2023
Maryland Employer
Reporting of 1099s
Instructions and
Specifications
October 2023
Revenue Administration Division
Annapolis, MD 21411-0001
Brooke Lierman, Comptroller
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2023
Maryland Employer
Reporting of 1099s
Instructions and
Specifications
October 2023
Revenue Administration Division
Annapolis, MD 21411-0001
Brooke Lierman, Comptroller
|
|
Table of Contents
Document Change Log .............................................................................................. 3
Introduction ................................................................................................................. 4
Filing Requirements for 1099 Reporting ........................................................... 4
Filers having 1099 statements should submit directly to Maryland. ........................... 4
Upcoming Changes and Enhancements .............................................................. 5
Maryland requests all 1099s be submitted directly to State of Maryland via SFTP.5
Maryland is not able to process files from IRS Combined Federal State Program. .. 5
File Specifications ...................................................................................................... 6
Updates for Tax Year 2023 ..................................................................................... 7
Reminders for Tax Year 2023 ................................................................................ 7
Most Common Errors to Avoid .............................................................................. 9
Record Format Rules .............................................................................................. 10
Maryland Record Layout Tax Year 2023 .......................................................... 11
“B” Record Modified for Maryland Reporting ................................................................. 11
Third-Party Vendor MW508 Reporting –Change to record specification
instructions ................................................................................................................ 12
Frequently Asked Questions ................................................................................ 13
2023 Maryland Employer Reporting of 1099 Instructions and Specifications, version 1.0
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Document Change Log
Date Page Description
10/28/2023 N/A • There are no record layout changes for Tax Year 2023
page 4, 5, 6 • Filing Deadline: January 31, 2023. All electronic filing is
14 to be submitted directly to Maryland via SFTP.
page 5 • Maryland is no longer accepting CD/Diskettes.
page 6 • File Specifications updated
page 8 • Reminders for Tax Year 2023 - added line 9
Maryland is not able to process 1099 files from the
IRS Combined Federal/State Filing Program
page 11 • Maryland Record Layout Tax Year 2023
page 12 • Third party Vendor Instructions
2023 Maryland Employer Reporting of 1099 Instructions and Specifications, version 1.0
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Introduction
Maryland law requires employers to submit their annual Withholding Reconciliation
electronically if the total number of 1099 statements meet or exceed 25. We encourage all
employers, regardless of the number of 1099s, to file electronically via SFTP directly to
Maryland.
The filing due date for 1099 statements/MW508 return is January 31st. If the due date falls
on a Saturday, Sunday, or legal holiday, it must be filed by the next business day.
The 2023 Maryland Reporting Instructions and Specifications Handbook for 1099s is designed to
be used as a companion to the IRS Publication 1220 Specifications for Electronic Filing of
Forms 1097, 1098, 1099, 3921, 3922, 5498, 8935 AND W-2G Tax Year 2023. Since many
functions of the Maryland employer-reporting program are similar to the IRS program, this
handbook highlights the special requirements of the Maryland program.
Filing Requirements for 1099 Reporting
Filers having 1099 statements should submit directly to Maryland.
All filings should be in the IRS format from Publication 1220 Specifications for Electronic Filing
of Forms 1097, 1098, 1099, 3921, 3922, 5498, 8935 AND W2-G.
Maryland requires a 1099-G, 1099-R, 1099-S and W-2G for every Maryland payee who receives a
payment of $10 or more during the tax year being reported.
Note: Maryland only requires a 1099-MISC and 1099-NEC from the payee (or employer)
when there is Maryland withholding greater than zero.
Failure to comply may result in a penalty of $100 for each violation. In addition, there could also
be a $50.00 penalty for each 1099 not filed. Failure to comply with Section 13-706 of the Tax-
General Article, Annotated Code of Maryland may result in the assessing of additional penalties.
Note: You may file 1099-K electronically via SFTP. Section 10-825 of the Maryland Tax-
General Article requires that 1099-K forms are required for payees who are “required to
file a return or declaration” under Part II of Subtitle 8 of the income tax title.
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Upcoming Changes and Enhancements
Maryland requests all 1099s be submitted directly to State of Maryland via SFTP.
Although Maryland is a participant of the Combined Federal State Filing Program,
Maryland is not able to process files from IRS Combined Federal State Program.
Note: The 1099 file must include the modified B record(s) containing the required Central
Registration Number (CRN) in positions 715-722.
Maryland is no longer accepting CD/Diskettes.
SFTP Instructions
Maryland will require 1099 text files to be placed at the Comptroller of Maryland secure server
by SFTP (Secure File Transfer Protocol), using one of the following two methods:
• Option 1: Manually upload to Comptroller of Maryland SFTP website
• Option 2: SFTP automated server to server transmission up to two IP address will be
required to be whitelisted with Comptroller, State of Maryland
Please email SecureTransmission@marylandtaxes.gov to obtain your SFTP Account info along with
instructions for setup if have not done so already. In the email, please provide the following:
• Point of Contact Email address
• Business Name
• Point of Contact Name
• Point of Contact Number
• Business choice of (SFTP) either Option 1 or Option 2 or both
• No more than two IP Addresses if choosing Option 2
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File Specifications
The Maryland Revenue Administration Division uses the following criteria:
• When filing via SFTP, please follow the naming conventions in the SFTP instructions sent to
you in email when you request SFTP access.
• Data must be uppercase letters in ASCII.
• Inspect the file prior to verify that each record type (T, A, B, C, K, F) starts on a new row.
• File should include record delimiters (CR- Carriage Return followed by LF –Line Feed). Each
record delimiter must consist of a carriage-return/linefeed (CR/LF) and placed immediately
following position 750. Do not place a record delimiter before the first record (T) of the file.
• Multiple companies (different FEINS) can be submitted within one file. Be sure to repeat each
set of record types (T, A, B, C, K, F) in this sequence for each company.
• Single companies (same FEIN) can be submitted with one set of record types (T,A,B,C,K,F) in
one file.
• Files do not need to be zipped when filing via SFTP.
• B Record Requirements
o Cols 1-5 should always contain B2022 ‘ ’= B record with Tax Year to be selected for
processing
o Cols 701-712 should always contain zeros = ‘ 000000000000 ’
o Cols 713-714 should always continue spaces = ‘ ‘
o Cols 715-722 containing the required Maryland Central Registration Number (CRN) in
positions 715-722 that was giving by the Central Registration Department using the following
link if your company does not have one. See page 11
o Cols 735-746 should always contain zeros = ‘ 000000000000 ’
o Cols 747-748 should always be ‘ 24 ’ for Maryland State code = 24
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Updates for Tax Year 2023
Starting in tax year 2021 and going forward, the IRS has removed reporting for nonemployee
compensation from Form 1099-MISC, box 7 to Form 1099-NEC. Maryland will follow the IRS
guidelines for reporting of nonemployee compensation. Information for submitting this
information can be found online at https://www.irs.gov/pub/irs-pdf/i1099mec.pdf or in the IRS
Publication 1220.
Please keep in mind that the following:
Maryland only requires a 1099-MISC and 1099-NEC from the payee (or employer) when
there is Maryland withholding greater than zero.
Reminders for Tax Year 2023
1. The filing due date for 1099 wage/tax statements is January 31 .st
2. It is a requirement to provide the Federal Employer Identification Number (FEIN) and the
corresponding Central Registration Number (CRN) in positions 715-722 of the B record. Not
providing this information will either delay the processing time or will be cause for the file to
be rejected.
3. Amounts reported on a paper Form MW508 are for paper submission only; if you are
providing additional submissions electronically, exclude that which was reported on paper.
Duplicate filings create a bill, erroneous balance due notices and/or penalty notices for the
empoyer.
4. If you outsource your payroll, please provide the CORRECT Federal Employer Identification
Number (FEIN) and the Maryland Central Registration Number (CRN).
5. Maryland is no longer accepting CD/Diskettes/Flash thumb
drives.
6. The Comptroller of Maryland requires a 1099-G, 1099-R, 1099-S, and a W-2G Form for
every Maryland payee that receives a payment of $10 or more during the tax year being
reported.
7. Maryland only requires a 1099-MISC and 1099-NEC from the payee (or employer) when
there is Maryland withholding greater than zero.
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8. If the payer (employer, organization, etc.) should withhold state taxes that are reported on a
1099-MISC for Maryland payee(s), then the 1099-MISC should be included in the payer's
annual reconciliation for the tax year reported. If there is no 1099-MISC Maryland
withholding, then there is no need to submit this 1099-MISC information to the state. This is
also true for the Form 1099-NEC.
9. Maryland is not able to process 1099 files from the IRS Combined Federal/State Filing
Program. The following resources are available:
a. The IRS format from Publication 1220, Specifications for Electronic Filing of Forms 1097,
1098, 1099, 3921, 3922, 5498, 8935 and W-2G
b. This 2023 Maryland Employer of 1099 Instructions and Specifications,
Section: “B” Record Modified for Maryland Reporting
10. Each tax year must be submitted in a separate electronic file.
11. Scanned, PDF, PNG, TIF, GIF, JPG, Word, Excel formats will not be accepted.
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Most Common Errors to Avoid
• Failure to include the “ ”A record.
• Failure to include the Federal Employer Identification Number (FEIN) on the “A” record,
position 12.
• Failure to modify the B record to include the required Central Registration Number (CRN) in
positions 715-722 or failure to place the required Central Registration Number in the
correct location.
• Failure to include the “C” record containing the MW508 information.
• Using the Unemployment Insurance number (10 digits) instead of the Maryland Central
Registration number (8 digits).
• Using the FEIN instead of the Maryland Central Registration number.
• Sending file formats of PDF, MSWord, PNG, TIF, GIF, JPG, or Excel 1099 files via SFTP are not
acceptable formats. This will result in a failed submission and may cause erroneous balance
due notices and/or penalty notices.
• Failure to include record delimiters (CR- Carriage Return followed by LF –Line Feed). Each
record delimiter must consist of a carriage-return/linefeed (CR/LF) and placed immediately
following position 750.
• Failure to verify each record type (T, A, B, C, K, F) starts on a new row.
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Record Format Rules
All fields in the record layouts are required and must follow the formatting rules as follows:
Alpha fields (Alphabetic characters and blanks only)
• Left-justify and fill with blanks.
Numeric fields (Numeric characters only)
• Right-justify and fill with zeroes.
• Fill unused fields with zeroes.
Alpha/numeric fields (Alphabetic, numeric and blanks are allowed)
• Left-justify and fill with blanks.
• Fill unused fields with blanks.
Money fields
• Must contain only numbers.
• No punctuation.
• No signed amounts (high-order signed or low-order signed).
• Include both dollars and cents with the decimal point assumed (example: $59.60 =
000000005960).
• Do not round to the nearest dollar (example: $5,500.99 = 000000550099).
• Right-justify and zero fill to the left.
• Any money field that has no amount to be reported must be filled with zeroes.
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Maryland Record Layout Tax Year 2023
The 2023 Maryland 1099 record layout is the only acceptable format for both current and back-
year electronic submissions of 1099s.
1099 Filers must include the required Central Registration Number in positions 715 –722
of the modified “B” record prior to electronic submissions to Comptroller, State of
Maryland or to IRS Combined Federal/State filing program.
Note: Maryland only requires a 1099-MISC and 1099-NEC from the payee (or employer)
when there is Maryland withholding greater than zero.
• Please follow the file naming conventions specified in the SFTP instructions received.
• The required records are:
“T” Transmitter Record (Same as IRS)
“A” Payer Record (Same as IRS)
“B” Payee Record (Modified, record description below)
“C” End of Payer Record (Same as IRS)
“K” Use for Combined Federal/State Filing Program (Same as IRS)
“ ”F End of File Record (Same as IRS)
“B” Record Modified for Maryland Reporting
FIELD FIELD NAME FIELD FIELD TYPE FIELD DESCRIPTION
POSITION LENGTH
1-700 Same as IRS 700 ALPHA NUMERIC Required. Same as IRS.
701-712 Maryland State Pickup 12 NUMERIC For use by Maryland State
Retirement System. Right
justify and fill with zeros.
713-714 Filler 2 ALPHA NUMERIC Maryland does not use this
field. Space filled
715-722 Maryland Central 8 NUMERIC Required. Eight-digit
Registration Number Maryland Central
Registration Number (Tax
Withholding Account
Number)
723-734 Maryland State Income 12 NUMERIC Required.
Tax Withheld Total of state and local
taxes withheld must be
added together.
Do not report separately.
Right justify and fill with
zeroes
735-746 Filler 12 ALPHA NUMERIC Maryland does not use this
field. Right justify and fill
with zeros
747-748 Combined 2 NUMERIC Constant “24” for Maryland.
Federal/State Code
749-750 Same as IRS 2 ALPHA NUMERIC Required. Same as IRS.
750
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Third-Party Vendor MW508 Reporting –Change to record specification
instructions
If you are not able to meet these required changes, please email us at:
efile_w2_1099_help@marylandtaxes.gov for other options.
The Arecord field:
Field:Issuer Taxpayer Identification Number (TIN), column12 – 20, should indicate the FEIN
registered with the state of Maryland (withholding tax payments must have been made to this FEIN
and it must be an account registered with the State of Maryland).
DO NOT list the Company TIN/FEIN if it is not the registered withholding account with State of
Maryland.
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Frequently Asked Questions
What is the Maryland Central Registration number?
The Central Registration number is an eight-digit number assigned by Maryland when you open a
state withholding account.
How can I confirm an employer’s Maryland Central Registration number?
You may contact Taxpayer Service by telephone at 410-260-7980 from Central Maryland, or 1-
800-638-2937; by e-mail at taxhelp@comp.state.md.us. Be prepared to provide the following
information: Federal Employer Identification Number (FEIN), name of company, as well as name
and phone number of the person inquiring.
Who can file paper information returns?
Employers having less than 25 1099s to submit may send a paper Form MW508 with paper copies of
the 1099s to:
Revenue Administration Division
ATTN: Returns Processing, Room 206
110 Carroll Street
Annapolis, MD 21411-0001
Can I file my corrections via SFTP?
No, we cannot process corrected or amended 1099s and MW508s file(s) via SFTP. All corrected and
amended 1099s and MW508s must be submitted on a paper MW508A to the address above.
What if I file both paper returns and electronic files via SFTP?
You are allowed to submit by paper (less than 25) and electronically via SFTP as long as you Do
not duplicate information between both submissions: electronic and paper.
Am I required to submit a test file?
No, test files are not required, but are encouraged. This will validate proper format and identify
problems before the return is filed, avoiding delays in processing.
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Is there a filing deadline?
The filing deadline for submitting the MW508 return and 1099s is January 31 . stIf the due date
falls on a Saturday, Sunday or legal holiday, the statements must be filed the next business day.
Can I file back-year data?
Yes. Maryland can process all back-year data. All data must be presented in the current year
format and the tax year must be properly entered in the “A” record.
How do I request a waiver of Electronic filing requirement?
To request a waiver of the requirement to file electronically when the minimum filing threshold
meet or exceed 25, you should send a written request stating the nature of the hardship. All
request for waiver should be emailed to efile_W2_1099_help@marylandtaxes.gov.
Will I be penalized for not filing electronically when required?
Employers failing to file electronically the annual reconciliation may incur a penalty of $100 for
each violation. In addition, there could also be a $50.00 penalty for each 1099 not filed. Failure
to comply with Section 13-706 of the Tax General Article, Annotated Code of Maryland may result
in the assessing of additional penalties.
Where do we send paper submissions (less than 25 1099s) ?
Revenue Administration Division
ATTN: Returns Processing Unit, Room 206
110 Carroll Street
Annapolis, MD 21411-0001
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