State Withholding Taxes

I am a MD resident and estate administrator for my sister. My 62 year old sister passed away last year and she was due to received a lump sum pension payment from her deceased spouse, they were both MD residents. She had no children so her pension payment will now go to my parents, who live in Silver Spring, MD.

I received paperwork from the company and they mention that 10% withholding will be taken for Federal taxes. My question is, should MD state taxes be paid on this also, and if so how much is required? I want to make sure that all taxes are paid prior to the lump sum distributuion.

Thanks

Your parents will have to pay state taxes on the pension.