Maryland Form MW507 is the state’s Withholding Exemption Certificate and must be completed by all residents or employees in Maryland so your employer can withhold the correct amount from your wages. Every state, other than states with no state income tax, have a similar form. California, for example, has it’s Form DE 4.
Form MW507 is the equivalent of the W-4 that all American workers complete for federal withholding.
Filling out an MW507 is essential for proper tax filing. Still, like most tax forms, it can be intimidating because of the language used and the uncertainty of how many allowances you are entitled to. Learn more about Form MW507 so you feel more confident when filing it out at your new job or after a change in your circumstances.
What is Maryland Form MW507?
A Maryland Form MW507 is a document used in Maryland to ensure that the correct amount is withheld from an employee’s wages regarding state tax. Failure to fill out the form will result in an employer withholding taxes as if you were filing no deductions, causing you to pay more taxes than is necessary.
Example: A married man earning $125,000 forgets to file a Maryland Form MW507 with his employer. Since he did not file the form, his employer withholds taxes as if he were single. Because he forgot to file the form, $4,697.50 plus 5% of his wages over 100,000 are withheld instead of $90 plus 4.75% of his wages over 3,000, so he paid $62.50 more in taxes.
How to Fill Out Form MW507
Form MW507 is a document that gathers information about your tax status and exemptions. Filling out the form will require personal information and knowledge of any exemptions you wish to claim.
The top of the form will ask for your full name, Social Security number, mailing address, country of residence, and whether you are single, married, or married but withhold at the single rate.
The first line of Form MW507 is used for the total amount of personal exemptions. To learn how many exemptions you’re entitled to, continue to the personal exemptions worksheet section below.
Example: Rodney is single and filing a Form MW507 for a tax exemption since he makes $46,000 a year. Because he makes less than $100,000 as a single filer, he can claim a $3,200 deduction on line 1.
Line 2 is used for additional withholding. This is to ask your employer to withhold more from your paycheck if they are currently withholding too little.
Example: Marcus earns $50,000 a year at his job, which would normally require him to pay $2,322.50 ($90 plus 4.75% of the excess over $3,000). He is paid monthly, and his employer only withholds $150 per month for tax purposes. He should report on line 2 that he wants an additional $43.54 per pay period withheld to ensure his taxes are covered.
Line 3 is for exemptions from withholding if you do not expect to pay any Maryland tax. There are two reasons you can check line 3:
- Last year you did not owe any Maryland income tax and had the right to a full refund of all income tax withheld.
- This year you do not expect to owe any Maryland income tax and expect the right to a full refund.
You must enter the applicable year if both apply and write “EXEMPT” in line 3.
Example: Jessica is a student in Maryland who wants to work a campus job that would pay below the minimum filing requirements. On her form, she marks both boxes on line 3 and writes “EXEMPT.”
Line 4 is for anyone who works in the state of Maryland but has a residence in the District of Columbia, Virginia, or West Virginia. You will check the box corresponding to your residence. If you do not have a home in Maryland, write “EXEMPT” in line 4.
Example: Jackie lives in Virginia, but her company is based in Maryland and asks her to fill out Form MW507. She fills out her information, then marks the box on line 4 for Virginia and writes “EXEMPT.”
Line 5 has the same purpose as line 4, but with regards to the commonwealth of Pennsylvania. “EXEMPT” is written on this line.
Example: April works in Maryland but lives in Pennsylvania. She will need to fill out Form MW507. She will write “EXEMPT” in line 5.
Line 6 is also about living in Pennsylvania, but it is specific to the York and Adams counties. If exempt, it is written on line 4.
Example: Meredith lives in York County, Pennsylvania, but works in northern Maryland. She will write “EXEMPT” in line 6.
Some Pennsylvania districts do not impose taxes on Maryland workers. Line 7 is used to signify those workers. “EXEMPT” is written on line 4.
Example: Michael is in the Navy and is a Florida resident stationed in Maryland. Michael can write his state of residence and “EXEMPT” in line 8.
Signature, Date, Employer’s Name, EIN
At the bottom of the form will be an area for dates, signatures, employer names, and identification. Make sure to fill these out or the document will not be filed.
How to Fill Out Form MW507 if Single
As an unmarried individual, you can mark that you are filing as single. More work will be required to ensure you get the proper deductions if you have dependents.
As a single person with no dependents, mark the box titled “Single” and continue filling out the form as normal. The maximum exemptions will begin dropping off after $100,000 of income.
Single, 1 Dependent
With dependents, additional forms will need to be supplied with Form MW507, including Form 502B. As a single person with a dependent, you are considered a head of household and must mark the “married (surviving spouse or unmarried Head of Household) rate” because you qualify to have deductions reduced starting at $150,000 instead of $100,000.
Single, 2+ Dependents
For more dependents, they can be filled out on the same form as the first dependent. They only need to be differentiated if a dependent is 65 or older.
How to Fill Out Form MW507 if Married Filing Jointly
For those married filing jointly, there is a check box on the form that says married. Do not mark the one that’s for married filing separately.
If you are married and filing jointly, your reduced deduction rate changes to $150,000 from $100,000 for single workers. Outside of marking the box labeled “Married,” fill out the form as normal.
Married, 1 Dependent
Married with dependents and married without dependents are subject to the same reduction rate if filing jointly. In addition to Form MW507, make sure to attach Form 502B.
Married, 2+ Dependents
The same as one dependent. Multiple dependents can be recorded on the same form 502B.
How to Fill Out MW507 Personal Exemptions Worksheet
The MW507 Personal Exemptions Worksheet on page 2 of the form is used to figure out the total deduction you are eligible to claim on line 1. You can determine how much of your income is exempt by going through the sheet and answering the questions.
Section (a) will depend on your marital and dependent status as well as your total income. You can claim a deduction on yourself, a spouse, and dependents as long as you make below a certain threshold which varies depending on your marital and dependent status (See table on page 2 of Form MW507). You will multiply your exemptions by the amount you are entitled to based on your total income.
Example: Gabby is single with two children, making less than $100,000 in total family income. She will claim 2 exemptions. She will multiply $3,200 by 2 and receive $6,400 in exemptions.
Section (b) is for claiming dependents over the age of 65. Refer to the table to find the total value of the deduction.
Example: Tim is married, making less than $150,000 but takes care of his two elderly parents. He can claim 4 exemptions. He will multiply 4 by $3200 and receive $12,800 in exemptions.
The total amount of itemized deductions, excluding state and local income taxes, that exceed your standard deduction, alimony payments, allowable child care expenses, qualified retirement contributions, business losses, and employee business expenses for the year will go in Section (c).
Example: Gabby pays $800 per month for childcare for her child. She will enter $9,600 (800 x 12) in Section C to account for her annual childcare payments.
Section (d) is for deductions if the taxpayer and/or the spouse (if claimed) is over 65 or if either is blind. Each case is a $1,000 deduction.
Example: Tim’s wife is blind. He will enter a $1,000 deduction in Section D.
The total amount from sections (a-d) will be accounted for here.
Example: Tim will enter his total deduction amount of $13,800 ($12,800 plus $1,000) to account for his adult dependents, wife, and his wife’s allowance for being blind. Gabby, on the other hand, will write $16,000 ($6,400 plus $9,600) to account for her child and her childcare payments.
Using Section (e), divide the number by $3,200. No fractions are acceptable, and the amount is not rounded up. This is the maximum number of exemptions that can be claimed for withholding tax purposes.
Example: When Gabby divides $16,000 by $3,200, she gets 5. This will be her maximum number of exemptions. While Tim will divide $13,800 by $3,200 and get 4.3. He will drop the fraction, giving him 4. This will be his maximum exemption. Tim and Gabby will put their respective number into line 1 of Form MW507.
How Many Exemptions Should I Claim on MW507?
Using the personal exemptions worksheet, you should claim the number of exemptions you calculated. If you claim below the number of exemptions you are entitled to, you will receive a tax refund.
Claiming 0-3 Exemptions
Those claiming 0-3 exemptions are likely to be single with no dependents or disabilities. Most people will claim this number of exemptions and get a tax refund.
Example: Jonathan is single and works in Maryland, making $30,000 a year. He has no disabilities or dependents, so he files for one exemption for himself.
Claiming 3-5 Exemptions
This number is most likely for families as you will claim exemptions on yourself, your spouse, and any children you have.
Example: Stefanie is filing taxes jointly with her husband. Combined, they make $85,000 a year and have two children. She claims an exemption for each of them, resulting in 4 exemptions.
Her husband claims zero exemptions since Stefanie has claimed them on her Form MW507. (If they both claim exemptions, they will owe back taxes to the state at the end of the tax year because of a shortfall in payments.)
Claiming 5-10 Exemptions
Claiming 5-10 exemptions normally equates to a large family or a family with elderly dependents.
Example: Stacy lives with her husband, her two children, and her parents, who are both over 65. She files jointly with her husband and claims her children and both parents as dependents. Since she and her husband are filing jointly, she can claim 6 exemptions.
Claiming 10+ Exemptions
Claiming 10+ exemptions will force your employer to submit a copy of the form MW507 to the Compliance Programs section of the Compliance Division of Maryland. Having 10+ exemptions to claim is rare, so it must be confirmed by the compliance division.
Example: Patrick is married and filing jointly with his wife. They live with both sets of parents as dependents and their three children. Patrick’s wife is blind and Patrick is claiming $2,200 in itemized deductions. Patrick is claiming a deduction for himself, his wife, their children, his parents who are over age 65, his wife’s parents over age 65, and another deduction for a combination of his wife being blind and the $2,200 in itemized deductions, resulting in 10 total exemptions.
Claiming MW507 Exemptions by Filing Status
The number of exemptions you can claim will vary depending on your filing status, whereas if you are single or filing separately, you will have fewer exemptions.
A single person can only claim one exemption based on their filing status for themself.
Married Filing Jointly
If you are married and filing jointly, you may claim two exemptions, one for yourself and one for your spouse.
Head of Household
To be considered the head of household you must be unmarried at the end of the tax year and be able to claim a qualified child as a dependent. As the head of household, you may claim additional exemptions along with the one you claim for yourself.
As a surviving spouse with dependent children, you may be able to file as a qualifying widow or widower for two years after your spouse’s death to allow you to file a joint return using the highest standard deduction. You may claim additional exemptions on top of the one claimed for yourself.
Married, but Withhold at Single Rate
For those who are married but filing separately, you may only claim one exemption for yourself with no additional exemption for your spouse.
MW507 Lines 3-8: Claiming Additional Exemption(s) From Withholding
For those exempt from paying state income tax, lines 3-8 will be essential for claiming those exemptions. Learn more about each line to ensure you choose the correct option.
If you want to ensure you will not owe additional taxes at the end of the year, you can ask your employer to withhold more money from your income.
Someone may want to up their withholding because they have a side job that doesn’t withhold taxes, allowing them to break even at the end of the tax year instead of owing, or because they have owed taxes in the past and want to ensure they don’t need to pay.
Example: Mikayla started selling photography prints at festivals on the weekends. Because she is not paying taxes for her side gig, she fills out a new form MW507, at the elementary school she works for to withhold extra from each paycheck to account for her increase in income, ensuring she won’t owe taxes on her photography sales.
This line is used mainly for students and seasonal employees who do not believe they will make enough money to be taxed or for those who do not, or did not in the past, owe state taxes and were entitled to a full refund of tax withheld. Enter the applicable year, check the necessary boxes, and write “EXEMPT” on the line.
Example: Sarah works at Target on the weekends while going to school. She makes less than $12,550 for the year. She would claim an exemption from withholding to allow her more income throughout the year and to avoid filing a Maryland income tax return.
Those living in the District of Columbia, Virginia, or West Virginia are subject to the income taxes of their state/district and not Maryland.
Example: Mabel lives in Washington, DC but works at a business based in Bethesda, Maryland. She will be exempt from paying Maryland taxes because she is an out-of-state resident. She will mark “EXEMPT” in line 4.
Like line 4, line 5 is for those living in Pennsylvania to claim exemption because they are subject to Pennsylvania state taxes, not Maryland.
Example: Bruce lives in Pennsylvania while commuting to Maryland to work at a car dealership. Bruce will be exempt from filing Maryland state taxes. He will mark “EXEMPT” in line 5.
Line 6 is specific to York and Adams counties in Pennsylvania as they allow local tax exemptions for those living there but working in Maryland. If you are exempt from line 6, you should also write exempt in Line 5.
Example: Sandy lives in Adams County, Pennsylvania, while working in Baltimore County, Maryland as a teacher. She will be exempt from filing Maryland state taxes. Because she is in York or Adams county, she has a special exemption for working out of the area.
Line 7 provides exemptions from local tax because their Pennsylvania jurisdiction does not impose an earning or income tax on Maryland residents. If you are exempt from line 7, you should also write exempt in Line 5.
Example: Karl lives in Pennsylvania, where there are specific exemptions for those working in Maryland. He will mark “EXEMPT” in line 7.
Military members and their eligible spouses use line 8 because of the Servicemembers Civil Relief Act and the Military Spouses Residency Relief Act. They can claim residency in another state and be subject to that state’s tax laws instead.
Example: Meghan’s husband is in the Air Force, and they currently live in Maryland on military orders. But because she is a resident of Texas, she marks “EXEMPT” on line 8 and is exempt from paying state taxes in Maryland. She must also complete Form MW507M and attach a copy of her dependent ID.
MW507 Exemptions With 2 Earners
With two earners, you can choose to file separately or together. For those filing separately, you can only claim one exemption for yourself and may not claim an exemption for your spouse. Those filing jointly may claim one exemption for each person.
MW507 Exemptions With Multiple Jobs
If you have multiple jobs, you cannot claim the same exemptions on both. Exemptions are limited to one job. The second job will be fully taxed.
Changing MW507 Exemptions
If you have changes to make to your MW507 exemptions, you should fill out a corrected form and provide it to your employer. If you claim too many exemptions, you will owe more money on your taxes at the end of the year. You are eligible for a tax refund if you claimed too few exemptions.
Do I Need to Fill Out a MW507 Form?
Yes, you must fill out Form MW507 so your employer can withhold the proper amount of taxes from your income. Failure to do so will result in the employer withholding the maximum amount.
Here are the answers to some common questions about filling out form MW507.
Use your home address and make the appropriate line for an exemption.
This will depend on the exemption. If applicable, find the correct area on the MW507 to mark as “EXEMPT.”
There is a section to claim an exemption for those residing in other states on line 8.
Non-residents should enter Maryland County (or Baltimore County, whichever you are employed in) in the Country of Residence section.
If you owed taxes last year but received a tax return, you paid too much and should have claimed more deductions.
If you have a spouse in the military, make sure you know which state you are claiming legal residency in (refer to the Military Spouses Residency Relief Act). Fill out the form based on your claimed residency.
Single students should claim an exemption using line 3 and enter the year applicable.
A W-4 is used for federal taxes, while an MW507 is used for Maryland state taxes.
If you claim 0 exemptions, you will receive no deductions on your taxable income from the employer.
While there is no maximum, any number of exemptions over 10 is checked by the Compliance Programs Section of the Compliance Division.
Yes, if no MW507 is submitted, the maximum amount of taxes are withheld.