The Nonresident Tax Paid by Pass-Through Entities section allows Maryland taxpayers to claim credit for Maryland income tax that was already paid on their behalf by a Pass-Through Entity (PTE), such as a partnership, S corporation, LLC, trust, or estate.
Rather than paying the tax directly, the entity pays Maryland tax and reports each owner's share on a Maryland Schedule K-1 (Form 510). The taxpayer can then claim that amount on their Maryland return to avoid being taxed twice on the same income.
Program Entry
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Maryland → Payments → Nonresident Tax Paid by Pass-Through Entities
Nonresident Tax Paid by Pass-Through Entities
Maryland allows certain taxpayers to claim credit for tax paid on their behalf by a pass-through entity.
Examples of pass-through entities include:
- Partnerships
- S Corporations
- Certain LLCs
- Trusts and estates
What Amount Should Be Entered?
Enter the amount of Maryland nonresident tax paid by the pass-through entity on your behalf.
This amount is typically reported on:
- Maryland Schedule K-1 (Form 510)
- Other pass-through entity reporting statements
Attach Maryland Schedule K-1 (Form 510)
If claiming nonresident tax paid by a pass-through entity, you may be required to attach a copy of:
Maryland Schedule K-1 (Form 510)
The K-1 provides documentation supporting:
- Income allocations
- Tax paid on behalf of the member
- Credit amounts claimed
Select Attach PDF of MD Schedule K-1 (510) to upload the required documentation.
Why Is This Important?
Entering this amount ensures you receive proper credit for taxes already paid by the entity. If the payment is not reported, your Maryland refund may be lower, or you could appear to owe tax that has already been paid on your behalf.
Important Notes
- Do not enter W-2 or 1099 withholding in this section.
- Only enter the tax amount paid by the pass-through entity.
- Retain a copy of all K-1s and supporting documents for your records.
- Failure to provide the Schedule K-1 may delay processing of the return.