The Wynnes Win! Does Maryland Owe You a Refund?

The Wynnes Win! Does Maryland Owe You a Refund?

iStock_000013732170XSmall_Justice_statueDo you feel like you’ve been paying too much in income tax? Maybe you have! On May 18, 2015 the US Supreme Court ruled, in the Wynne Case (Comptroller v. Wynne), that a portion of Maryland’s income tax law was unconstitutional. The state will be required to issue refunds to some taxpayers.

The issue the court addressed was how Maryland gives credit to residents for taxes paid to other states on income earned outside of Maryland. In general, you’re allowed to take a credit against your Maryland income tax for tax paid to other states. This credit is limited to the amount of state income tax that would have been due on the same amount of income in Maryland. However, the way in which Maryland calculates the tax is a bit tricky and according to the Supreme Court, it was short changing taxpayers.

Maryland’s income tax is broken up into two parts:

1. State Income Tax: The state portion tops out at 5.75%
2. County Income Tax: The county tax rate can be as much as 3.2% (depending on where you live).

In determining the amount of credit that was allowed for taxes paid to other states, Maryland was only allowing a credit related to the state portion (up to 5.75%). This meant that taxpayers, like the Wynnes, who had income in other high-tax states, would have to pay the full tax to the other state as well as the county tax in Maryland.

As a result of the Supreme Court decision in the Wynne Case, the Maryland government will be required to issue a refund if you’re in this multi-state situation and either a protective claim was filed or if you file an amended return. If you are a Maryland resident, and have income from other states, it’s time to call your CPA and find out if Maryland owes you a refund.

Tim StolzUpdate Provided By: Tim Stolz, CPA MKS&H Tax Manager

About MKS&H: McLean, Koehler, Sparks & Hammond (MKS&H) is a professional service firm with offices in Hunt Valley and Frederick. MKS&H helps owners and organizational leaders become more successful by putting complex financial data into truly meaningful context. But deeper than dollars and data, our focus is on developing an understanding of you, your culture and your business goals. This approach enables our clients to achieve their greatest potential.

Like what you read? Sign-up for our C-Suite Spotlight Program.

About Author


MKS&H is committed to providing personalized tax and accounting services while developing a deep understanding of you, your culture, and your business goals. Our full view of financial systems and the people behind them allow us create and evolve the best solution that will help you and your business thrive. The accounting experts and consulting professionals at MKS&H work together to help you achieve the financial results you want.

Related posts

What Exactly is an IRS Audit?

When it comes to taxes, the Internal Revenue Service (IRS) plays a crucial role in collecting revenue for the government. One of the ways the IRS ensures compliance with tax laws is through audits. The term “audit” can evoke fear and uncertainty in the minds of taxpayers but understanding...

Read More

The Tax Implications of Remote Work

Working remotely is becoming an increasingly popular option for people who want to have more control over their work-life balance. But there are a few things you should know about the tax implications of working from home before making the switch. Remote Work and Taxes When it comes to...

Read More