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Fiduciary Tax for Individual Taxpayers

The Comptroller's Office is dedicated to making the process of filing and paying taxes, simple, safe and efficient. You may have questions before, during or after you file your return. We're here to help. This section supplies the latest information for the fiduciary taxpayer.

Filing your fiduciary tax return doesn't have to be complicated or confusing. This section will help you more easily navigate through the process of filing your returns, making payments and receiving refunds. As always, if you need assistance you can contact our helpful staff or visit one of our local offices. As you navigate through the process use the links at the bottom of each page. The following will get you started in the right direction:

  • Pay it! No one likes to pay, but if you have to, visit the Payment Information section to find out how to do it as quickly and easily as possible...and what to do if you don't pay on time.
  • Get help!  If you need help contact us.

Fiduciary Tax Information

A fiduciary is a person who holds the legal title to real or personal property for the use and benefit of another, and includes a personal representative of a decedent's estate or a trustee of a testamentary or inter vivos trust ("living trust").

Fiduciaries are subject to the Maryland income tax and, dependent upon residency of the decedent, also either the local income tax rate or the special nonresident tax rate.

A fiduciary is subject to the local income tax, if the fiduciary is considered a Maryland resident. A fiduciary of an estate is a Maryland resident if the decedent of the estate was domiciled in Maryland on the date of the decedent's death.

A fiduciary of a trust is a Maryland resident if:

  • the trust was created, or consists of property transferred, by the will of the decedent who was domiciled in Maryland on the date of the decedent's death.
  • the creator of grantor of the trust is a current Maryland resident; OR
  • the trust is principally administered in Maryland.

If none of the above is applicable, then the fiduciary is considered a nonresident and is subject to the Maryland special nonresident tax.

Maryland follows the federal income tax treatment for fiduciaries of trusts and estates. Under the federal income tax rules, generally any income that is distributed by the fiduciary of the trust or estate during the tax year is not taxable to the trust or estate. Instead, that income is taxable to the beneficiary. Any income not distributed or partially distributed by the fiduciary of the trust or estate during the tax year is taxable to the fiduciary of the trust or estate.

Fiduciary Tax rates

The Maryland income tax is imposed on the Maryland taxable income of a fiduciary of an estate or trust. A fiduciary figures the Maryland income tax in much the same manner as an individual.

A fiduciary of an estate or trust is also subject to:

Either tax may be imposed on the Maryland taxable income of a fiduciary of an estate or trust.

A fiduciary is subject to the local income tax, if the fiduciary is considered a Maryland resident. A fiduciary of an estate is a Maryland resident if the decedent of the estate was domiciled in Maryland on the date of the decedent's death.

A fiduciary of a trust is a Maryland resident if:

  • the trust was created, or consists of property transferred, by the will of a decedent who was domiciled in Maryland on the date of the decedent's death;
  • the creator or grantor of the trust is a current Maryland resident; OR
  • the trust is principally administered in Maryland.

If none of the above is applicable, then the fiduciary is considered a nonresident and is subject to the Maryland special nonresident tax.

Fiduciary Tax Legislation

Administrative Release 16 - Fiduciaries, including Estates and Trusts

Donations of Conservation Easements

House Bill 187 (Chapter 19, Acts of 2007) and Senate Bill 219

This Act clarifies that the personal representative of an estate may donate a conservation easement on real property if the donation is authorized under the will. A fiduciary, or the trustee of a trust, may donate, or consent to the donation of, a conservation easement on real property if the donation is authorized under the governing instrument. The donation of a conservation easement on real property qualifies as a federal estate tax exclusion.

This Act becomes effective October 1, 2007 and can be applied retroactively to a conservation easement donation from an estate of a decedent who died on or after January 1, 1998.

Administrative Releases: Personal, Estate and Corporate Income Tax

Release # Title Revision/Effective Date
1 Military Personnel and Civilian Spouses - Both Residents and Nonresidents of Maryland Revised: 9/2011
2 Interstate Commerce Tax Act. Domestic and Foreign Corporations. Nexus Requirements. Apportionment of Corporate Net Income Revised: 9/2009
3  Nonresident Credits, Reciprocal Income Tax Agreements, Nonresident County Income Tax, and Nonresident with Maryland Resident Spouse Revised: 9/2011
4 Extension of Time for Filing Maryland Income Tax Returns and Estate Tax Returns Revised: 9/2011
5 Mutual Fund Distributions of Tax-Exempt Interest and Capital Gains from State and Local Obligations Revised: 9/2009
6 Taxation of Pass-Through Entities Having Nonresident Members Revised: 9/2012
7 Some Aspects of the Subtraction Modification for Volunteer Travel Expenses Under Section 10-208 of the Tax-General Article. See Form 502V Revised: 9/2009
8 Treatment of Partner's Share of Income, Gain or Loss, from a Partnership When the Individual Partner Establishes or Abandons Maryland Residence Revised: 9/2008
9 Portion of Subpart F Income which may be subtracted from Corporation Taxable Income Effective: 9/2009
10 Maryland Taxation of Income from "Ginnie Maes" Effective: 9/2009
11 Income from Regulated Investment Companies which Invest in U.S. Government Obligations and Income from Repurchase Agreement Transactions Revised: 9/2009
12 Apportionment of Partnership Share of Income by Corporate Partners Revised: 9/2008
13 Tax Status of Interest Received from Federal, State and Local Obligations Revised: 8/2012
14 Interest Rates for Refunds and Delinquent Taxes Revised: 11/2019
15 Information Reporting on Sales of Real Estate Located in Maryland and Owned by Nonresidents Revised: 09/2007
16 Fiduciaries, Including Estates and Trusts Revised: 9/2011
17 Rescinded Rescinded: 12/31/2001
18 Net Operating Losses and Associated Maryland Addition and Subtraction Modifications Revised: 07/2013
19 Rescinded Rescinded: 08/31/2005
20 Income Tax Refunds and Credits: Limitations Revised: 9/2009
21 Income Tax Treatment of Employee Contributions under the Maryland Pension Pickup Program Revised: 9/2010
22 Apportionment of Income - Airlines Effective: 9/2009
23 Military Retirement Income Revised: 9/2009
24 Nonresident Professional Athletes and Entertainers Revised: 9/2008
25 Income Tax Treatment of Limited Liability Companies Revised: 9/2012
26 Procedures for Computer-Printed Substitute Forms Revised: 01/2017
27 Work, Not Welfare, Tax Incentive Act of 1995 with 1996, 1998, 2000, 2003, 2006, 2007 and 2008 Amendments (Employment Opportunity Credit) Revised: 9/2012
28 Rescinded Rescinded: 08/31/2005
29 Subtraction Modification for Volunteer Fire, Rescue or Emergency Medical Services Personnel Revised: 6/2011
30 Maryland Estate Tax Revised: 05/2013
31 Subtraction Modification for Police Auxiliary or Reserve Volunteers Revised: 9/2009
32 Maryland College Savings Plans Tax Benefits Revised: 01/2010
33 Tax Credits for Hiring Individuals with Disabilities Revised: 8/2012
34 Credit against Withholding Taxes for Tax-exempt Organizations Revised: 9/2010
35 Subtraction Modification for United States Coast Guard Auxiliary Members Revised: 9/2009
36 Tax Credit for Cost of Providing Commuter Benefits to Employees and the Commuter Benefits Act of 2000 and 2002 Revised: 9/2009
37 Domicile and Residency Effective: 9/2009
38 Decoupling from Federal Income Tax Laws Revised: 9/2010
39 Long-Term Employment of Qualified Ex-Felons Tax Credit Revised: 8/2012
40 Claim of Right Effective: 9/30/2006
41 Withholding on Designated Distributions from Retirement Plans Revised: 8/2012
42 502CR Part A - Claiming Credit for State and Local Taxes Paid to Other States Revised: 3/2019

What is the Maryland estate tax? What is the tax rate?

The Maryland estate tax is a transfer tax imposed on the transfer of assets from an estate. It is based on the maximum credit for state death taxes allowable under 2011 of the Internal Revenue Code. The credit used to determine the Maryland estate tax cannot exceed 16% of the amount by which the decedent's taxable estate exceeds the Maryland estate tax exemption amount for the decedent's year of death. Note: For decedents dying after December 31, 2001, the maximum allowable credit for state death taxes will not be reduced, for purposes of the Maryland estate tax, by any act of Congress enacted on or after January 1, 2001.

If the inheritance tax paid is equal to or exceeds Maryland's determination of the credit for state death taxes, no Maryland estate tax is due. See also Calculation Method.

Who is responsible for filing the Maryland estate tax return?

The duly appointed personal representative of the decedent's estate must file the return. If there is more than one personal representative, the return must be made jointly by all. If there is no personal representative appointed, every person in actual or constructive possession of any property of the decedent is required to make and file a return. See FAQ #3, What are the requirements for filing a Maryland estate tax return? to determine if you are required to file.

What are the requirements for filing a Maryland estate tax return?

The filing requirement varies depending on the year of the decedent's death.

Generally, a return is required for every estate whose federal gross estate, plus adjusted taxable gifts, plus property for which a Maryland Qualified Terminal Interest Property (QTIP) election was previously made on a Maryland estate tax return filed for the estate of the decedent's predeceased spouse, equals or exceeds the Maryland estate tax exemption amount for the year of the decedent's death, and the decedent at the date of death was a Maryland resident or a nonresident but owned real or tangible personal property having a taxable situs in Maryland.

Year of death Gross estate
2019 and after $5,000,000
2018 $4,000,000
2017 $3,000,000
2016 $2,000,000
2015 $1,500,000
2002-2014 $1,000,000
2000-2001 $675,000
1999 $650,000
Prior to 1999 Contact us

How do I file the Maryland estate tax return? And when?

Once you have determined a Maryland estate tax return is required to be filed for the estate, complete the federal estate tax return, IRS Form 706, for the date of the decedent's death. You will be required to complete the federal return even though you may not be required to file the return with IRS.

Using the information from the federal return, complete the Maryland estate tax Form MET-1, using the form appropriate for the date of the decedent's death. See Maryland Estate and Fiduciary Forms for a list of MET-1 forms.

File the return within nine (9) months after the decedent's date of death, or by the approved extension date. The Maryland estate tax return must be filed directly with the Comptroller of Maryland.

The Comptroller of Maryland will submit the MET-1 to the Register of Wills for certification on Section III.

Include the federal return, complete with all schedules, attachments and supporting documents when filing the Maryland estate tax return. In all cases, you must submit a certified death certificate, the last will and testament and any applicable trusts.

The Maryland estate tax is payable to the Comptroller of Maryland.

Mail the estate tax return and payment to:

Comptroller of Maryland
Estate Tax Section
P.O. Box 828
Annapolis, MD 21404-0828

The Comptroller will send the return to the Register of Wills for completion of Section III to certify the payment of inheritance taxes.

Can I get an extension to file the Maryland return or pay the Maryland estate tax?

The Comptroller of Maryland may extend the time to file an estate tax return up to six months, or up to one year if the person required to file the return is out of the United States. There are also provisions for granting an alternative payment schedule for the tax payment.

The request for an extension must be in writing and filed on or before the due date of the Maryland estate tax return. The request must include:

For more information, see Request an Extension.

What recent legislative changes affect the Maryland estate tax?

Legislation enacted during the 2014 legislative session gradually conformed the Maryland estate tax exemption amount to the value of the unified credit under the federal estate tax, thereby increasing the amount that could be excluded for Maryland estate tax purposes as follows: (1) $1.5 million for a decedent dying in calendar year 2015; (2) $2.0 million for a decedent dying in calendar year 2016; (3) $3.0 million for a decedent dying in calendar year 2017; (4) $4.0 million for a decedent dying in calendar year 2018. Under the 2014 legislation, the Maryland exclusion amount was scheduled to recouple with the amount excluded under the federal estate tax for a decedent dying on or after January 1, 2019. The federal tax law changes enacted in 2017 increased the value of unified credit for federal estate tax purposes. As a result, during the 2018 Legislative Session, the Maryland General Assembly enacted the Maryland Estate Tax-Unified Credit Act which alters the unified credit used for determining the amount that can be excluded for Maryland estate tax purposes. The enacted Maryland legislation ultimately decouples the Maryland exclusion amount from the federal unified credit once again. The amount that can be excluded for decedents dying on or after January 1, 2019 is $5.0 million. The Maryland exclusion amounts for decedents dying before January 1, 2019 remain the same. The 2018 legislation also established portability for Maryland estate tax purposes. Surviving spouses may now elect to claim any unused portion of their predeceased spouse's unused Maryland estate tax exemption under certain circumstances.

During the 2012 Legislative Session the Maryland General Assembly enacted the Family Farm Preservation Act of 2012, which adds a new subsection to Title 7 of the Tax-General Article allowing for the exclusion of up to $5,000,000 of the value of qualified agricultural property from the value of the gross estate for decedents dying after December 31, 2011. The new provision also provides that the Maryland estate tax may not exceed 5% of the value of specified agricultural property exceeding $5,000,000. Maryland qualified agricultural exclusion forms may be obtained by calling the Estate Tax Unit at (410) 260-7850.

During the 2015 legislative session, the Maryland General Assembly enacted legislation that changed the option allowing Maryland estate tax returns to be filed with the Register of Wills or with the Comptroller. Beginning July 1, 2015, all Maryland estate tax returns must be filed directly with the Comptroller. Requests for certification of the amount of inheritance paid on behalf of a decedent will be made by the Comptroller only; such certification requests should no longer be made by the personal representative of the decedent's estate or any other person required to file a Maryland estate tax return with regard to property passing from the decedent.

What about the inheritance tax?

The inheritance tax is collected by the Register of Wills located in the county where the decedent either lived or owned property. The tax is imposed on the clear value of property that passes from a decedent to certain beneficiaries. It is levied on property that passes under a will, the intestate laws of succession, and property that passes under a trust, deed, joint ownership, or otherwise. For more information, contact the Office of the Register of Wills.

What if Maryland inheritance and estate taxes are both due? Isn't that double taxation?

The inheritance tax paid to the Register of Wills is subtracted from the gross Maryland estate tax liability and the difference is the Maryland estate tax due. If the inheritance tax paid is equal to or exceeds Maryland's determination of the credit for state death taxes, no Maryland estate tax is due.

However, the Maryland estate tax is owed and due until the inheritance tax is actually paid. If the amount of inheritance tax paid to the Register of Wills on or before the due date of the Maryland estate tax return is less than the gross Maryland estate tax liability, interest and/or penalty will be assessed on the outstanding liability. Interest will continue to accrue until the inheritance tax paid equals or exceeds the outstanding estate tax liability. See Comptroller of the Treasury v. Jameson, 332 Md. 723, 633 A.2d 93 (1993). For example, Estate owes $150,000 of estate tax, due by the nine (9) month statutory due date of January 1, 2014. Estate made two $75,000 payments of inheritance tax, one on December 1, 2013, and one on February 1, 2014. Because only $75,000 was paid by the estate tax due date, interest will be due on the remaining $75,000 from January 1, 2014 through February 1, 2014 when the amount of inheritance tax paid to the Register of Wills equaled the Maryland estate tax liability.

Are there interest or penalty charges for late payment of the tax?

Yes. Maryland law provides for interest and late payment penalty if the tax is not paid when due. Interest is assessed on any portion of the liability that is not satisfied by the statutory due date, notwithstanding the fact that the tax is paid pursuant to an approved alternative payment schedule. A penalty of up to 10% is charged on any Maryland estate tax not paid by the due date.

Can I get a refund if I overpay?

The law allows for refunds of Maryland estate tax up to three years from the date of the event that causes the refund to become due. File an amended Maryland estate tax return to make a request for a refund of previously paid Maryland estate tax.

What are fiduciaries and must they file fiduciary tax returns?

A fiduciary is a person who holds the legal title to real or personal property for the use and benefit of another, and includes a personal representative of a decedent's estate or a trustee of a testamentary or inter vivos trust ("living trust").

The Maryland income tax is imposed on the Maryland taxable income of a fiduciary of an estate or trust. A fiduciary figures the Maryland income tax in much the same manner as an individual.

Both a resident and a nonresident fiduciary who have Maryland taxable income and who are required to file a federal income tax return should use the Fiduciary Income Tax Return Form 504 to report and make payment of any income tax due of the estate or trust.

For more information, see Fiduciary Information on the Tax Information page.

How are personal representatives affected by state income tax?

Fiduciaries who are personal representatives of estates are subject to the Maryland income tax - as well as the Maryland inheritance tax - and may have to file Maryland Form 504 and pay the Maryland income tax. Maryland follows federal rules for filing and paying estimated taxes. Personal representatives are exempt from paying estimated taxes during the first two taxable years of the estate. See also Fiduciary Information on the Tax Information page.

If I open and close the estate in the same year, am I required to file a Maryland income tax fiduciary return?

If the estate is opened and closed in the same year, you are only required to file a Maryland income tax return if you filed a federal fiduciary return and have Maryland taxable income. Generally, there is no Maryland taxable income if all the income is distributed during the estate closure.

Information must be provided to the beneficiaries so that they can file an accurate Maryland return. This includes information on Maryland source income and addition and subtraction modifications.

What Maryland forms are needed to meet these fiduciary filing requirements?

Personal representatives and trustees must file Maryland Form 504 to pay the Maryland income tax. Fiduciaries paying estimated taxes must file Maryland Form 504D provided by the Maryland Revenue Administration Division. See also Fiduciary Information.

Fiduciary Filing Information

Both resident and nonresident fiduciaries who have Maryland taxable income and who are required to file a federal income tax return should use the Fiduciary Income Tax Return Form 504 to report and make payment of any income tax due of the estate or trust. Nonresident fiduciaries must also file Form 504NR which is used to calculate their nonresident tax. At this time, fiduciary tax returns cannot be filed electronically.

If you are a nonresident who owns and is selling or transferring real property and associated tangible personal property in Maryland, you must make a tax withholding payment to the local Clerk of the Circuit Court or the Maryland Department of Assessments and Taxation (SDAT). The payment must be made before the deed or other instrument of transfer is recorded with the court clerk or filed with SDAT. For more information, see Sales of Real Property by Nonresidents.

For a calendar year estate or trust, the fiduciary must file and pay the income tax on or before April 15 of the next taxable year. For a fiscal year estate or trust, the fiduciary must file and pay the income tax on or before the 15th day of the fourth month following the close of that taxable year.

Completed forms should be mailed to:

Comptroller of Maryland
Revenue Administration Division
110 Carroll Street
Annapolis, Maryland 21411-0001

Filing Extension for Fiduciaries

A fiduciary may obtain an automatic six-month extension to file Form 504. The fiduciary should complete the worksheet on Form 504E, Application for Extension to File Fiduciary Income Tax Return, to determine whether a tax is due. The extension request must be filed on or before April 15. If the due date falls on a Saturday, Sunday or legal holiday, the return must be filed by the next business day. Fiscal year taxpayers must file the extension request by the 15th day of the fourth month following the close of the taxable year. Filing this form extends the time you can file your return, but does not extend the time to pay your taxes. Payment of the expected tax due is required by April 15, 2020.

The Form 510, Pass-through Entity Tax Return, only will allow a refund if there are no nonresident members and the amount on line 13 of the return is zero.

Refund Claims

Generally, a claim for a refund (amended return) must be filed within 3 years from the date the original return was filed or within 2 years from the date the tax was paid, whichever is later. A return filed early is considered filed on the date it was due.

If the claim for refund resulted from an IRS adjustment or final decision of a federal court which is more than 3 years from the date of filing the return or more than 2 years from the time the tax was paid, a claim for refund must be filed within 1 year from the date of the adjustment or final decision.

A claim for refund based on a federal net operating loss carryback must be filed within 3 years after the due date of the return for the tax year of the net operating loss.

510C

Effective tax year 2011, a pass-through entity may elect to file a composite Maryland income tax return Form 510C on behalf of qualified nonresident individual members. All members who qualify and elect to be included on the composite return must agree that the pass-through entity is their agent for the receipt of any refund or for payment of any tax due.