How to Fill Out Maryland Form MW507: Exemptions, Lines, and Filing

To fill out Maryland Form MW507, enter your total personal exemptions on Line 1, add any additional per-paycheck withholding on Line 2, use Lines 4 or 5 only if you live in a reciprocal state, sign and date the form, and give it to your employer’s payroll department. The form, officially the Employee’s Maryland Withholding Exemption Certificate, tells your employer how much state and local income tax to hold back from each paycheck.¹ It goes to your employer, not to the state.

What to Gather Before You Start

Download the current form from the Comptroller of Maryland’s website. Have three things in front of you: your Social Security number, your county of residence (or Baltimore City), and your most recent tax return so you know exactly how many dependents you claimed.² If you work in Maryland but live somewhere else, you enter the Maryland county or Baltimore City where your workplace sits, because that’s what determines your local tax rate.

Line 1: Total Personal Exemptions

Line 1 is the number that drives most of your withholding. Enter the total number of personal exemptions you plan to claim on your Maryland return, including yourself, your spouse if filing jointly, and any qualifying dependents.² More exemptions means less tax withheld each pay period. Fewer means more withheld and a bigger refund (or smaller bill) at filing time.

Line 2: Additional Withholding

Line 2 is optional. If you regularly owe money at tax time, usually because you have significant non-wage income like freelance work or investment earnings, you can ask your employer to take an extra dollar amount out of every check. Write the amount you want withheld per pay period on this line.²

Lines 4 and 5: Reciprocal State Residents

Maryland has reciprocal income tax agreements with Pennsylvania, Virginia, West Virginia, and the District of Columbia.³ If you live in one of these places and commute to a Maryland job, you can use MW507 to stop Maryland state withholding so you only pay income tax to your home state.

Use Line 4 if you live in D.C., Virginia, or West Virginia.
Use Line 5 if you live in Pennsylvania.

The eligibility rules differ slightly. D.C., Virginia, and Pennsylvania residents qualify only if they do not maintain a place of residence in Maryland for more than six months during the year. West Virginia residents qualify regardless of how long they stay in Maryland.⁴ If you don’t live in a reciprocal state, leave these lines blank.

Claiming Full Exemption from Withholding

You can claim complete exemption, meaning zero Maryland state tax comes out of your check, but only if both of these are true: you owed no Maryland income tax last year and had a right to a full refund of everything withheld, and you expect the same to be true this year.² This mostly fits students working part-time or seasonal workers with very low earnings.

Exempt status doesn’t roll over. To keep it in place, you must file a new MW507 with your employer by February 15 of the following year. Miss that deadline and your employer must resume withholding, treating you as if you claimed only one exemption.⁵ The federal W-4 uses the same February 15 date for exempt status, so it’s easiest to refile both forms together.⁶

Military Spouse Exemption Uses a Different Form

If you’re the civilian spouse of an active-duty servicemember and you live in Maryland only because your spouse is stationed here, the standard MW507 isn’t the right form on its own. Under the federal Military Spouses Residency Relief Act, you can claim exemption from Maryland withholding when your legal residence is another state and the servicemember’s permanent duty station is in Maryland, Delaware, Pennsylvania, Virginia, West Virginia, or the District of Columbia.⁷

Claiming this requires filing Form MW507M alongside a standard MW507, with a copy of your dependent military ID attached. The exemption expires every year and has to be renewed by February 15 with a fresh set of forms. If you divorce the servicemember, the servicemember dies, or the duty station moves outside the qualifying area, notify your employer right away so Maryland withholding starts back up.⁷

Where the Form Goes

Hand your completed MW507 to your employer’s payroll or HR department. You do not send it to the Comptroller. Your employer keeps the original on file and applies the exemptions starting with your next paycheck. The certificate stays in effect until you submit a new one.⁸

Your employer is required to forward a copy to the Comptroller’s Compliance Division in five situations: any certificate claiming more than 10 exemptions; a claim of full exemption from withholding when wages are expected to exceed $200 per week; an exemption claim based on living outside Maryland; any certificate the employer has reason to believe is incorrect; and every MW507M filed by a qualifying military spouse.⁸ The Comptroller reviews these and tells the employer if the withholding needs adjusting.

When You Need to File a New One

Life changes affect what you can rightfully claim, and Maryland treats increases and decreases differently. If your allowable exemptions drop, for example after a divorce or a dependent aging out of eligibility, you must file a new MW507 within 10 days of the change.⁵ Skip this and you’ll be under-withholding, which means owing the difference plus interest at tax time.

If your exemptions go up, say you get married or have a child, you can file a new form whenever you want. There’s no deadline. You’ll just keep having too much withheld until you turn one in.⁵ Two other changes worth filing for: moving to a different Maryland county changes your local tax rate, and moving out of Maryland entirely may make you eligible for a reciprocal state exemption.

Penalties for a False Certificate

Filing a false MW507 to reduce withholding is a misdemeanor. Anyone who willfully supplies incorrect information, or files a certificate designed to have less tax withheld than legally required, faces a fine of up to $500, up to six months in jail, or both.⁹ The statute turns on the word “willfully.” Miscounting your dependents by accident is fixable without criminal exposure. Deliberately inflating exemptions to inflate your paycheck is what the penalty targets, and because employers are required to forward suspicious certificates to the Comptroller, an inflated form is less likely to slip through than you might expect.

1
Comptroller of Maryland. Withholding Tax Facts January 2026
2
Comptroller of Maryland. Maryland Form MW507 – Employee’s Maryland Withholding Exemption Certificate
3
Comptroller of Maryland. Administrative Release No. 3 – Nonresident Credits, Reciprocal Income Tax Agreements
4
Comptroller of Maryland. Personal Tax Tip 56 – When You Live in One State and Work in Another
5
Library of Maryland Regulations. COMAR 03.04.01.01 – Withholding of Tax at Source
6
Internal Revenue Service. Topic No. 753, Form W-4, Employees Withholding Certificate
7
Comptroller of Maryland. Exemption from Maryland Withholding Tax for a Qualified Civilian Spouse of a U.S. Armed Forces Servicemember
8
Comptroller of Maryland. 2026 Maryland Employer Withholding Guide
9
Maryland General Assembly. Maryland Code Tax-General 13-1007 – Failure to File Income Tax Withholding Return