Determination engine

Which state do you actually withhold in?

Reciprocity, convenience-of-the-employer, nonresident thresholds and unemployment localization, applied together to one employee's facts. Every answer cites the state source it came from.

Withhold Maryland income tax.

Delaware residents get no exemption from Maryland tax, so the work state governs.

Income tax withheld to

Maryland

Graduated, top rate 6.5%

Employee certificate

MW507

Employee's Maryland Withholding Exemption Certificate

Unemployment insurance

Maryland

Localized under factor 1: Localization.

Reciprocal agreement

Maryland has agreements, but not with Delaware.

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Withhold Maryland nonresident income tax

Maryland taxes wages earned inside the state by nonresidents, and no reciprocal agreement covers Delaware residents. Maryland requires withholding from the first dollar of in-state wages.

Delaware also taxes this income, with a credit

The residence state taxes worldwide income. The employee claims a credit on the Delaware return for tax paid to Maryland, which prevents true double taxation but usually still leaves a balance if Delaware's rate is higher. Some employers withhold for both states; many withhold only for Maryland and let the employee manage the difference.

Maryland has local income taxes

EVERY Maryland county and Baltimore City imposes a local income tax, collected together with the state tax through payroll withholding at combined state+local rates. Nonresidents working in Maryland who are not covered by reciprocity pay a special nonresident rate (state rate plus a statutory nonresident surcharge) in lieu of a county rate.

Delaware has local income taxes at the residence

The City of Wilmington imposes a 1.25% earned income (wage) tax on residents and on nonresidents working in Wilmington, plus a separate employer head tax. Administered by the City of Wilmington, not the Delaware Division of Revenue.

Delaware also runs a paid leave program

The employee resides in Delaware, which has a mandatory paid leave program, but unemployment coverage is localized to Maryland. Check whether Delaware requires coverage based on residence; several programs use a work-location test and a few do not.

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Employer registrations you will need

Maryland — Income tax withholding: Comptroller of Maryland
Maryland — Unemployment insurance: Maryland Department of Labor, Division of Unemployment Insurance

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Get the form

MW507 — Maryland (official state source)

Maryland profile Delaware profile Full write-up for this pair

Change the inputs

Withholding determination

Answer six questions. The result is a shareable link, so you can paste it into a ticket or an email.

Employee lives inState of residence

Work is performed inWhere the employee physically sits

Employer is based inWhere the work is directed from

Days in the work stateThis calendar year, leave blank if unknown

Wages from work-state daysUS dollars, leave blank if unknown

Arrangement Works remotely rather than at an employer location Remote work is an employer necessity, not employee preference

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This is a determination aid, not advice. StateSide encodes published state rules and applies them mechanically to the facts you enter. It does not know your entity structure, your nexus history, your equity compensation, or the dozens of exceptions that turn a clean rule into a judgement call. Every determination cites the state source it came from — verify against that source, and take anything consequential to a payroll tax professional before you act on it.