How to Fill Out Form MW507: A Step-by-Step Maryland Guide (2026)

Starting a new job in Maryland involves a packet of onboarding paperwork. Alongside the federal W-4 form, you will be handed Form MW507 — the Employee's Maryland Withholding Exemption Certificate.

Form MW507 is one of the most important forms you will sign because it tells your employer's payroll department exactly how much Maryland state and county tax to deduct from each paycheck. Filling it out incorrectly can lead to either an unexpectedly small paycheck or a massive tax bill at the end of the year. This guide provides a step-by-step walkthrough to ensure yours is accurate.

---

What is Form MW507 and Why Does It Matter?

Form MW507 is Maryland's equivalent of the federal W-4 form. While the federal W-4 was redesigned in 2020 to eliminate withholding allowances, Maryland still uses the traditional allowance-based system.

Every allowance you claim on Form MW507 reduces the amount of state and county income tax withheld from your check.

• Too many allowances: You will not withhold enough tax, which could result in underpayment penalties and a tax bill when you file your returns.
• Too few allowances: Your employer will withhold too much money, giving you a smaller paycheck and forcing you to wait for a refund from the Comptroller of Maryland.

---

Step-by-Step Instructions: Filling Out Form MW507

Section 1: Personal Information

At the top of the form, fill in your name, address, Social Security Number, and county of residence.

• County of Residence: This is critical. Maryland county piggyback taxes (2.25% to 3.30%) are determined entirely by where you live. Make sure you enter your permanent home county, not the county where your office is located.

Section 2: Calculating Your Allowances (Lines 1 to 3)

• Line 1 (Single/Married Status): Indicate whether you are filing as Single or Married. This sets your default withholding bracket.
• Line 2 (Allowances): Count your allowances. You can claim one allowance for:
  • Yourself (if no one else claims you as a dependent).
  • Your spouse (if filing jointly and they do not claim themselves).
  • Each dependent child or relative you claim on your tax return.
  • Having significant itemized deductions or qualifying tax credits.
• Line 3 (Additional Withholding): If you expect to owe extra taxes at the end of the year (e.g., from investment earnings or a side business), write the exact dollar amount you want deducted additionally from each check.

Section 3: Claiming Exemption from Withholding (Lines 4 to 8)

You can claim a complete exemption from Maryland income tax withholding on these lines under specific circumstances:

• Line 4 (Low Income): If you earned less than the filing threshold last year and expect to earn less this year, you can check this box to receive your paycheck without any Maryland tax deductions.
• Line 5 (Non-resident Reciprocity): If you live in Virginia, Washington D.C., West Virginia, or Pennsylvania and work in Maryland, you claim exemption from Maryland taxes here by checking this box.
• Line 6 (Military Spouse): Under the Military Spouses Residency Relief Act, check this box if you are a non-resident military spouse stationed in Maryland.

---

Common Mistakes When Filling Out Form MW507

• Using the Federal W-4 Allowance Logic: Since federal forms no longer use allowances, employees often get confused and leave Line 2 of Form MW507 blank. Leaving it blank defaults your allowances to 0, resulting in the highest possible tax withholding and a much smaller paycheck.
• Entering the Work County Instead of the Home County: If you live in Carroll County but work in Baltimore City, you must write "Carroll" on the form. Writing "Baltimore City" will cause your employer to withhold the higher Baltimore City rate (3.30%) instead of the lower Carroll County rate (3.05%).
• Forgetting to Update the Form After Life Events: You should submit a new Form MW507 to HR within 10 days of major life events, such as marriage, divorce, birth of a child, or moving to a different Maryland county.

---

Frequently Asked Questions (FAQs)

What happens if I do not submit Form MW507?

If you do not submit a completed Form MW507, your employer is legally required to withhold taxes at the single rate with zero allowances and apply the maximum county rate (currently 3.30%). This will significantly reduce your take-home pay.

Can I change my allowances at any time?

Yes. You can submit a revised Form MW507 to your employer's payroll department at any time during the year. The updates will typically take effect within 1-2 pay cycles.

Is Form MW507 filed with the state?

No. Your employer keeps Form MW507 in your payroll files. It is not sent to the Comptroller of Maryland unless requested for verification.