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REMOTE EMPLOYEES

Hiring a remote employee in Maryland

Your company is in another state and one employee lives and works from home in Maryland. Which state's taxes apply, unemployment, paid leave and Maryland's employer rules, each with its official source.

Facts checked on October 5, 2026 against the official sources listed at the end of this page. For employers. General information, not legal or tax advice: confirm a rule with the agency before you rely on it.

Maryland at a glance

Income tax
Maryland withholding
Reciprocity
With District of Columbia, Pennsylvania, Virginia and West Virginia
Unemployment
$8,500 wage base, 1% to 2.6% new employer
Paid leave
Maryland Family and Medical Leave Insurance (FAMLI)
New hire report
Within 20 days

Which state's taxes apply

Work state
Maryland taxes wages for work done in Maryland. Withhold Maryland income tax on the employee's wages.Source: Comptroller of Maryland, Maryland Employer Withholding Guide, effective January 2026 (revised December 2025, PDF) (opens in a new tab), checked October 5, 2026
Withholding form
Form MW507Source: Comptroller of Maryland, Form MW507, Employee's Maryland Withholding Exemption Certificate (2026, PDF) (opens in a new tab), checked October 5, 2026
Reciprocity
If your office is in the District of Columbia: Maryland residents working there are withheld for Maryland, with District of Columbia's exemption certificate. If your office is in Pennsylvania: Maryland residents working there are withheld for Maryland, with REV-419, Employee's Nonwithholding Application Certificate. If your office is in Virginia: Maryland residents working there are withheld for Maryland, with Form VA-4, line 3 (condition d). If your office is in West Virginia: Maryland residents working there are withheld for Maryland, with WV/IT-104NR.Source: Comptroller of Maryland, Form MW507, Employee's Maryland Withholding Exemption Certificate (2026, PDF) (opens in a new tab), checked October 5, 2026; PA Department of Revenue, PA Personal Income Tax Guide: Gross Compensation (opens in a new tab), checked October 5, 2026; Virginia Tax, Form VA-4, Employee's Virginia Income Tax Withholding Exemption Certificate (Rev. 04/26, PDF) (opens in a new tab), checked October 5, 2026; West Virginia Tax Division, WV IT-104 Employee's Withholding Exemption Certificate and WV/IT-104NR Certificate of Nonresidence (Rev. 03/2023, PDF) (opens in a new tab), checked October 5, 2026
Convenience rules
If your company is in Delaware or New York, the employee is assigned to an office there and works there on some days, that state taxes the days worked from home in Maryland for the employee's convenience.Source: Delaware Division of Revenue, 2025 Form PIT-NON Instructions, Non-Resident Individual Income Tax Return (PDF) (opens in a new tab), checked October 6, 2026; NYS DTF, TSB-M-06(5)I, New York Tax Treatment of Nonresidents and Part-Year Residents: Application of the Convenience of the Employer Test to Telecommuters and Others (May 15, 2006, PDF) (opens in a new tab), checked October 6, 2026
Office days in your company's state
That state's day limit, if it has one, decides whether it withholds on those days: see its page, or the helper below.
An employee from another state working in Maryland
Maryland sets no day count before a nonresident's wages for work there are withheld.Source: Comptroller of Maryland, Maryland Employer Withholding Guide (effective January 2026, PDF) (opens in a new tab), checked October 6, 2026

Where to withhold: two states

Pick your company's state, the state where the employee lives and works from home, and the days a year the employee works at your office. The answer reads each state's rules from the data on these pages.

Your company is in
Employee lives and works from home in
Days a year at your office
Assigned to an employer office in New YorkMatters only in the states with a convenience rule (Connecticut, Delaware, New Jersey, New York and Pennsylvania), and only with office days there.

Income tax withholding

  • Maryland: all wages.

No New York withholding: the employee does no work in New York.

Unemployment

Maryland: the employee works from home there, so the work is localized in Maryland.

Simplified: resident credits, dollar tests, local taxes and a move during the year are not worked out here. Each state's rule and its source are on its page.

Unemployment

The employee works from home in Maryland, so the work is localized in Maryland: pay Maryland unemployment tax, not your company state's.

Agency
Maryland Department of Labor, Division of Unemployment InsuranceSource: Maryland Department of Labor, Employers and Third-Party Agents (opens in a new tab), checked October 5, 2026
Wage base
$8,500 Fixed by lawSource: Maryland Department of Labor, Tax Rates and Quarterly Reporting (opens in a new tab), checked October 5, 2026
New employer rate
1% to 2.6% 1.0% to 2.6%: the highest of 1%, the state's 5-year benefit cost rate or the table rate for a 0.0000 benefit ratio, capped at 2.6%. Out-of-state construction contractors pay the Maryland construction industry average, not below the new employer rate. Surcharges includedSource: Maryland Department of Labor, Tax Rates and Quarterly Reporting (opens in a new tab), checked October 5, 2026

Open the account: Maryland payroll tax registration

Maryland Family and Medical Leave Insurance (FAMLI) (opens in a new tab)

Status
Contributions start January 1, 2027Source: Maryland FAMLI, FAQs: Contributions (April 2026, PDF) (opens in a new tab), checked October 5, 2026
Total rate
0.9%Source: Maryland FAMLI, FAQs: Contributions (April 2026, PDF) (opens in a new tab), checked October 5, 2026
Employee share
Up to 0.45%Source: Maryland FAMLI, FAQs: Contributions (April 2026, PDF) (opens in a new tab), checked October 5, 2026
Employer share
0.45%Source: Maryland FAMLI, Make contributions (opens in a new tab), checked October 5, 2026
Small employers
14 or fewer employees, counted in all states: no employer share Counted under one EIN, in and outside Maryland, contractors excluded: each quarter until a full year of reports, then the 4-quarter averageSource: Maryland FAMLI, FAQs: Contributions (April 2026, PDF) (opens in a new tab), checked October 5, 2026

Register before the first payroll: the steps are on Maryland payroll tax registration.

Maryland employer rules

Employment law applies where the employee works, so these follow the employee into Maryland.

Final pay
Fired: By the regular payday on which the wages would have been paid Quit: Same as firedSource: Maryland Code, Labor and Employment §3-505, Payment on termination of employment (opens in a new tab), checked October 6, 2026
Pay frequency
At least once every 2 weeks or twice a month on regular pay periods; administrative, executive and professional employees may be paid less often.Source: Maryland Code, Labor and Employment §3-502, Payment of wages (opens in a new tab), checked October 6, 2026
Pay notice
In writing at hire: rate of pay, regular paydays and leave benefits. At least 1 pay period's notice of any change in payday or wage (a raise needs none). A pay statement every pay period.Source: Md. Code, Labor and Employment 3-504 (opens in a new tab), checked October 5, 2026
New hire reporting
Within 20 days of the start date.Source: Maryland Department of Labor, Reporting Systems (Maryland State Directory of New Hires) (opens in a new tab), checked October 5, 2026
E-Verify
No state E-Verify mandate for private employers or State contractors. Bills to require it of State contractors and grantees failed each year from 2009 to 2013.Source: Maryland General Assembly, Department of Legislative Services, Fiscal and Policy Note, HB 317 (2013), State Government - E-Verify Program (PDF) (opens in a new tab), checked October 5, 2026
Sick leave
Paid sick leave required, from 15 employees, counted in Maryland. Unpaid sick leave required, from the first employee.Source: Maryland Department of Labor, Maryland Healthy Working Families Act (Sick and Safe Leave) (opens in a new tab), checked October 5, 2026

When the employee moves

Re-check the work state and the registrations before the next payroll: a move changes which state's withholding, unemployment, paid leave and employer rules apply.

Registering your business in Maryland, and whether one remote employee creates tax nexus for your company, are separate questions this page does not cover.

More on Maryland

WORKLIO HCM

Payroll for employees who work from home in another state

Worklio HCM withholds by home and work state, reciprocity included, and handles city and county taxes. We help open state withholding and unemployment accounts when you hire somewhere new, and our registration service can register your employer tax accounts for you. Taxes are calculated, deposited and filed in every state and locality, and when an agency notice arrives, you upload it and our tax team resolves it.

Remote employees in other states

Sources

The agency page or document behind each fact, as checked.

General information, not legal or tax advice. Rules change; confirm current requirements with the relevant agency or your advisor. You remain responsible for your employment taxes and for each state's rules.

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