Maryland State Tax Installment Agreement

Maryland State Tax Installment Agreement: How to Get One for Your Tax Debt

If you owe state tax in Maryland and cannot pay the full amount owed upfront, you may be eligible for a Maryland State Tax Installment Agreement. This is a payment plan that allows you to pay off your tax debt in smaller, more manageable monthly payments. In this article, we’ll go over the eligibility requirements for this program and the steps to take to apply.

Eligibility for a Maryland State Tax Installment Agreement

To be eligible for a Maryland State Tax Installment Agreement, you must:

1. Owe at least $500 in state tax.

2. Have filed all required tax returns.

3. Not have an open bankruptcy case.

4. Agree to pay all future tax liabilities on time.

If you meet these eligibility requirements, you can apply for a Maryland State Tax Installment Agreement.

Applying for a Maryland State Tax Installment Agreement

To apply for a Maryland State Tax Installment Agreement, you must:

1. Complete Form 502D, the Request for Installment Payment Plan.

2. Attach a copy of your most recent federal income tax return to the form.

3. Indicate on the form the amount you can pay each month and the date you can make the first payment.

4. Mail the completed form and supporting documents to the address provided on the form.

5. Wait for the Maryland Comptroller’s Office to review your application.

If your application is approved, you will receive a notice in the mail with the terms of the agreement. The notice will include the amount of each monthly payment, the due date for each payment, and the total amount you will pay over the life of the agreement. You must make the monthly payments on time or risk defaulting on the agreement.

Benefits of a Maryland State Tax Installment Agreement

There are several benefits to entering into a Maryland State Tax Installment Agreement:

1. You can pay off your tax debt in smaller, more manageable monthly payments.

2. You can avoid collection actions, such as wage garnishments, bank levies, and liens.

3. You can avoid additional penalties and interest on your tax debt.

4. You can maintain your credit score by avoiding a tax lien on your credit report.

Conclusion

If you owe state tax in Maryland and cannot pay the full amount owed upfront, a Maryland State Tax Installment Agreement may be a good option for you. Eligibility requirements are straightforward, and the application process is simple. If approved, you can pay off your tax debt in smaller, manageable monthly payments and avoid collection actions and additional penalties and interest.