Franchot announced today that agents from his Field Enforcement Division arrested 22 suspects and confiscated more than 82,000 packs of contraband cigarettes in the month of January, representing a 69 percent increase in the amount of arrests and a 150 percent increase in seized contraband for the same time last year. The most recent arrests were made today, in Worcester County with agents seizing 6,500 packs of illegal cigarettes valued at $42,000.

“My agents work tirelessly with the Maryland State Police, Maryland Transportation Authority Police, Northern Virginia Cigarette Tax Board and Virginia’s Attorney General to aggressively crack down on cigarette smuggling and other illegal tax evasion tactics. But as the growing incidents of smuggling show, harsher penalties are needed to prevent this activity. My field enforcement division will continue to partner with other law enforcement agencies to keep contraband cigarettes out of Maryland,” said Comptroller Franchot.

The arrests were made in Baltimore, Cecil, Howard, Prince George’s, Somerset, Washington, Wicomico and Worcester Counties and Baltimore City. All of the suspects have been charged with Transporting Contraband Cigarettes and Possession of Contraband Cigarettes in the State of Maryland. The transporting charge is a felony, which carries a $50 per carton fine and/or two-year imprisonment sentence. The possession offense is a misdemeanor, carrying a $1,000 fine and/or imprisonment, not exceeding one year. The numbers of cigarette violations have risen steadily for the past few years with Fiscal year 2011 netting 115 violations and cigarettes confiscated valued at $1.1 million. In Fiscal year 2012, agents arrested 220 people and seized more than $2.3 million in contraband.

“I am pushing hard again this year for passage of Senate Bill 69, which would implement harsher penalties and allow for stricter enforcement for these crimes throughout Maryland. Cigarette smuggling has become more and more lucrative. In fact it’s become more profitable than smuggling drugs or guns,” continued Comptroller Franchot, “We are arresting many repeat offenders because the current penalties are no more than a slap on the wrist. Stronger repercussions need to be implemented so smugglers know that these crimes won’t be tolerated in Maryland.”

The legislation, heard yesterday in the Senate’s Budget and Taxation Committee, calls for a $150 fine for a first offense and up to a $300 fine for a subsequent offense. Additionally, the smuggler may be subject to imprisonment for up to two years. For more information on the bill, visit http://mgaleg.maryland.gov/webmga/frmMain.aspx?pid=billpage&stab=01&id=SB0069&tab=subject3&ys=2013RS.

MEDIA CONTACT: Kim Frum, 410-260-7210 (office), 443-949-1583 (cell)

Comptroller Warns Taxpayers of New Estate Tax Scheme

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- Fraudulent Notices Aimed at Collecting Money from Estate Representatives -

Annapolis, MD (January 30, 2013)Comptroller Peter Franchot warned Marylanders today of an emerging scam involving fraudulent notices to estate tax filers from a company alleging to be a collections firm working for the agency.

The letters, from a business claiming to be based in Annapolis named IRFS, are being sent to personal representatives of estates. The notices indicate that the estate filed delinquently and owes unpaid tax and interest. The correspondence also provides payment coupons for the alleged liability. The Comptroller’s Office was notified about the scheme by an attorney representing an estate.

“This scam is an example of unscrupulous individuals preying on people when they are most vulnerable, after the death of a loved one,” said Comptroller Franchot. “The Comptroller’s Office does not use outside collections agencies for settling estate tax liabilities.”

The fraudulent notices also advise the representative to obtain a loan or other financing to pay off the outstanding balance or a lien will be placed on the taxpayer’s bank account as well as garnishment of wages. A phone number linked to a voicemail box is listed on the letter for taxpayers to contact.

“I urge any taxpayer who receives a notice like this one or any correspondence that you are unsure of to contact my taxpayer service office immediately at 1-800-MD-TAXES or by email at taxhelp@comp.state.md.us.”

The Comptroller has created a consumer protection guide designed to educate taxpayers
on how to select a tax preparer, their rights and what they can expect when filing a return. Visit Basic Rights for All Taxpayers for a copy of this guide.

MEDIA CONTACT: Christine Feldmann, 410-260-6346 (office), 443-336-0215 (cell)

Comptroller Celebrates “National EITC Day”

- Tax Credit Returns Millions of Dollars to Hardworking Families Each Year -

Annapolis, MD (January 25, 2013)As the tax season begins, Comptroller Peter Franchot today celebrated the 7th Annual National Earned Income Tax Credit Day by reiterating his goal of raising awareness of what he calls “the most effective anti-poverty tool” available to taxpayers. He marked the occasion earlier today by speaking at the Prince George’s CASH Campaign Kickoff.

“The Earned Income Tax Credit (EITC) is the most effective tax credit available to help lift people out of poverty,” said Comptroller Franchot. “Behind the numbers, these are parents and children receiving a better life in Maryland because of the Earned Income Tax Credit. But working families must apply for the credit in order to receive the benefit. I am grateful to work with partners such as the Maryland CASH Campaign, new emerging financial literacy coalitions and Volunteer Income Tax Assistance (VITA) centers throughout the state to provide free tax preparation services for those in need and to promote the EITC to those who qualify.”

“Many taxpayers eligible to receive EITC don’t receive them,” commented Robin McKinney, Director of the Maryland CASH Campaign. “The Maryland CASH Campaign and our partners help eligible taxpayers find all the refunds they deserve. Not getting what you are due is not acceptable. Our goal is boost the financial well-being of hard-working Marylanders by preparing and filing their tax returns for free while providing ways to increase wealth such as purchasing US Savings Bonds with part of the refund.”

The EITC is a significant tool for combating poverty and helping working families in Maryland move toward financial self-sufficiency. Nationally, EITC returns billions of dollars to millions of working families, helping to lift them out of poverty.

This credit distributes more money than either Temporary Assistance for Needy Families (TANF) or the Supplemental Nutrition Assistance Program and, in combination with the Child Tax Credit, is almost as much as both these programs combined. The EITC supports community and workforce development initiatives.

Comptroller Franchot, alongside other financial literacy advocates, is currently working to ensure that all eligible Marylanders know about the EITC and know how to claim it. The agency provided all employers in the state with the maximum income eligibility for the state earned income tax credit and employers are required to alert an employee who may be eligible for the federal and Maryland EITC. Employees may be entitled to claim an EITC on their 2012 federal and Maryland income tax returns if both their federal adjusted gross income and their earned income is less than the following:

• $45,060 ($50,270 for married filing jointly) if they have three or more qualifying children,
• $41,952 ($47,162 for married filing jointly) if they have two qualifying children,
• $36,920 ($42,130 for married filing jointly) if they have one qualifying child, or
• •$13,980 ($19,190 for married filing jointly) if they do not have a qualifying child.

The Comptroller’s Office offers free tax preparation assistance for Maryland returns at each of its 12 branches offices throughout the state. Locations of offices can be found online at www.marylandtaxes.com. Taxpayers who have questions about their taxes can also contact a representative at 410-260-7980 or 1-800-MD-TAXES.

“I am firmly committed to helping every qualifying Marylander take advantage of the EITC,” said Comptroller Franchot. “I want to thank the organizations and volunteers throughout Maryland who work hard to help qualifying Marylanders receive this tax credit they desperately need.”

Comptroller Franchot also urged all Marylanders to file electronically this year to help the state save money on processing returns and, most importantly, to ensure that Marylanders get their refunds quickly. Taxpayers filing electronically can expect to get their refunds within a few days while those submitting paper returns should plan to wait several weeks for their refund checks.

“This year, I am urging every taxpayer who is able to file electronically. Not only is it more secure for taxpayers and save the state money, but taxpayers who file electronically can expect their refunds within a few days,” said Comptroller Franchot.

MEDIA CONTACT: Caron Brace, (410) 260-7438(office), (410) 212-9414 (cell)

New Year, New Tax Information; Helpful Filing Tips from Maryland Comptroller Peter Franchot

- Tax Filing Deadline is Monday, April 15, 2013 -

Annapolis, MD (January 24, 2013)The new year is here and just as consumers are getting used to writing 2013 on checks, it’s time to start thinking about tax season. Comptroller Peter Franchot shared some important information today to assist taxpayers in completing their personal income tax returns.

This year the Internal Revenue Service (IRS) has pushed back the start date for filing personal current-year tax returns to January 30, and Maryland is following suit. Neither paper nor electronic returns will be processed prior to that date. The filing deadline for 2012 tax returns is Monday, April 15.

“We have less than three months until the April 15 tax filing deadline and my agency is available to help any taxpayer with questions or problems,” said Comptroller Franchot. “I’m very proud of the work my staff does to help taxpayers year round, but especially during tax season. My agency makes filing state taxes as easy as possible by offering forms online and providing free help and e-filing at any of the 12 branch offices.”

There are a few changes and tips for filing 2012 returns:

• Tax Booklets – Tax booklets, forms and instructions are available from the Comptroller’s Website at http://taxes.marylandtaxes.com/Resource_Library/default.shtml. Taxpayers can find a limited supply of 2012 tax booklets at various libraries throughout the state, as well as at any of the Comptroller’s branch offices. Taxpayers may also request a tax booklet by calling (410) 260-7951 or by email to taxforms@comp.state.md.us .

• Hours – Branch offices will be open from 8:30 a.m. to 4:30 p.m., Monday through Friday, including Presidents’ Day (February 18). Offices will also have extended hours on Saturday, April 13, from 9 a.m. to 1 p.m. and from 8 a.m. to 7 p.m. on April 15, to help taxpayers fill out and electronically file their tax forms for free.

• Libraries and Post Offices – The Comptroller’s Office no longer supplies all local post offices with tax booklets. We have sent a limited supply of tax booklets to requesting libraries.

• What is needed to file – Before taxpayers file a Maryland income tax return, they are required to complete a federal income tax return. Often the same documentation required to complete the federal income tax return is also required to complete the Maryland return. Additionally, supporting documentation for Maryland credits and modifications may be necessary for preparing the Maryland return. For more information on credits, modifications and necessary documentation please go to Individual Tax Forms and Instructions.

• Discarding old returns – Generally, taxpayers should keep tax records for at least three years from the date of filing a return or filing deadline, whichever is later.

• New Income Tax Rates – The Maryland General Assembly has approved new income tax rates and rate brackets for individuals for all tax years beginning after December 31, 2011. See Instruction 17 in the resident tax booklet for the new tax rate schedules.

• Local Tax Rate Changes – For tax year 2012, Anne Arundel County has decreased its local tax rate to 2.49% and Queen Anne’s County has increased its local tax rate to 3.20%. For tax year 2013, Anne Arundel County has increased its local tax rate back to 2.56%; Talbot County has increased its rate to 2.40%; and Wicomico Count has increased its rate to 3.20%.

• Personal Exemption Amount – The exemption amount of $3,200 begins to be phased out if a taxpayer’s federal adjusted gross income is more than $100,000 ($150,000 for joint taxpayers). The $3,200 exemption is phased out entirely when the income exceeds $150,000 ($200,000 for joint taxpayers). See Instruction 10 in the Resident tax booklet for the reduced amounts. The additional exemption of $1,000 remains the same for age and blindness.

• Dependent Form 502B – This form will be required to be attached to Form 502, Form 505 and Form 515 to determine what exemptions a taxpayer is entitled to claim. Taxpayers claiming more than two dependents on Form 503 must use Form 502.

• Increased pension exclusion – Maryland’s maximum pension exclusion, which is available to qualifying taxpayers 65 or older, increased from $26,300 to $27,100 for tax year 2012.

• Earned Income Tax Credit – Effective January 1, 2012, the Comptroller is required to publish the maximum income eligibility for the state earned income tax credit (EITC) on or before January 1 of each year. The Comptroller shall also notify the employers of such information, and the employers must notify each employee who may be eligible.

• Subtraction Modifications – There are three new subtraction modifications created by the Maryland General Assembly for tax year 2012:

o Gain resulting from a payment from the Maryland Department of Transportation as a result of the acquisition of a portion of the property on which your principal residence is located,

o Qualified conservation program expenses up to $500 for an application approved by the Department of Natural Resources to enter into a Forest Conservation and Management Plan,

o Payment received as a result of a foreclosure settlement negotiated by the Maryland Attorney General.

• Farmers and Fishermen – The Comptroller will recognize the federal extension of the due date of the fourth quarter 2012 estimated tax payment from March 1, 2013 to April 15, 2013 for farmers and fishermen.

“In the interest of saving taxpayer money, and helping the environment, I always encourage every taxpayer to electronically file their returns,” said the Comptroller. “E-filing guarantees a faster refund than sending it through the mail. Plus, it saves Maryland nearly $2 in processing costs. Since its inception in 1990, e-filing has saved the state nearly $26.5 million in processing returns overall. As always, each of the 12 branch offices throughout the state will assist you in completing and filing your tax return for free.”

For more information on the IRS pushing back the filing start date, please visit http://www.irs.gov/uac/Newsroom/IRS-Plans-Jan.-30-Tax-Season-Opening-For-1040-Filers. For more information on filing Maryland taxes, please visit What’s New for the Tax Filing Season or call 1-800-MD-TAXES.

MEDIA CONTACT: Kim Frum, (410) 260-7210 (office), (443) 949-1583 (cell)

Maryland Farmers and Fishermen Receive Penalty Relief on Taxes

- Late IRS Start up May Cause Delay for Farmers and Fishermen Filing Taxes -

Annapolis, MD (January 24, 2013)Comptroller Franchot announced penalty relief today for Maryland farmers and fishermen who may be forced to file estimated payments late because of this year’s delayed start to the tax season. Following the Internal Revenue Service (IRS), current-year personal income tax returns are not being accepted or processed until January 30.

Farmers and fishermen are expected to pay their 2012 taxes by March 1, and missing the deadline typically results in interest penalties due for an underpayment of estimated taxes. Maryland and the IRS are providing relief from the interest penalties and pushing back the deadline to April 15.

The recent enactment of the American Taxpayer Relief Act (ATRA) by the federal government caused the delay in filing returns and several federal tax forms often filed by farmers and fishermen were also impacted. According to the IRS, the extensive programming and required testing of IRS systems will delay their ability to accept and process these forms.

“My office is committed to working with both farmers and fishermen impacted by this change, as well as the IRS, to ensure that taxes are filed properly and that no one is adversely affected by the changes,” said Comptroller Franchot.

Since Maryland generally follows IRS regulations, the federal changes necessitate the Comptroller’s Office take similar action, so as not to cause unnecessary hardship for impacted taxpayers.

Normally, if the gross income of farmers or fishermen is at least two-thirds of their total estimated gross estimated income for the year, the 2012 declaration and full payment of the estimated tax is due on or before January 15, 2013. In light of the delayed start to the tax season, a farmer or fisherman may elect to file a complete annual return on or before April 15, 2013 and make full payment of the tax at that time.

If a farmer or fisherman fails to file and pay the tax due with the final return by April 15, and the income is not subject to withholding or not enough Maryland tax is withheld, the taxpayer would be subject to interest charges. To compute the applicable interest charge, complete lines 1 through 10 of Form 502UP. Enter the amount from line 10 on line 13, column 4 and complete the rest of Form 502UP. Only column 4 will have entries.

To claim exemption from the interest charge for underpayment of estimated tax or to use the special calculation, enter code number 300 in one of the boxes marked “code numbers” to the right of the telephone number area on Form 502 or 505. Attach Form 502UP to the Maryland tax return if the special calculation is used.

For more information on the IRS pushing back the filing start date, please visit http://www.irs.gov/uac/Newsroom/IRS-Plans-Jan.-30-Tax-Season-Opening-For-1040-Filers. For more information on filing Maryland taxes, please visit What’s New for the Tax Filing Season or call 1-800-MD-TAXES.

MEDIA CONTACT: Kim Frum, (410) 260-7210 (office), (443) 949-1583 (cell)

New Year, New Tax Information; Helpful Filing Tips from Maryland Comptroller Peter Franchot

- Tax Filing Deadline is Monday, April 15, 2013 -

Annapolis, MD (January 22, 2013)The new year is here and just as consumers are getting used to writing 2013 on checks, it’s time to start thinking about tax season. Comptroller Peter Franchot shared some important information today to assist taxpayers in completing their personal income tax returns.

This year the Internal Revenue Service (IRS) has pushed back the start date for filing personal current-year tax returns to January 30, and Maryland is following suit. Neither paper nor electronic returns will be processed prior to that date. The filing deadline for 2012 tax returns is Monday, April 15.

“We have less than three months until the April 15 tax filing deadline and my agency is available to help any taxpayer with questions or problems,” said Comptroller Franchot. “I’m very proud of the work my staff does to help taxpayers year round, but especially during tax season. My agency makes filing state taxes as easy as possible by offering forms online and providing free help and e-filing at any of the 12 branch offices.”

There are a few changes and tips for filing 2012 returns:
• Tax Booklets – Tax booklets will not be mailed in 2013. Taxpayers may file electronically or print the tax booklet and forms from the agency’s Website or contact the nearest branch office for assistance.
• Extended Hours – Branch offices will have extended hours to help taxpayers fill out and electronically file their tax forms for free.
• Libraries and Post Offices – The Comptroller’s Office no longer supplies local post offices and libraries with tax booklets. Each library receives a CD Rom of all forms if requested.
• What is needed to file – Before taxpayers file a Maryland income tax return, they are required to complete a federal income tax return. Often the same documentation required to complete the federal income tax return is also required to complete the Maryland return. Additionally, supporting documentation for Maryland credits and modifications may also be necessary for preparing the Maryland return. Click here for more information on credits, modifications and necessary documentation.
• Discarding old returns – Generally, taxpayers should keep tax records for at least three years from the date of filing a return or filing deadline, whichever is later.
• New Income Tax Rates – The Maryland General Assembly has approved new income tax rates and rate brackets for individuals for all tax years beginning after December 31, 2011. See Instruction 17 in the resident tax booklet for the new tax rate schedules, or click here for an overview.
• Local Tax Rate Increase – For tax year 2012, Anne Arundel County has decreased their local tax rate to 2.49% and Queen Anne’s County has increased their local tax rate to 3.20%. Please note the change on Form 502D.
• Personal Exemption Amount – The exemption amount of $3,200 begins to be reduced if your federal adjusted gross income is more than $100,000 ($150,000 for joint taxpayers). The $3,200 exemption is phased out entirely when the income exceeds $150,000 ($200,000 for joint taxpayers). See Instruction 10 in the Resident tax booklet for the reduced amounts. The additional exemption of $1,000 remains the same for age and blindness.
• Dependent Form 502B – This form will be required to be attached to Form 502, Form 505 and Form 515 to determine what exemptions you are entitled to claim. Taxpayers claiming more than 2 dependents on Form 503 must use Form 502.
• Increased pension exclusion – Maryland’s maximum pension exclusion, which is available to qualifying taxpayers 65 or older, increased from $26,300 to $27,100 for tax year 2012.
• Earned Income Tax Credit – Effective January 1, 2012, the Comptroller is required to publish the maximum income eligibility for the state earned income tax credit (EITC) on or before January 1 of each year. The Comptroller shall also notify the employers of such information, and the employers must notify each employee who may be eligible.
• Subtraction Modifications – There are three new subtraction modifications created by the Maryland General Assembly for tax year 2012:
o Gain resulting from a payment from the Maryland Department of Transportation as a result of the acquisition of a portion of the property on which your principal residence is located,
o Qualified conservation program expenses up to $500 for an application approved by the Department of Natural Resources to enter into a Forest Conservation and Management Plan,
o Payment received as a result of a foreclosure settlement negotiated by the Maryland Attorney General.

“In the interest of saving taxpayer money, and helping the environment, I always encourage every taxpayer to electronically file their returns,” said the Comptroller. “E-filing guarantees a faster refund than sending it through the mail. Plus, it saves Maryland nearly $2 in processing costs. Since its inception in 1990, e-filing has saved the state nearly $26.5 million in processing returns overall. As always, there will be extended hours for each of the 12 branch offices throughout the state to assist you in completing and filing your tax return for free.”

For more information on the IRS pushing back the filing start date, please visit http://www.irs.gov/uac/Newsroom/IRS-Plans-Jan.-30-Tax-Season-Opening-For-1040-Filers. For more information on filing Maryland taxes, please visit What’s New for the Tax Filing Season or call 1-800-MD-TAXES.

MEDIA CONTACT: Kim Frum, (410) 260-7210 (office), (443) 949-1583 (cell)

Comptroller Reminds Marylanders to Shop Maryland Energy, February 16-18

- Six Percent Sales Tax Waived on Qualifying ENERGY STAR Products-

Annapolis, MD (January 16, 2013)Comptroller Peter Franchot today reminded Marylanders to take advantage of Shop Maryland Energy, a tax-free weekend on select ENERGY STAR products. Beginning on Saturday, February 16 at 12:01 a.m. and ending on Monday, February 18 at 11:59 p.m., Marylanders will not pay the six percent state sales tax on qualifying ENERGY STAR product purchases.

Resulting from legislation passed in the 2007 special session of the Maryland General Assembly, this tax-free weekend is scheduled for the Saturday immediately preceding the third Monday in February until the third Monday of February. This annual tax holiday will occur in perpetuity until the legislature decides to revisit the issue.

“This annual event allows consumers who purchase ENERGY STAR products to save money on the initial purchase and future energy bills, while simultaneously benefitting Maryland retailers with a boost in sales,” said Comptroller Franchot.

During Shop Maryland Energy, air conditioners, clothes washers, furnaces, heat pumps, standard size refrigerators, compact fluorescent light bulbs (CFL), dehumidifiers and programmable thermostats that have been designated as meeting or exceeding the applicable ENERGY STAR efficiency requirements developed by the U.S. Environmental Protection Agency and the U.S. Department of Energy will be tax-free.

“This weekend provides consumers with a win-win,” said Patrick Donoho, president, Maryland Retailers Association. “Consumers will save money by not paying the sales tax on qualified appliances and savings on future energy costs while helping the environment with more energy efficient appliances.”

The ENERGY STAR label was established to reduce greenhouse gas emissions and other pollutants caused by the inefficient use of energy. The label makes it easier for consumers to identify energy-efficient products that offer savings on energy bills without sacrificing performance, features, and comfort. A list of ENERGY STAR items may be found at: www.energystar.gov. For more information, visit the Comptroller of Maryland’s Web site, www.marylandtaxes.com, e-mail shopmaryland@comp.state.md.us, or call 410-260-7980 in Central Maryland, or toll-free, 1-800-MD-TAXES.

MEDIA CONTACT: Caron Brace, (410) 260-7438 (office), (410) 212-9414 (cell)

Media Contacts

Communications Office Main Number - 410-260-7300 (media calls only)

If you are a member of the media and need to contact someone in the agency’s communications office, please call or email one of the following individuals:

Peter Hamm, Director
410-260-7060
phamm@comp.state.md.us 

Alan Brody Press Secretary
410-260-6346
abrody@comp.state.md.us

Barbara Sauers, Deputy Press Secretary
410-260-7438
bsauers@comp.state.md.us

Vicki Fisher, Media Relations Specialist
410-260-7816
vfisher@comp.state.md.us

If you are a taxpayer with a tax related question please call:
410-260-7980 or email taxhelp@comp.state.md.us