Maryland Sellers: Non-Resident Tax Withholding
May 4, 2019
Non-resident seller withholding
If you are selling an investment property in Maryland and don't live in Maryland, you may have funds withheld at settlement. As of October 2018, the rate is 7.5% for nonresident individuals and 8.25% for a nonresident entity. You might wonder why the withholding exists, but it's fairly simple - most sellers forget to file a State of Maryland tax return after settlement and whatever capital gains that might be due to the state are lost.
It is a withholding, not a tax, much like the taxes that are withheld from a paycheck. You can file for any refund that may be due within 60 days of settlement. There is great information buried on page 5 of a booklet put out by Maryland called MARYLAND'S WITHHOLDING REQUIREMENTS for Sales or Transfers of Real Property and Associated Personal Property by Nonresidents. The rest of the booklet is helpful, but the FAQ that starts on page 5 are actually written in plain English.
A lifetime Maryland resident, Susan Pruden has the ideal foundation for selling and buying homes. After 8 years working in just about every facet of the mortgage industry, and several years with her own company specializing in marketing for real estate agents, Susan got her real estate license in 1994. Susan has earned several industry awards. The CENTURY 21 Quality Service Pinnacle Award is based on reviews from Susan's clients and is earned by a very small percentage of agents. She has earned that coveted recognition since 2012
Two others were awarded by the Prince George's Association of REALTORS®. The Distinguished Sales Associate of the Year Award is based on a mixture of community involvement, association involvement and real estate education and designations. The other, the Distinguished Service Award, is for "exceptional meritorious service."
Susan is involved in her local community. She was named Cheverly Volunteer of the Year in 2018, even having June 25th designated "Susan Pruden Day" in the Town of Cheverly. She is also a Commissioner on the Prince George's County Historic Preservation Commission and President of the Cheverly American Legion Auxiliary.
Susan Pruden has lived in Cheverly lived with her husband, Joseph, for almost 30 years.
