When tax season rolls around, business owners have plenty of forms and deadlines to keep track of. For partnerships based in Maryland, understanding the Maryland partnership return due date is crucial. Filing late can mean penalties, missed opportunities for deductions, and compliance headaches. This blog will clarify when Maryland partnership returns are due, how to file, and what to do if you need more time, helping your business stay organized and fully compliant.
Understanding the Maryland Partnership Return
Before digging into deadlines, it helps to know exactly what is required. A “partnership” in Maryland includes general partnerships, limited partnerships (LPs), and limited liability partnerships (LLPs) conducting business in the state. Instead of paying income tax at the entity level, partnerships are typically pass-through entities. That means the business itself doesn’t pay Maryland income tax, but individual partners report their share of partnership income on their personal or corporate tax returns.
That said, Maryland requires all domestic and foreign partnerships doing business within the state to file a Maryland Form 510 (Pass-Through Entity Income Tax Return) each year. This form reports the partnership’s income, gains, losses, deductions, and credits.
Maryland Partnership Return Due Date
Key Deadline for Calendar Year Filers
For partnerships whose tax year matches the calendar year (ending December 31), the due date for filing Form 510 is March 15 following the close of the tax year. This aligns with the federal deadline for partnership returns (Form 1065), making it a one-two punch of tax compliance for business owners.
For example, a partnership’s 2023 tax year return is due March 15, 2024.
Fiscal Year Filers
Not all partnerships use the calendar year. If your partnership operates on a fiscal year (any 12-month period ending on the last day of any month except December), the Maryland partnership return is due on or before the 15th day of the third month after the close of the fiscal year.
Example: If your fiscal year ends June 30, your Maryland partnership return would be due by September 15.
What Happens If the Due Date Falls on a Weekend or Holiday?
If your due date falls on a Saturday, Sunday, or legal holiday, Maryland extends the filing deadline to the next business day.
Filing Your Maryland Partnership Return
Documents You’ll Need
- Maryland Form 510 (Pass-Through Entity Income Tax Return)
- Federal Form 1065 and Schedules K-1 (for reference; Maryland may ask for information from the federal partnership return)
- Partner identification and contact information
- Statements of income, deductions, and credits
How to File
Maryland offers both paper and electronic filing options for Form 510. However, electronic filing is strongly encouraged. Major tax software vendors support Form 510, and e-filing reduces error risk and speeds up processing.
Where to file:
- Paper returns go to the Comptroller of Maryland, Revenue Administration Division.
- E-filed returns are submitted through Maryland-approved software or designated e-filing portals.
State Pass-Through Entity Taxes
Maryland requires partnerships with nonresident partners to pay nonresident partner tax. This ensures that all income generated in Maryland is appropriately taxed, even if the partner lives in another state. The payment for nonresident partner tax is due at the same time as the partnership return.
Extensions for Maryland Partnership Returns
Can You Get More Time?
Yes. If you can’t file your Maryland partnership return by the due date, you can request an extension. Maryland will automatically grant a six-month extension to file, as long as you file the corresponding federal extension (Form 7004) or request one using Maryland Form 510E.
However, this is an extension to file, not to pay.
Any state taxes owed (including nonresident partner withholdings) are still due by the original due date. Failure to pay on time may incur penalties and interest.
How to Request an Extension
- Federal extension (Form 7004): If you request a federal extension, Maryland will honor it automatically for your partnership return.
- Maryland extension (Form 510E): For state-only extensions or if you want to ensure compliance, file Form 510E with the Comptroller’s office and pay any anticipated tax due by the original due date.
What If You Miss the Due Date?
Late filing or payment of partnership taxes in Maryland can lead to penalties and interest:
- Late filing penalty: Typically 5% of the tax due per month, up to a maximum of 25%.
- Interest: Accrued on any unpaid tax from the original due date, compounded monthly.
To avoid these headaches, note your deadlines carefully, set calendar reminders, and opt for electronic filing when possible.
Frequently Asked Questions
Do you need to file a Maryland partnership return if your partnership didn’t earn any income?
Yes. If your partnership is registered in Maryland or does business in the state, you must file Form 510, even if no income was earned. You can file a zero return.
How do nonresident partners pay their Maryland taxes?
The partnership must withhold and remit Maryland income tax on each nonresident partner’s share and report it on Form 510. Nonresident partners can still claim a credit for taxes paid on their individual state returns.
Are there any exceptions?
Some investment partnerships or those exempt under specific statutes may not need to file. Always check with a tax professional for unique situations.
Best Practices for Maryland Partnership Compliance
- Start early: Gather your team and financial statements well before the due date.
- Use professional software: Choose certified tax software to avoid calculation errors and missed fields.
- Keep records handy: Save copies of all submissions and confirmations for at least seven years in case of audit.
- Double check with state updates: Tax rules can change. Visit the Comptroller of Maryland’s website for up-to-date forms and guidance.
- Consult a tax professional: Especially with multi-state operations or unusual tax years, expert advice can save you time and money.
Stay Ahead of Maryland Tax Deadlines
Proactive planning is the best defense against penalties and stressful last-minute filings. Mark the Maryland partnership return due date on your calendar, keep clear records, and use extensions if needed (but pay what you owe by the original deadline). These steps will protect your business from unnecessary fees and allow you to focus on growth, confident that your compliance is in order.
If you find Maryland partnership compliance confusing, don’t hesitate to reach out to a qualified tax professional or the Comptroller’s help line. Being prepared helps you avoid costly mistakes and keep your partnership running smoothly.