(a) In this Part II of this subtitle the following words have the meanings indicated. (a-1) "Annuity, sick pay, or retirement distribution" means: (1) an annuity or sick pay payment described in § 3402(o) of the Internal Revenue Code; or (2) a designated distribution as defined in § 3405(e) of the Internal Revenue Code other than an eligible rollover distribution within the meaning of § 3405(c) of the Internal Revenue Code. (b) (1) "Employer" has the meaning stated in § 3401 of the Internal Revenue Code. (2) "Employer" includes: (i) the federal government; (ii) the State; (iii) a county, municipal corporation, political subdivision, or instrumentality of the State; (iv) another state to the extent that functions of its government are carried on or performed in this State; and (v) if the employer is a corporation: 1. any officer of the corporation who exercises direct control over its fiscal management; and 2. any agent of the corporation who has a duty to withhold income tax from wages. (c) "Payment subject to withholding" means: (1) an annuity, sick pay, or retirement distribution; (2) income that is subject to the income tax and is distributed by a fiduciary to a nonresident alien; (3) a payment of winnings derived from wagering in the State if the payment is subject to withholding under § 3402 of the Internal Revenue Code; and (4) a payment of a death benefit by the Board of Trustees of the State Retirement and Pension System. (d) (1) "Payor" means a person responsible to make a payment subject to withholding. (2) "Payor" includes: (i) the federal government; (ii) the State; (iii) a county, municipal corporation, political subdivision, or instrumentality of the State; (iv) another state to the extent that functions of its government are carried on or performed in this State; and (v) if the payor is a corporation: 1. any officer of the corporation who exercises direct control over its fiscal management; and 2. any agent of the corporation who has a duty to withhold income tax from payments subject to withholding. (e) "Wagering" includes: (1) any lottery, including the State lottery; and (2) any pari-mutuel wagering, including any pari-mutuel wagering conducted under Title 11 of the Business Regulation Article. (f) (1) Except as provided in paragraph (2) of this subsection, "wages" means salary, wages, or compensation for personal services of any kind as defined in §§ 3401 and 3402(o)(2)(A) of the Internal Revenue Code. (2) "Wages" includes remuneration paid for services described in § 3401(a)(5) and (6) of the Internal Revenue Code. (g) "Withhold" includes deducting income tax. §10-906. IN EFFECT (a) Except as provided in § 10-907 of this subtitle, each employer or payor shall: (1) withhold the income tax required to be withheld under § 10-908 of this subtitle; and (2) pay to the Comptroller the income tax withheld for a period with the withholding return that covers the period. (b) Any income tax withheld is deemed to be held in trust for the State by the employer or payor who withholds the tax. (c) An employer or payor who withholds income tax shall keep a separate ledger account for withholdings that indicates clearly: (1) the amount of income tax withheld; and (2) that the income tax withheld is the property of the State. (d) If an employer or payor negligently fails to withhold or to pay income tax in accordance with subsection (a) of this section, personal liability for that income tax extends: (1) to the employer or payor; (2) if the employer or payor is a corporation, to: (i) any officer of the corporation who exercises direct control over its fiscal management; or (ii) any agent of the corporation who is required to withhold and pay the income tax; and (3) if the employer or payor is a limited liability company as defined under Title 4A of the Corporations and Associations Article or a limited liability partnership as defined under Title 9A of the Corporations and Associations Article, including a limited partnership registered as a limited liability limited partnership, to: (i) any person who exercises direct control over its fiscal management; and (ii) any agent of the limited liability company or limited liability partnership who is required to withhold and pay the income tax. §10-906. ** TAKES EFFECT OCTOBER 1, 2026 PER CHAPTERS 198 AND 199 OF 2025 ** (a) Except as provided in § 10-907 of this subtitle, each employer or payor shall: (1) withhold the income tax required to be withheld under § 10-908 of this subtitle; and (2) pay to the Comptroller the income tax withheld for a period with the withholding return that covers the period. (b) Any income tax withheld is deemed to be held in trust for the State by the employer or payor who withholds the tax. (c) An employer or payor who withholds income tax shall keep a separate ledger account for withholdings that indicates clearly: (1) the amount of income tax withheld; and (2) that the income tax withheld is the property of the State. (d) If an employer or payor negligently fails to withhold or to pay income tax in accordance with subsection (a) of this section, personal liability for that income tax extends: (1) to the employer or payor; (2) if the employer or payor is a corporation, to: (i) any officer of the corporation who exercises direct control over its fiscal management; or (ii) any agent of the corporation who is required to withhold and pay the income tax; and (3) if the employer or payor is a limited liability company as defined under Title 4A of the Corporations and Associations Article, including a limited worker cooperative association or a collective worker cooperative, or a limited liability partnership as defined under Title 9A of the Corporations and Associations Article, including a limited partnership registered as a limited liability limited partnership, to: (i) any person who exercises direct control over its fiscal management; and (ii) any agent of the limited liability company or limited liability partnership who is required to withhold and pay the income tax.
‹ Prev All Maryland sections Next ›
Lexace provides legal information, not legal advice, and no attorney–client relationship is created. Statute text is provided for general information and may not reflect the most recent amendments; verify against the official state code.