Tens of thousands of federal and postal workers—and government retirees—live, work or once worked or lived in the state of Maryland. Its nickname, The Free State, came long before revenue-hungry counties started taxing and, in some cases, double-taxing, income earned in other places.

Lots of current and former feds’ ears perked up when they heard that the U.S. Supreme Court had ruled that Maryland counties—between 2006 and 2014—have been double-taxing some people. Lots of people. And it now owes them $200 million in refunds and interest.

More than a quarter-million current feds either live or work in Maryland. Many feds who live in Virginia, the District of Columbia, West Virginia. Delaware and Pennsylvania work in Maryland. Every day, thousands of Maryland residents cross the Potomac to jobs at the Pentagon or other federal installations in Virginia. Or they work in D.C. Bottom line, we get around. Hence, the infamous Beltway.

So the obvious question coming out of the ruling (Comptroller of Maryland v. Wynne) is this: What, if anything, is in it for me? And when do I get it? So…

We put the question to tax expert Bob Leins. He runs the National Institute of Transition Planning which helps prep feds for retirement. He said that, exciting as the ruling is, odds are it won’t help most of you. We asked him, “Does the Supreme Court decision have any impact on local feds?” His answer:

“Probably not, if a Maryland resident’s taxable income is solely from wages and/or retirement.”

“However, the Court’s decision MAY impact working and retired feds IF they live in Maryland AND have income generated outside of Maryland. Income generated outside of Maryland includes, but is not limited to, rental property, consulting income, interest in a small business during the years 2006 and 2014,” he continued. “If so, then the income from such income-producing property has to be enough to generate an income tax that was paid to a state (including D.C.) outside the state of Maryland.”

What about other states that double tax income? Some legal experts expect similar citizen challenges in New York, Pennsylvania and Indiana and as many as a dozen other revenue-hungry states.

Maryland tax laws have caused many businesses either to bypass it, or relocate to more tax-friendly states, like next-door neighbor Virginia.

The lawsuit was brought forward by a Maryland-based married couple, Brian and Karen Wynne, who said that paying income tax to one state, then again to their home county in Maryland, amounted to double taxation. The Washington Post said that the Supreme Court ruled in favor of the couple, finding that its law improperly penalized interstate commerce.

NEARLY USELESS FACTOID

By Dena Levitz

A full 38 percent of Maryland crab cakes surveyed across the region are mislabeled. Instead of the iconic blue crab, they contain imported crab from places as far away as Indonesia.

Source: Oceana

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Research conducted by Federally Employed Women shows that the lion’s share of the federal workforce lives outside of the District of Columbia proper.

Supreme Court strikes down Maryland tax law

The Supreme Court struck down as unconstitutional a Maryland tax that has the effect of double-taxing income residents earn in other states. Maryland officials say the 5-4 ruling means the loss of hundreds of millions of dollars in tax revenues.

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