MW506AE is the Comptroller of Maryland application that a nonresident individual or entity files to request a certificate of full or partial exemption from withholding on the sale of Maryland real property and associated personal property. A separate form is generally needed for each seller, and it must be received at least 21 days before the closing date. On this page you can fill out the form online on FillingPDF and download or print the completed PDF; the Comptroller publishes the original form and its instructions at marylandcomptroller.gov.
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What is MW506AE?
Form MW506AE, Application for Certificate of Full or Partial Exemption (2026), is the Comptroller of Maryland form that nonresident sellers use to apply for a certificate exempting some or all of the proceeds of a Maryland real property sale from withholding.
According to the Comptroller's instructions, the form applies to the sale of real property and associated personal property in Maryland by nonresident individuals and nonresident entities. A nonresident entity is one that is not formed under Maryland law and is not qualified by or registered with the Department of Assessments and Taxation to do business in Maryland.
Page 1 holds the seller's information, the property description, the closing date and a Calculation of Tentative Exemption (lines 1 through 10): purchase price or inherited value, capital improvements, settlement expenses, depreciation, adjusted basis, contract sales price, the amount subject to tax and the tentative withholding amount. Page 2 lists Special Situations, such as a principal residence, a §1031 tax-free exchange, an installment sale under §453, inherited property sold within 1 year of the date of death, or a transfer under a specific Internal Revenue Code section listed in the addendum.
The tentative amount is not final. The Comptroller recalculates it from the documents received and the amounts substantiated, and its decision to issue or deny a certificate, and the amount, is final and not subject to appeal. Sellers using a relocation company also complete the MW506AE – Relo Addendum.
Who needs to file MW506AE?
Nonresident sellers of Maryland real property use Form MW506AE when they want a certificate of full or partial exemption from the withholding requirements on the sale proceeds. The instructions say an individual, fiduciary, C corporation, S corporation, limited liability company or partnership transferor/seller may file.
- One form per seller. Unless the sellers are spouses filing a joint Maryland income tax return, each transferor/seller needs a separate Form MW506AE. Enter the seller's own ownership percentage; for four equal owners, for example, enter 25%.
- Sellers through a relocation company. Complete the MW506AE – Relo Addendum and attach it to the application.
- Rental or commercial property. If you check the rental/commercial box and have not filed the nonresident income tax returns reporting that income or loss, the application will be denied. File those returns first.
- Who signs. An individual (both spouses on a joint Maryland income tax return) or a responsible corporate officer signs. If a power of attorney is needed, complete Maryland Form 548 and attach it.
The form covers nonresident sellers only; the instructions do not extend it to Maryland-resident sellers.
When to file MW506AE
The completed Form MW506AE and all required documentation must be received by the Comptroller of Maryland no later than 21 days before the closing date of the sale or transfer. The form repeats this on its first page. Applications with no closing date will not be processed, so enter the date of closing in mm/dd/2026 format.
If a preliminary settlement statement is not available when you file, forward it as soon as it is completed so that the settlement costs on line 3 can be credited; the settlement agent can provide it. If the property was ever used as a rental or commercial property, file all required income tax returns before you send this application. The instructions give no processing time. Use the Comptroller's contact details under How to submit for questions.
Documents you need
- Line 1: settlement statement, property tax printout, original contract, date of death appraisal or other proof of the original purchase price or inherited value.
- Line 2, only if you claim capital improvements: paid invoices or receipts with cancelled checks showing proof of payment, property address and work completed.
- Line 3: a settlement statement for the original purchase and, for the pending sale, a preliminary closing disclosure or preliminary settlement statement; forward the preliminary one when ready if it is not available at filing.
- Line 5, if the property was rental or commercial: a depreciation schedule or the returns showing the depreciation already taken.
- Line 7: the current contract (page 1 and signature pages only) or a preliminary settlement statement.
- Principal Residence – Active-duty Military, Certain Government Employees: transfer orders and proof of residency, such as a federal return with a Maryland address, utility bills or property tax statements.
- Tax-Free Exchange under §1031: a letter signed by the qualified intermediary stating the transferor(s), property description, the §1031 role, and whether there is boot and its amount; proof of payment if the withholding was paid out-of-pocket.
- Zero proceeds: a copy of the seller's letter to the title company naming who receives the proceeds, and the title company's acknowledgment letter.
- Installment sale under §453: the contract of sale or settlement sheet, and a copy of the promissory note to be executed by the transferee at settlement.
- Inherited property within 1 year of date of death: a copy of the death certificate and the title company's estimated settlement sheet.
- IRA custodian as seller: the preliminary settlement sheet, the custodian's Certificate of Good Standing from its state of incorporation, and a title company letter that all proceeds go to the custodian.
- Specific Internal Revenue Code section (addendum codes a through i): the documents the addendum lists for that section, such as agreements, Certificates of Good Standing, affidavits or appraisals.
- Maryland Form 548, only if a power of attorney is necessary.
- MW506AE – Relo Addendum, only if you are selling through a relocation company.
How to fill out MW506AE
Enter the seller's identity
Enter your Social Security number (or ITIN, if the IRS issued one) and name; add spouse details if you file jointly. For an entity, enter its name, T/A or C/O or Fiduciary, and Federal Employer Identification Number, then the present address.
Mark entity type and ownership
Check the transferor/seller's entity type (Individual/Estate/Trust or Business) and enter your ownership percentage of the property.
Describe the property and closing date
Enter the street address and county as listed with SDAT, or the full property account ID numbers if there is no street address. Enter the date of closing in mm/dd/2026 format; it is required.
Answer the rental question
Check Yes or No for whether the property was ever used as a rental or commercial property. If Yes, enter the FROM and TO dates in mm/dd/yyyy format.
Complete lines 1 through 4
Line 1 is the purchase price or inherited value, line 2 optional documented capital improvements, line 3 settlement expenses (3a original purchase, 3b pending sale). Line 4 adds lines 1 through 3.
Figure depreciation and adjusted basis
Line 5: enter depreciation already taken for rental or commercial use on any income tax return. Line 6: subtract line 5 from line 4 to get your adjusted basis.
Enter the sales price and taxable amount
Line 7: contract sales price. Line 8a: subtract line 6 from line 7. Line 8b: multiply line 8a by your ownership percentage (1.00, .50, .333, etc.).
Select the tax rate and tentative amount
Line 9: check the box for individual or business. Line 10: multiply line 8b by the applicable rate; enter zero if the result is zero or less.
Check any Special Situation
On page 2, enter the seller's name and Social Security number/FEIN and check the box that applies, if any. If none apply, the exemption rests only on the page 1 worksheet.
Add the settlement agent's address
Enter the contact person and company, street address, city, state, ZIP code, telephone, fax and email of the title company or settlement agent to receive the certificate if issued.
Sign and complete preparer details
Sign and date; a spouse signs too on a joint Maryland return. A paid preparer adds the PTIN, signature, printed name, address and telephone. Check the email box if you allow contact by email.
Review, download and assemble
Check each line against your documents, then download or print the completed PDF from FillingPDF. Attach every required document and submit by one channel described under How to submit.
How to submit MW506AE
You can submit Form MW506AE by mail or by email. The instructions say to use only one method.
- By mail: Comptroller of Maryland, Revenue Administration Division, Attn: NRS Exemption Requests, P.O. Box 2031, Annapolis, MD 21404-2031. Send the completed form and all attachments together.
- By email: send the completed form and all attachments to [email protected]. Email does not speed up processing. For large attachments, send several smaller emails.
Give the name and address of the title company or settlement agent that should receive the certificate if it is issued. If you do not know it when you complete the form, email it to [email protected] as soon as possible; a mailing address is needed to avoid delay in recording the sale. The certificate is mailed, not emailed.
For questions, visit www.marylandcomptroller.gov, email [email protected] or call 1-800-MDTAXES (1-800-638-2937), or 410-260-7980 in Central Maryland. FillingPDF lets you fill out and download the PDF; submission follows the Comptroller's channels above.
Common mistakes to avoid
- Sending the application so that it arrives less than 21 days before the closing date, or leaving the closing date blank; applications with no closing date are not processed.
- Checking the rental/commercial box without having filed the nonresident income tax returns reporting that income or loss; the application will be denied.
- Including settlement costs or other adjustments on line 1, which is only the original purchase price (or the date of death value for inherited property).
- Claiming capital improvements on line 2 without paid invoices or receipts and cancelled checks; they are not credited unless properly documented.
- Filing one form for several sellers who are not spouses on a joint Maryland income tax return; each seller needs a separate form.
- Submitting by both mail and email; the instructions say to use only one method.
- Leaving off the settlement agent's mailing address without emailing it to [email protected], which can delay recording of the sale.
- Omitting the additional documents a Special Situation requires, or ignoring the Relo Addendum when selling through a relocation company.
- Entering a negative result on line 10 instead of zero; the form says to enter zero if the amount is zero or less.
Frequently asked questions
What is MW506AE?
MW506AE is the Comptroller of Maryland application for a Certificate of Full or Partial Exemption from withholding on the sale of Maryland real property and associated personal property by nonresident individuals and entities. The Comptroller's decision to issue or deny it is final.
How early do I have to submit Form MW506AE?
The form and all required documents must be received by the Comptroller no later than 21 days before the closing date. Applications with no closing date will not be processed, so enter the closing date in mm/dd/2026 format.
Where do I send Form MW506AE?
Mail it to Comptroller of Maryland, Revenue Administration Division, Attn: NRS Exemption Requests, P.O. Box 2031, Annapolis, MD 21404-2031, or email it to [email protected]. Use only one method; email does not speed up processing.
Can I fill out Form MW506AE online?
You can fill out the PDF online on FillingPDF and download or print it. FillingPDF is independent of the Comptroller and does not file anything; you then mail or email the form and attachments yourself.
Do co-owners file one MW506AE together?
No, unless they are spouses filing a joint Maryland income tax return. Otherwise each transferor/seller needs a separate form with their own ownership percentage, such as 25% when there are four equal owners.
What do I attach to the MW506AE worksheet?
Attach proof for the amounts you enter: settlement statement or other proof of purchase price on line 1, receipts for line 2 improvements, settlement statements on line 3, a depreciation schedule on line 5 and the contract on line 7. Special situations require more documents.
Why was my MW506AE application denied for rental property?
The instructions say Maryland law requires nonresident owners to file a nonresident income tax return reporting rental income or loss. If you checked the rental/commercial box and did not file those returns, the application will be denied. File them before applying.
Can the certificate decision be appealed?
No. The form and instructions state that the Comptroller's decision to issue or deny a certificate, and the amount of tax to be withheld on a partial exemption, is final and not subject to appeal. The line 10 amount is only tentative.
Who signs Form MW506AE?
An individual signs, with both spouses signing if they file a joint Maryland income tax return, or a responsible corporate officer signs for an entity. If a power of attorney is necessary, complete Maryland Form 548 and attach it.
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