The Comptroller of Maryland offers several payment options for individuals who have a state tax debt they cannot afford to pay in full. After filing a return and paying the initial balance due, taxpayers receive an income tax notice containing available arrangements for settlement of their debt. If the monthly payments required to settle their debt are outside their budget, taxpayers may file an appeal to have their debt reduced.
Individuals can make their payment by cash, check, money order or credit card. They can also set up a recurring payment agreement that withdraws the predetermined amount from their bank account on a specific day each month. Those who prefer to pay via online banking may utilize the Maryland tax connect portal. This service is free to use, but requires that you become a registered user of the system.
Business owners who owe back taxes may be able to get an installment agreement with the state. However, if the debt is large enough, they may be required to pay 25% of the total debt in upfront down payment. A representative in the business collections section must review and approve any payment plan that is longer than six months.
In some cases, the state is willing to waive penalties and interest on back sales tax liabilities if they can prove that the taxpayer is in financial hardship and the circumstances were out of their control. This is called penalty abatement. However, this arrangement is usually not a good idea for operating businesses and should be considered as a last resort.
Maryland Tax Connect Portal
Using the Maryland Tax Connect Portal is simple, convenient, and secure. The online portal allows you to pay state tax using your bank account or credit card. The online service is also mobile-optimized, meaning that it can be used on any Internet-connected device, including smartphones and tablets.
Individuals who owe back taxes can use the online system to create an individual tax repayment plan. To set up the repayment plan, you will need a notice number from one of the notices you received from the state tax department. Once you have the notice number, you can access Maryland’s Individual Taxpayer Online Service Center.
The tax repayment program can help taxpayers resolve their tax debts and avoid negative consequences. However, it is important to note that merely entering into a tax repayment plan does not stop the Comptroller from taking further collection action. If you miss a payment, the Comptroller may cancel your tax repayment plan and begin to apply substantial interest and penalties to your outstanding balance.
Getting caught up on back taxes is important for both individuals and businesses. If you are an individual, failing to pay your MD taxes could cause you to be unable to renew your driver’s license or register your vehicles. You should contact a tax professional to discuss your options to avoid such consequences.