How to Complete and Submit Maryland Form WH-AR: Affidavit of Residence

Maryland Form WH-AR is a one-page certification you sign at settlement to avoid the state’s nonresident income tax withholding when you sell Maryland real property. Under Tax-General §10-912, a closing agent must otherwise withhold a percentage of your net proceeds and pay it to the Clerk of the Circuit Court with the deed.¹ WH-AR eliminates that withholding by certifying, under penalty of perjury, that you are a Maryland resident or that the home you are selling is your principal residence.² Get it right at closing and the state keeps its hands off your sale proceeds; get it wrong and 8% or more of your net can be held back until you file your return.

Who Can Use Form WH-AR

The form offers two independent grounds for exemption. You only need to meet one.²

Maryland Resident or Resident Entity

If you are a Maryland resident on the date you sign, you qualify. For a business seller, a “resident entity” means one formed under Maryland law, or one formed elsewhere but qualified by or registered with the State Department of Assessments and Taxation to do business in Maryland.¹ An out-of-state LLC that never registered with SDAT does not qualify under this prong, even if it has been collecting rent on the property for years.

Former Resident Selling a Principal Residence

If you have moved out of Maryland but the property was your home, you can still claim the exemption. The form uses the IRC §121 test: you must have owned and used the property as your principal residence for at least two of the five years before the sale, and it must be recorded as your principal residence with SDAT.² Check the SDAT listing before settlement. If the property is coded as an investment or second home, the certification will not stand up even if the two-of-five-years use test is clearly met.

Filling Out the Form

Download the current version from the Comptroller’s website before closing.³ The form is short, but every field has to be right because the Clerk will not accept alterations.

Transferor Information

Enter the full legal name of the seller. If several sellers appear on the deed, each nonresident or potentially nonresident seller needs a separate WH-AR. Spouses who will file a joint Maryland return can share one form.

Property Description

Give the street address of the property. When no street address exists, list the county, district, subdistrict, and lot numbers so the Clerk can match the certification to the deed being recorded.²

Reason for Exemption

Check one box, not both. The resident box certifies that you are a Maryland resident as of the signing date, or, for an entity, that it meets the resident-entity definition under COMAR 03.04.12.02B(11) and that the signer has authority to act for it. The principal-residence box certifies that although you are no longer a Maryland resident, the property meets the IRC §121 two-of-five-years test and is on file with SDAT as your principal residence.²

Signature

The form has two signature blocks. Use the one that fits your situation. An individual signs, dates, and has a witness sign and print a name; the witness requirement is built into the form. An entity prints its name, then the signer prints a name and title, signs, and dates.

Above the signature, you are certifying under penalty of perjury that the declaration is true, correct, and complete.² A false certification is not a paperwork problem. Confirm your residency status or your SDAT principal-residence coding before signing.

When and Where to Submit It

Timing is strict. Form WH-AR is only valid if it is executed on the date the property is transferred and properly recorded with the Clerk of the Court.² You cannot sign it a few days ahead and bring it to closing. You sign it at the settlement table on the same date the deed transfers ownership.

The closing agent includes the completed form with the deed package presented to the Clerk of the Circuit Court for recordation. The Clerk will only accept an unaltered form. Handwritten changes, crossed-out lines, or edits to the certification language will cause the office to reject it as a valid §10-912 certification, and the closing agent will then have to withhold the tax as if no exemption had been claimed.² When every seller on the transaction provides a valid WH-AR, the closing agent does not have to file Form MW506NRS or attach a total-payment affidavit, and settlement closes with no withholding at all.⁴

What Happens If You Do Not Qualify

If you are a nonresident and cannot claim either exemption on WH-AR, the closing agent withholds and pays the tax to the Clerk with Form MW506NRS at recordation.⁵ The rates are:

8.0% of the total payment for individuals, estates, and trusts
8.25% of the total payment for business entities

“Total payment” is not the sale price. It is the net proceeds actually paid to the seller after mortgage payoffs, liens, commissions, and other seller expenses on the settlement statement. The money is not lost. It becomes an estimated income tax payment credited on your Maryland return for the year of sale — Form 505 for individuals, Form 500 for C corporations, Form 510 for pass-through entities, Form 504 for trusts and estates. Any excess over your actual Maryland liability comes back as a refund.⁵

If waiting until tax-filing season would tie up too much cash, individual, fiduciary, and C corporation sellers can apply for a tentative refund on Form MW506R at least 60 days after the withholding was paid; pass-through entities and their members cannot use it, and sales closing on or after October 1 of the tax year are ineligible.⁶

Exemptions Form WH-AR Does Not Cover

WH-AR is only the residency and principal-residence route. Other transfers avoid withholding through different channels, and if your sale fits one of them you should not be using WH-AR at all. Foreclosures, deeds in lieu of foreclosure, sales by government transferors, and deeds with zero consideration on the required Tax-Property §12-104 statement are exempt automatically, with no form to file.⁷ Nonresidents whose transaction is a like-kind exchange under IRC §1031, a transfer between spouses incident to divorce, a transfer to a controlled corporation under IRC §351, or another recognized tax-free restructuring apply to the Comptroller in advance on Form MW506AE and, if approved, present the resulting Form MW506E to the Clerk at recordation.⁸

Mistakes That Void the Form

Most WH-AR problems come down to a handful of avoidable errors:

Signing before closing day. The execution date has to match the transfer date, or the form is invalid.
Claiming resident-entity status for an out-of-state LLC that never registered with SDAT. Maryland operations alone are not enough.
Checking the principal-residence box when SDAT does not have the property coded as your principal residence. Verify the listing before settlement.
Altering the form. Handwritten fixes cause the Clerk to reject it. Print a clean copy and start over.
Assuming WH-AR handles your Maryland tax on the sale. It only stops withholding at closing. If the sale produces Maryland-taxable gain, you still owe the tax on your annual return.

1
Maryland General Assembly. Maryland Code Tax-General 10-912
2
Comptroller of Maryland. 2026 Maryland Form WH-AR – Certification of Exemption from Withholding Upon Disposition of Maryland Real Estate
3
Maryland Comptroller. Tax Guidance – Withholding Forms
4
Comptroller of Maryland. Maryland’s Withholding Requirements
5
Comptroller of Maryland. Form MW506NRS – Return of Income Tax Withholding for Nonresident Sale of Real Property
6
Comptroller of Maryland. 2024 MW506R – Application for Tentative Refund of Withholding on Sales of Real Property by Nonresidents
7
Library of Maryland Regulations. COMAR 03.04.12.03 – Withholding Requirements
8
Library of Maryland Regulations. COMAR 03.04.12.04 – Certificate of Full or Partial Exemption