The Maryland withholding tables will not be changed for wages paid on and after January 1, 2016. However, the state has added one new withholding table: 1.75%, which is reproduced in this Report Letter on pages 17—18. Maryland provides separate withholding tables for the convenience of employers who do not withhold using an automated or computerized system, or who prefer to look up the amounts to be withheld manually. For these tables, Maryland will continue grouping the local income tax withholding rates into rate brackets. For 2016, employers will use the same withholding brackets: 1.25%, 1.75% 2.25%, 2.40%, 2.50%, 2.60%, 2.65%, 2.80%, 2.85%, 2.90%, 3.00%, 3.05%, 3.10%, 3.15%, and 3.20% as last year, plus the new bracket.
Ann Arundel County has changed its income tax rate to 2.5% from 2.56%. Last year Anne Arundel used the 2.6% withholding tables. For 2016, Anne Arundel will use the 2.5% withholding tables. The supplemental wage rate will be 8.25%. Worcester County has changed its tax rate to 1.75% from 1.25% and thus, will use the new 1.75% withholding tables. In addition, since the Special Nonresident Tax Rate is tied to the lowest local rate, the rate increases from 1.25% to 1.75% and the new 1.75% withholding tables will be used. The supplemental wage rate for Worcester and the nonresidents will be 7.5%. All of the withholding tables are reproduced in the PAYROLL MANAGEMENT GUIDE beginning at ¶6618 through ¶6629. (Maryland Employer Withholding Guide (Updated November 2015); http://taxes.marylandtaxes.com/Business_Taxes/Business_Tax_Types/Income_Tax/Employer_Withholding/.)
Visit our News Library to read more news stories.