How to Complete and File Maryland Form 510C: Schedule A, Deadlines, and Payment

Maryland Form 510C is the composite income tax return a pass-through entity files to report and pay Maryland tax on behalf of its electing nonresident individual members, so those members don’t each have to file their own Maryland nonresident return. You complete Form 510 first, then transfer the numbers onto Form 510C, list each participating member on Schedule A, apply the 8.75% composite rate to each member’s Maryland-source income, subtract any withholding and estimated payments already made, and mail the return with any balance due to the Comptroller of Maryland in Annapolis.¹

Who Qualifies to Be Included

Only nonresident individual members can be on a composite return. Fiduciaries, estates, trusts, and entity members such as corporations or other partnerships cannot participate.¹ Each qualifying member has to elect to be included; you can’t add someone without their agreement. A single-member entity cannot file Form 510C at all.

Starting with tax year 2025, a nonresident individual member who received net capital gain income subject to Maryland tax is also excluded. Those members have to file their own Maryland nonresident returns.¹ A member with other Maryland-source income outside the entity may also be too complex for the composite format and is usually better off filing individually. The governing standard, laid out in COMAR 03.04.07.05 and the Comptroller’s Technical Bulletin 6, is that the composite return must accurately reflect each included member’s Maryland taxable income and tax liability.²

Finish Form 510 First

Form 510C is not a standalone document. Many of its lines pull directly from the main Form 510 (Pass-Through Entity Income Tax Return), and the Comptroller’s instructions open with the directive: “You must complete Form 510 before you begin this return.”¹ In particular, each member’s pro rata share of Maryland-allocated income on Schedule A, Column F, generally comes from line 4 of Form 510.

Entity Information at the Top

The header collects the entity’s FEIN, date of organization or incorporation, business activity code, legal name, mailing address, and tax year. Mark fiscal year dates if the entity doesn’t use the calendar year.³ Line 2 asks for the total number of eligible nonresident individual members on the return; that count has to match the number of members listed on Schedule A.¹

Completing Schedule A

Schedule A is where most of the work happens. Every participating member gets a row across seven columns:¹

Column A, the member’s full name and Social Security Number.
Column B, the number of exemption allowances the member claims.
Column C, the exemption dollar amount, based on the member’s filing status and prorated by the Maryland income factor (Maryland adjusted gross income divided by federal adjusted gross income). The base exemption calculation is in Form 505 Instruction 10.
Column D, the standard deduction, also based on filing status and prorated by the Maryland income factor. See Form 505 Instruction 15 for the amount.
Column E, the decoupling modification flow-through from the entity, tied to Maryland’s decoupling from federal bonus depreciation rules.
Column F, the member’s pro rata share of income allocable to Maryland, generally from Form 510, line 4. Enter zero if the amount is negative; one member’s loss cannot offset another member’s income on a composite return.
Column G, the member’s pro rata share of nonresident withholding tax already paid by the entity, from Form 510 lines 16g and 17.

Columns C and D take the most time because the figures depend on each member’s filing status and total federal adjusted gross income. If gathering that federal data for every member isn’t practical, the instructions let you approximate the income factor using Form 510 line 6 as the numerator and line 2 as the denominator. Technical Bulletin 6 covers that alternative.

Calculating the Tax

The totals from Schedule A flow into the numbered lines on the front of Form 510C. Line 8 is the sum of all members’ Column F amounts, the total income allocable to Maryland. The totals from Columns C and D feed lines 4 and 5 and reduce the taxable base.

The 2025 composite rate is 8.75%: 6.50% top marginal state income tax, plus 2.25% special nonresident tax under Tax-General § 10-106.1. The 2.25% figure equals the lowest county income tax rate charged by any Maryland county and stands in for the county tax nonresidents don’t otherwise pay.¹⁴

From the gross tax, subtract the credits: each member’s share of nonresident withholding tax already remitted with Form 510 (the Column G totals), plus any estimated payments made during the year on Form 510/511D. The remainder is the net tax due, and it has to be paid when the return is filed.¹

Estimated Payments During the Year

If the entity expects its total pass-through entity tax under Tax-General § 10-102.1 to exceed $1,000 for the year, it has to make quarterly estimated payments on Form 510/511D, at least 25% of the estimated annual tax each quarter.⁵ Partnerships and LLCs taxed as partnerships pay on the 15th of the 4th, 6th, and 9th months of the tax year and the 15th of the 1st month of the following year. S corporations pay on the 15th of the 4th, 6th, 9th, and 12th months.

Underpayment triggers interest and penalties computed from each installment’s due date. The safe harbor is the lesser of 90% of the current year’s tax or 110% of the prior year’s tax.⁵ Whatever estimated payments the entity made get credited against the composite liability on Form 510C.

Deadline and Extensions

Form 510C is due on the same day as Form 510: March 15 following the close of the calendar tax year for partnerships, LLCs, and S corporations. The Comptroller grants automatic extensions through Form 510E, six months for partnerships, LLCs, and business trusts, and seven months for S corporations.⁶ An entity with a zero balance due that has previously filed Form 500 or 510 can submit the extension instantly through the Comptroller’s online system; otherwise a paper Form 510E is required.

An extension buys time to file, not time to pay. Any balance owed is still due by the original filing date, and late payments accrue interest and penalties from that date.

Where to File and How to Pay

Mail the completed Form 510C with Schedule A and any supporting documentation to:

Comptroller of Maryland
Revenue Administration Division
110 Carroll Street
Annapolis, Maryland 21411-0001¹

Payment, which has to accompany the return in full, can be made by check, money order, or electronic funds transfer. Keep copies of the return, Schedule A, payment confirmation, and any extension request.

The Comptroller’s website supports electronic filing for some business returns, but the Form 510C instructions don’t describe an electronic filing option for this form specifically.⁷ If you use third-party tax software, check whether it transmits Form 510C electronically before assuming you have to paper file.

Penalties and Interest

Late payment penalties can reach 25% of the unpaid tax.⁸ Interest runs from the original due date until the tax is paid, at an annual rate that changes each calendar year; for 2025 the rate was 11.4825%. If an assessment notice goes unanswered past the 30-day appeal window, the Comptroller can file property liens or garnish bank accounts and wages.

The entity is on the hook for the tax, interest, and penalties attributable to every member on the composite return. Where a member’s circumstances don’t fit the composite format cleanly, filing a separate Maryland nonresident return for that member is the safer path.

1
Comptroller of Maryland. Composite Pass-Through Entity Income Tax Return Form 510C
2
Legal Information Institute. Maryland Code of Maryland Regulations 03.04.07.05 – Composite Returns
3
Comptroller of Maryland. Maryland Form 510C – Composite Pass-Through Entity Income Tax Return
4
Maryland General Assembly. Maryland Code Tax-General 10-106.1
5
Library of Maryland Regulations. COMAR 03.04.07 – Pass-Through Entity Tax
6
Comptroller of Maryland. MDComp – Online Extensions for Maryland Business Tax Returns
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Comptroller of Maryland. Business Tax Forms and Instructions
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Comptroller of Maryland. Tax Guidance – Penalty and Interest Charges