Maryland has a unique tax structure for out-of-state travel nurses. In addition to state income tax brackets ranging from 2.0 to 5.75 percent, Maryland assesses a mandatory special nonresident county tax of 2.25 percent on all Maryland-source income.
Travel nurses working at medical institutions in Baltimore, Bethesda, Silver Spring, or Annapolis must account for both state and county tax layers when evaluating assignment offers.
The special nonresident tax explained
Residents of Maryland pay state income tax plus a local piggyback tax determined by their county of residence. Because nonresidents do not live in a specific Maryland county, Maryland levies a uniform 2.25 percent special nonresident tax on all income derived from Maryland sources.
When you add the 2.25 percent local rate to Maryland top individual state bracket of 5.75 percent, the effective combined marginal tax rate on your taxable hourly wages can reach 8.0 percent. This rate applies only to your taxable hourly base and overtime, not to qualified travel stipends.
You can model the combined impact of Maryland state and county withholding on your weekly take-home pay using our Contract Analyzer.
Filing Maryland Form 505 and reciprocity exemptions
Nonresident travel nurses report their earnings on Maryland Form 505 (Nonresident Income Tax Return). On this return, you list your total federal adjusted gross income in one column and your Maryland taxable wages in the adjacent column to determine your state tax allocation percentage.
Maryland maintains tax reciprocity agreements with Pennsylvania, Virginia, West Virginia, and Washington D.C. Under these agreements, if your permanent residence is in one of these jurisdictions and you commute to Maryland to work, you pay income tax only to your home state.
To claim an exemption from Maryland state and local withholding under reciprocity, you must provide your staffing agency with Form MW507 (Employee Maryland Withholding Exemption Certificate). Official filing forms and instructions are available through the Comptroller of Maryland.
Accountable plans and per diem standards
Travel stipends for housing and meals in Maryland must comply with federal per diem caps established by the General Services Administration. GSA lodging rates in the Bethesda and Baltimore metropolitan areas fluctuate significantly between winter and summer months.
If your agency pays stipends that exceed the federal limit for the specific county where your hospital is located, the excess allowance becomes taxable compensation subject to Maryland income tax. You can check current federal rate caps for any destination using our Per Diem Checker.
Frequently asked questions
Why do nonresidents pay a 2.25 percent county tax in Maryland?
Maryland imposes a special nonresident county tax of 2.25 percent on all Maryland-source income earned by individuals who do not reside in a specific Maryland county. This rate is added to the standard progressive state tax brackets.
Which states have tax reciprocity with Maryland?
Maryland maintains reciprocity agreements with Pennsylvania, Virginia, West Virginia, and Washington D.C. Commuters from these states pay income tax exclusively to their home jurisdiction by submitting Form MW507.
Are travel nurse stipends subject to Maryland state income tax?
Non-taxable per diems for lodging and meals paid under an accountable plan are exempt from Maryland state and county taxes, provided they stay within federal GSA rate caps.