Tax withholding exemption helps employers & employees
ANNAPOLIS, MD (May 17, 2004)-Maryland Comptroller William Donald Schaefer today reminded summer job seekers, part-time employees and other workers that they may be able to save money by claiming a special exemption on the tax withholding forms they complete for their employer. "This could help many of the estimated 136,000 folks working in Maryland's fast food outlets, cafeterias and restaurants who expect to earn less than $7,950 this year," said Comptroller Schaefer.
Under Maryland law, single taxpayers under 65 years of age are not required to file a Maryland tax return unless they receive more than $7,950 in income during 2004. Eligible employees can avoid having state and local income taxes withheld from their pay unnecessarily by claiming the exemption on line 3 of Form MW507
The form is available from employers and can also be downloaded from the Comptroller's Web site at www.marylandtaxes.com.
"Lots of folks who work only during the summer may earn far less than $7,950," said Comptroller Schaefer. "By claiming this exemption, a minimum wage worker who works during most of the summer can actually pick up the equivalent of an extra paycheck"
Part-time employees who work year-round and earn the minimum wage of $5.15 per hour are also generally eligible for the exemption, even if they work up to 32 hours per week.
The Comptroller noted that businesses benefit from the exemption since it allows employers to give their part-time workers a 'raise' at no cost - by not withholding Maryland income tax. "Employers also have fewer payroll accounts to reconcile," said Comptroller Schaefer.
Businesses and employees seeking more information about the exemption can call 410-260-7980 in Central Maryland or 1-800-MD TAXES from elsewhere, Monday through Friday, 8:00 a.m. - 5:00 p.m.
According to the Maryland Department of Labor, Licensing and Regulation, the estimated 136,300 individuals currently employed in the state's food service industry include 28,000 waiters and waitresses; 62,000 fast food workers; 13,000 restaurant cooks; 5,000 cafeteria and concession workers; 7,000 dining room helpers and 11,000 dishwashers.