You can learn quite a bit about the state’s withholding form requirements and still not encounter one of the first forms that you will need to set up your Maryland payroll: Form MW-507. It is the worksheet form that your employee will need to fill out so that you can calculate the estimated income tax to withhold from the employee’s paycheck based on their personal exemptions.
Why Maryland Employers Need Form MW-507
Much like the rest of the Maryland income tax withholding, Form MW-507 is similar to the federal exemptions worksheet Form W-4. Most employers find that it makes a lot of sense to give their employees both forms at the same time. Using the adjusted gross income and filing status of the household (single, married filing separately, married filing jointly) is pretty much exactly the same.
That said, there are some notable differences. Due to the state’s unique geography, it is not uncommon for people to work in Maryland but live in a different state. One of the exemptions that an employee may claim is Box 4, which certifies that the employee is domiciled in:
- The District of Columbia
- Pennsylvania
- Virginia
- West Virginia
Note: Simply having a residence in another state is not sufficient to make an exemption if you maintained a “place of abode” in Maryland for 183 days or more. MW-507 is additionally useful for employees to declare exemptions from withholding.
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What is a Maryland Employer’s Responsibility?
When an employee provides you with a MW-507 form, you must retain the certificate with your records. If you suspect that anything is wrong with the MW-507, you are required to submit a copy of the certificate with all accompanying attachments to the Compliance Division of the Compliance Programs Section.
Though we have several resources for where to send your necessary forms, we have included the address below for your convenience.
Compliance Division, Compliance Programs Section
301 West Preston Street
Baltimore, MD 21201
You must fulfill the above requirement if the following criteria are met:
- You believe the certificate is incorrect
- The employee has claimed more than 10 exemptions
- The employee claims an exemption because they had no tax liability for the preceding year, expects no tax liability this year, and wages are expected to exceed $200 each week
- The employee claims their exemption from withholding based on non-residence
- The employee claims their exemption under the Military Spouses Residency Relief Act
The Compliance Division will make a determination and notify you should any change be made to the form. If any certificate is revoked by the state Comptroller, you must send new certificates from the employees to the Comptroller before implementing them.
Frequently Asked Questions
- Is 1099 software more than downloadable 1099 forms? – Absolutely. The most thorough and trustworthy 1099 software is not a one-tool wonder but can help you input data into form-specific entry screens while automatically saving sensitive data.
- Are all state forms available on tax software? – The best thing that you can do before you purchase new software is check the forms that it supports. Even when you do not need certain forms right now, you may find that you will need them later.
Get Filing Support from AMS
An informal worksheet like MW-507 does not require software support on its own, but the information on the form can be used to customize your Maryland payroll system. Utilizing Advanced Micro Solutions Payroll Software is also a good resource when it is time to:
- Calculate
- Withhold
- Report
- And deposit your employees’ income tax withholding
AMS Payroll will help you prepare and file your UI Forms 15 and 16, while our Forms Filer Plus module will handle your MW-506 and MW-508 forms. Download a free 1099-etc Demo software today and get started.
This article was updated on Feb. 20, 2026 to keep its information as fresh as possible. We update this article every six months, before and after tax season, to keep current with any changes.
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