The Washington Post takes a brief look at what's happening at Fort Meade.
- Brad Aaron
Monday, September 27, 2010
Thursday, September 23, 2010
What You Need to Know About Taxes – Maryland vs. New Jersey
If you have recently relocated to Maryland you are still getting used to the transportation, shopping, schools, amenities, and other attributes of the region. As you are getting acclimated don’t forget to consider the following basic tax distinctions between Maryland and New Jersey. From an income tax perspective, Maryland has a slight advantage.
Corporate income tax is based upon federal taxable income after state modification. In Maryland the corporate income tax rate is 8.25%. The rate is slightly higher in New Jersey at 9% for income of $100,000 or more, but lower rates apply if the corporation’s income is less than $100,000.
Individual income tax is calculated on the total income received with certain allocations made for income earned in other states. Both states use a graduated scale with New Jersey’s individual income tax rates ranging from 1.4% on the first $20,000 of income to 8.97% on income over $500,000. Maryland’s individual income tax rates range from 2% on the first $1,000 of income to 6.25% on income over $1.0 million.
Maryland also permits a local tax rate which is levied by 23 counties and Baltimore City. The local tax rate ranges from 1.25% in Worcester County to 3.2% in Montgomery, Prince George’s, and Howard County. Harford County’s tax falls somewhere in the middle at 3.06%.
Business Tax Incentives and/or credits are offered by both states. Specific information on the business tax credits available in Maryland can be found at http://business.marylandtaxes.com/taxinfo/taxcredit/default.asp.
When it comes to estate and inheritance taxes, Maryland and New Jersey are the only two states that impose both taxes.
Estate and gift taxes are imposed on the value of assets transferred by a person at death (estate tax) or during his life (gift tax). Although the federal estate and gift taxes are currently in a state of flux, the estate and gift taxes in Maryland and New Jersey remain pretty constant. Although both states have a maximum estate tax rate of 16%, the estate tax exemption in Maryland is $1.0 million and in New Jersey it is $675,000. Estates in excess of the applicable estate tax exemption are subject to the tax. Luckily neither state imposes a separate gift tax. As a resident of Maryland, the only gift tax that applies is the one imposed by the Internal Revenue Service on gifts in excess of the annual exclusion limit which is currently $13,000.
One big distinction is that New Jersey recognizes civil unions and permits the surviving partner in a civil union to be treated in the same manner as a surviving spouse for purposes of the marital deduction. Maryland does not recognize civil unions or domestic partnerships for the purposes of estate taxes.
Inheritance tax can also be imposed by the state and/or county government on most inherited assets. The advantage in Maryland is that the inheritance tax rate is 10% and applies to most assets inherited by a non-lineal descendant or non-charitable beneficiary. New Jersey’s inheritance tax range from 11% to 16% and certain exemption also apply.
Again, the biggest distinction is that New Jersey recognizes civil unions and exempts the surviving partner from inheritance tax. In Maryland, the surviving domestic partner is not exempt from inheritance tax except on the receipt of an interest in a joint primary residence if the primary residence was held in joint tenancy by the decedent and the domestic partner and the primary residence passes to or for the use of the domestic partner, but the individuals must meet Maryland’s requirements for domestic partnership. All other assets transferred to a domestic partner will be subject to the 10% inheritance tax.
- Content McLaughlin
Corporate income tax is based upon federal taxable income after state modification. In Maryland the corporate income tax rate is 8.25%. The rate is slightly higher in New Jersey at 9% for income of $100,000 or more, but lower rates apply if the corporation’s income is less than $100,000.
Individual income tax is calculated on the total income received with certain allocations made for income earned in other states. Both states use a graduated scale with New Jersey’s individual income tax rates ranging from 1.4% on the first $20,000 of income to 8.97% on income over $500,000. Maryland’s individual income tax rates range from 2% on the first $1,000 of income to 6.25% on income over $1.0 million.
Maryland also permits a local tax rate which is levied by 23 counties and Baltimore City. The local tax rate ranges from 1.25% in Worcester County to 3.2% in Montgomery, Prince George’s, and Howard County. Harford County’s tax falls somewhere in the middle at 3.06%.
Business Tax Incentives and/or credits are offered by both states. Specific information on the business tax credits available in Maryland can be found at http://business.marylandtaxes.com/taxinfo/taxcredit/default.asp.
When it comes to estate and inheritance taxes, Maryland and New Jersey are the only two states that impose both taxes.
Estate and gift taxes are imposed on the value of assets transferred by a person at death (estate tax) or during his life (gift tax). Although the federal estate and gift taxes are currently in a state of flux, the estate and gift taxes in Maryland and New Jersey remain pretty constant. Although both states have a maximum estate tax rate of 16%, the estate tax exemption in Maryland is $1.0 million and in New Jersey it is $675,000. Estates in excess of the applicable estate tax exemption are subject to the tax. Luckily neither state imposes a separate gift tax. As a resident of Maryland, the only gift tax that applies is the one imposed by the Internal Revenue Service on gifts in excess of the annual exclusion limit which is currently $13,000.
One big distinction is that New Jersey recognizes civil unions and permits the surviving partner in a civil union to be treated in the same manner as a surviving spouse for purposes of the marital deduction. Maryland does not recognize civil unions or domestic partnerships for the purposes of estate taxes.
Inheritance tax can also be imposed by the state and/or county government on most inherited assets. The advantage in Maryland is that the inheritance tax rate is 10% and applies to most assets inherited by a non-lineal descendant or non-charitable beneficiary. New Jersey’s inheritance tax range from 11% to 16% and certain exemption also apply.
Again, the biggest distinction is that New Jersey recognizes civil unions and exempts the surviving partner from inheritance tax. In Maryland, the surviving domestic partner is not exempt from inheritance tax except on the receipt of an interest in a joint primary residence if the primary residence was held in joint tenancy by the decedent and the domestic partner and the primary residence passes to or for the use of the domestic partner, but the individuals must meet Maryland’s requirements for domestic partnership. All other assets transferred to a domestic partner will be subject to the 10% inheritance tax.
- Content McLaughlin
Monday, September 20, 2010
Friday, September 3, 2010
Record Federal Dollars Flow into Maryland
BRAC-related construction fueled a record 35% increase in the flow of federal dollars into Maryland last fiscal year.
- Brad Aaron
- Brad Aaron
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