- TAX INFO
- OFFICE LOCATOR
- TAX RESOURCES
- What is the difference between 1040, 1040A or 1040EZ?
- What is a 1099 form?
- Federal income tax brackets
- The ultimate state and federal tax submission faq
- What Are the Top 10 Tax Questions in the US?
- Am I Eligible for the Child Tax Credit?
- Glossary of frequently used tax terms from eSmart Tax
- What is State tax filing and why is it necessary?
Maryland Form 502 - Resident Income Tax Return Instructions
NEW FOR 2010
- New Form 502SU has been created for Subtractions from Income. See Instruction 13 for details.
- New subtraction to cover certain costs related to nitrogen removaltechnology. See Instruction 13 code letter ff.
- Clean Energy Incentive Tax Credit Businesses or individuals who qualifyfor this tax credit will now be entitled to a refund for the amount by whichthe credit exceeds the tax liability on the Maryland return.
- Jobs Creation and Recovery Tax Credit Businesses that operate orconduct business in Maryland that hire certain unemployed workers fornewly-created or certain vacant positions in Maryland may be entitled tothis new refundable tax credit. See Form 500CR and instructions.
- Sustainable Communities Tax Credit: New Form 502S provides for anexpanded credit for qualified businesses and individuals and is applicablefor credit applications received by the Maryland Historical Trust on or afterJune 1, 2010. Form 502H will continue to be used for credit applicationsreceived by the Maryland Historical Trust prior to June 1, 2010.
- Kids First Express Lane Eligibility Act: A new check box on forms 502 & 503 authorizes the sharing of your tax information with the Medical Assistance Program for help enrolling eligible dependent children inaffordable health care programs.
- Developmental Disabilities Waiting List Fund: A new contribution on line 38 form 502, and line 14 form 503 provides funds for thousands with developmental disabilities (such as autism, cerebral palsy and Down syndrome) who are on a waiting list to receive services.
- Go Green! eFile saves paper. In addition, you will receive your refundfaster, receive an acknowledgement that your return has been received, and if you owe - you can extend your payment date until April 30th ifyou both eFile and make your payment electronically.
- Security: Your information is transmitted securely when you choose to fileelectronically. It is protected by several security measures, such as multiplefirewalls, state of the art threat detection and encrypted transmissions.
- iFile: Free internet filing is available for Maryland income tax returns withno limitation. Visit http://www.marylandtaxes.com/ and click iFile for eligibility.
- PC Retail Software: Check the software requirements to determineeFile eligibility before you purchase commercial off-the-shelf software. Use software or link directly to a provider site to prepare and file yourreturn electronically.
- eFile: Ask your professional tax preparer to eFile your return. You mayuse any tax professional who participates in the Maryland ElectronicFiling Program.
- IRS Free File: Free internet filing is available for federal income taxreturns; some income limitations may apply. Visit http://www.irs.gov/ for eligibility. Fees for state tax returns may also apply; however, you canalways return to http://www.marylandtaxes.com/ to use the free iFile internet filing for Maryland income tax returns after using the IRS Free File foryour federal return.
AVOID COMMON ERRORS
- Social Security Numbers: Enter each Social Security number in the spaceprovided at the top of your tax return. Also enter the Social Securitynumber for children and other dependents. The Social Security numberwill be validated by the IRS before the return has completed processing.
- Local Tax: Use the correct local income tax rate for where you lived onDecember 31, 2010. See Instruction 19.
- Original Return: Please send only your original completed Maryland tax return. Photocopies can delay processing of your refund. If you filedelectronically, do not send a paper return.
- Federal Forms: Do not send federal forms, schedules,or copies of federalforms or schedules.
- Photocopies: Remember to keep copies of all federal forms and schedulesand any other documents that may be required later to substantiate yourMaryland return.
- Ink: Use only blue or black ink to complete your return. Do not usepencil.
- Attachments: Please make sure to send all wage statements such as W2sand 1099s. Ensure that the state tax withheld is readable on all forms.
- Colored Paper: Do not print the Maryland return on colored paper.
- Bar Codes: Do not staple or destroy the bar code.
- Tax Forms, Tax Tips, Brochures and Instructions: These are available online at http://www.marylandtaxes.com/ and at many libraries, post officesand branch offices of the Comptroller (see back cover). For forms only, call 410-260-7951.
- Telephone: February 1 - April 18, 2011, 8:00 a.m. until 8:00 p.m., Monday through Friday.
From central Maryland, call 410-260-7980. From other locations, call 1-800-MDTAXES (1-800-638-2937).
- E-mail: Contact firstname.lastname@example.org
- Extensions: To telefile an extension, call 410-260-7829; to file anextension online, visit http://www.marylandtaxes.com/.
RECEIVING YOUR REFUND
- Direct Deposit: To have your refund deposited in your bank or otherfinancial account, enter your account and routing numbers at the bottomof your return.
NEW: Deposit of Income Tax Refund to more than one account: New Form 588 has been created to allow income tax refunds to be deposited to morethan one account. See instruction 22 for more information.
CAUTION! Check with your financial institution to make sure your direct depositwill be accepted and to get the correct routing and account numbers. TheState of Maryland is not responsible for a lost refund if you enter thewrong account information.
- Check: Unless otherwise requested, we will mail you a paper check.
- Refund Information: To request information about your refund, see On- Line Services at http://www.marylandtaxes.com/, or call 410-260-7701 fromcentral Maryland. From other locations, call 1-800-218-8160
PAYING YOUR TAXES
- Direct Debit: If you file electronically and have a balance due, you canhave your income tax payment deducted directly from your bank account. This free service allows you to choose your payment date, anytime untilApril 30, 2011. Visit http://www.marylandtaxes.com/ for details.
- Bill Pay Electronic Payments: If your paper or electronic tax return hasa balance due, you may pay electronically at http://www.marylandtaxes.com/ byselecting BillPay. The amount that you designate will be debited fromyour bank or financial institution on the date that you choose.
- Checks and Money Orders: Make check or money order payable toComptroller of Maryland. We recommend you include your SocialSecurity number on your check or money order.
- Major Credit Cards: Pay your balance due, estimated tax or extensionpayment with MasterCard®, VISA®, Discover® or AmericanExpress®. If you filed a 2009 Maryland income tax return, call 1-800-2PAYTAXSM (1800- 272-9829) and enter Jurisdiction Code 3000 when prompted or visitwww.officialpayments.com. If you did not file a Maryland return in 2009, you must make your credit card payment online at www.officialpayments. com. Both options will be processed by Official Payments Corporation, a private credit card payment services provider. A convenience fee will be charged to your credit card. The state will not receive this fee. You will be informed of the exact amount of the fee before you completeyour transaction. After you complete your transaction, you will be givena confirmation number to keep with your records.
Your return is due by April 15, 2011. If you are a fiscal year taxpayer, see Instruction 25. If any due date falls on a Saturday, Sunday or legal holiday, the return must be filed by the next business day.
COMPLETING THE RETURN
You must use blue or black ink when completing your return. DO NOT use pencil or red ink. Submit the original return, not a photocopy. If no entry is needed for a specific line, leave blank. Do not enter words such as “none” or “zero” and do not draw a line to indicate no entry.
You may round off all cents to the nearest whole dollar. Fifty cents and above should be rounded to the next dollar. State calculations are rounded to the nearest penny.
ELECTRONIC FILING INSTRUCTIONS
The instructions in this booklet are designed specifically for filers of paper returns. If you are filing electronically and these instructions differ from the instructions for the electronic method being used, you should comply with the instructions appropriate for that method.
Software vendors should refer to the e-file handbook for their instructions.
You may file your Maryland income tax return on a computer-prepared or computer- generated substitute form provided the form is approved in advance by the Revenue Administration Division. The fact that a software package is available for retail purchase does not guarantee that it has been approved for use.
For additional information, see Administrative Release 26, Procedures for Computer Printed Substitute Forms, on our Web site at http://www.marylandtaxes.com/. (See the back cover of this booklet.)
You may also call the tax information number listed on the back cover to find out which computer-generated forms have been approved for use or visit our Web site at http://www.marylandtaxes.com/.
There are severe penalties for failing to file a tax return, failing to pay any tax when due, filing a false or fraudulent return, or making a false certification. The penalties include criminal fines, imprisonment, and a penalty on your taxes. In addition, interest is charged on amounts not paid.
To collect unpaid taxes, the Comptroller is directed to enter liens against the salary, wages or property of delinquent taxpayers.
1 Do I have to file?
This booklet and forms are for residents of Maryland. In general, you must file a Maryland return if you are or were a resident of Maryland AND you are required to file a federal return. Information in this section will allow you to determine if you must file a return and pay taxes as a resident of Maryland. If you are not a resident but had Maryland tax withheld or had income from sources in Maryland, you must use Form 505 or 515, Nonresident Tax Return.
WHO IS A RESIDENT?
You are a resident of Maryland if:
- your permanent home is or was in Maryland (the law refers to this as your domicile).
- your permanent home is outside of Maryland, but you maintained a place of abode (that is, a place to live) in Maryland for more than six months of the tax year. If this applies to you and you were physically present in the state for 183 days or more, you must file a full-year resident return.
If you began or ended residence in Maryland during the tax year you must file a Maryland resident income tax return. See Instruction 26.
MILITARY AND OTHERS WORKING OUTSIDE OF MARYLAND
Military and other individuals whose domicile is in Maryland, but who are stationed or work outside of Maryland, including overseas, retain their Maryland legal residence. Such persons do not lose Maryland residence just because of duty assignments outside of the State; see Administrative Release 37. Military personnel and their spouses should see Instruction 29.
TO DETERMINE IF YOU ARE REQUIRED TO FILE A MARYLAND RETURN
- Add up all of your federal gross income to determine your total federal income. Gross income is defined in the Internal Revenue Code and, in general, consists of all income regardless of source. It includes wages and other compensation for services, gross income derived from business, gains (not losses) derived from dealings in property, interest, rents, royalties, dividends, alimony, annuities, pensions, income from partnerships or fiduciaries, etc. If modifications or deductions reduce your gross income below the minimum filing level, you are still required to file. IRS Publication 525 provides additional information on taxable and nontaxable income.
- Do not include Social Security or railroad retirement benefits in your total federal income.
- Add to your total federal income any Maryland additions to income. Do not include any additions related to periods of nonresidence. See Instruction 12. This is your Maryland gross income.
- If you are a dependent taxpayer, add to your total federal income any Maryland additions and subtract any Maryland subtractions. See Instructions 12 and 13. This is your Maryland gross income.
- You must file a Maryland return if your Maryland gross income equals or exceeds the income levels in Table 1 below.
- If you or your spouse is 65 or over, use Table 2 below.
IF YOU ARE NOT REQUIRED TO FILE A MARYLAND RETURN BUT HAD MARYLAND TAXES WITHHELD
To get a refund of Maryland income taxes withheld, you must file a Maryland return.
Taxpayers who are filing for refund only should complete all of the information at the top of Form 502 or Form 503 and complete the following lines:
|Form 502||Form 503|
|1-18||1, 7a*, 10a*|
*Enter a zero unless you claim an earned income credit on your federal return.
Sign the form and attach withholding statements (all W-2 and 1099 forms) showing Maryland and local tax withheld equal to the withholding you are claiming.
Your form is then complete. Mail it in the gold envelope from the tax booklet. To speed processing of your tax refund, you must file electronically. You must file within three years of the original due date to receive any refund.
2 Use of federal return
First complete your 2010 federal income tax return.
You will need information from your fed-deductions be entered on your Maryland incometax/1040NR.asp for further informaeral return in order to complete your Mary-return exactly as they were reported on your tion. All items reported on your Maryland land return. Therefore, complete your federal federal return. If you use federal Form return are subject to verification, audit and return before you continue beyond this point. 1040NR, visit our Web page at revision by the Maryland State Comptroller's Maryland law requires that your income and http://individuals.marylandtaxes.com/ Office.
3 Form 502 or 503?
Decide whether you will use Form 502 (long form) or Form 503 (short form). You must use Form 502 if your federal adjusted gross income is $100,000 or more.
All taxpayers may use Form 502. You must use this form if you itemize deductions, if you have any Maryland additions or subtractions, if you have made estimated payments or if you are claiming business or personal income tax credits. You must also use this form if you have moved into or out of Maryland during the tax year.
If you use the standard deduction, have no additions or subtractions, and claim only withholding or the refundable or other earned income credits, you may use the short Form 503. Answer the questions on the back of Form 503 to see if you qualify to use it. NOTE: If you are eligible for the pension exclusion, you must use Form 502.
4 Mailing label
Tax booklets with labels are mailed only to those individuals who file a return using a form directly out of the tax booklet. Remove the label located on the cover of your tax booklet and place it over the name and address blanks of your tax return. NOTE: If you do not use a label, complete the name and address boxes located at the top of the form.
DO NOT USE YOUR LABEL IF:
- your name or address is wrong, OR
- you and your spouse are going to file separate returns and both of your names and initials are on the label, OR
- you are going to file a joint return, and only one name is on the label, OR
- you are filing a computer-generated return.
IF YOUR RETURN IS BEING COMPLETED BY SOMEONE ELSE:
Take your booklet to your tax preparer so that the preparer can attach the label to your return.
5 Social Security Number(s)
Your Social Security number is not printed on the label. Therefore, it is important that you enter each Social Security number in the space provided at the top of your tax return regardless of whether you use a label or not.
The Social Security number(s) must must apply for a tax identification number disallowance of any credits or exemptions you be a valid number issued by the Social Secu-with the IRS and wait until you receive it may be entitled to and result in a balance due. rity Administration of the United States Gov-before you file. Valid Social Security or tax identification ernment. If you, your spouse or dependent(s) A missing or incorrect Social Security or numbers are required for any claim of exempdo not have a Social Security number, you tax identification number could result in the tion for a dependent.
6 County, city, town information
Fill in the boxes for MARYLAND COUNTY and CITY, TOWN OR TAXING AREA based on your residence on the last day of the tax period:
BALTIMORE CITY RESIDENTS:
Leave the MARYLAND COUNTY box blank.
Write “Baltimore City” in the CITY, TOWN OR TAXING AREA box.
RESIDENTS OF MARYLAND COUNTIES (NOT BALTIMORE CITY):
- Write the name of your county in the MARYLAND COUNTY box.
- Find your county in the list below.
- If you lived within the incorporated tax boundaries of one of the areas listed under your county, write its name in the CITY, TOWN OR TAXING AREA box.
- If you did not live in one of the areas listed for your county, leave the CITY, TOWN OR TAXING AREA box blank.
7 Filing status
Use the following chart to determine your filing status and check the correct FILING STATUS box on the return. (IMPORTANT: Also see additional information in the chart.)
|If you are:||Check the box for:||Additional Information|
|SINGLE PERSON(Single on the last day of the tax year.)||Any person who can be claimed as a dependent on his or her parent's (or any other person's) federal return||Dependent
Filing Status 6
|Single Dependent taxpayers, regardless of whether income is earned or unearned, are not required to file a Maryland income tax return unless the gross income including Maryland additions and subtractions is $9,350 or more. See Instruction 1 if you are due a refund. You do not get an exemption for yourself. Put a zero in Exemption Box A.|
|Any person who filed as a head of household on his or her federal return||Head of household
Filing Status 4
|A qualifying widow(er) with dependent child who filed a federal return with this status||Qualifying widow(er)
with dependent child
Filing Status 5
|All other single persons||Single
Filing Status 1
|If your spouse died during the year AND you filed a joint federal return with your deceased spouse, you may still file a joint Maryland return.|
(Married on the last day of the tax year.)
|Any person who can be claimed as a dependent on his or her parent's (or any other person's) federal return||Dependent taxpayer
Filing Status 6
|You do not get an exemption for yourself. Put a zero in Exemption Box A. You and your spouse must file separate returns.|
|Any person who filed as a head of household on his or her federal return||Head of household
Filing Status 4
|Married couples who filed separate federal returns||Married filing separately
Filing Status 3
|Each taxpayer must show his or her spouse's Social Security number in the blank next to the filing status box.|
|Married couples who filed joint federal returns but had different tax periods||Joint return
Filing Status 2
Married filing separately
Filing Status 3
|If you are not certain which filing status to use, figure your tax both ways to determine which status is best for you. See Instructions 8 and 26(g) through (p).|
|Married couples who filed joint federal returns but were domiciled in different counties, cities, towns or taxing areas on the last day of the year||Joint return
Filing Status 2
Married filing separately
Filing Status 3
|If you are filing separately, see Instruction 8. If you are filing a joint return see SPECIAL NOTE in Instruction 19.|
|Married couples who filed joint federal returns but were domiciled in different states on the last day of the tax year.||Joint return
Filing Status 2
Married filing separately
Filing Status 3
|If you are filing separately, see Instruction 8. If you are filing a joint return, you must attach a pro forma Form 505 and 505NR. See Administrative Release 3.|
|All other married couples who filed joint federal returns||Joint return
Filing Status 2
8 Special instructions for married persons filing separately
If you and your spouse file a joint federal return but are filing separate Maryland returns according to Instruction 7, follow the instructions below.
If you and your spouse file a joint federal return but are filing separate Maryland returns according to Instruction 7, you should report the income you would have reported had you filed a separate federal return. The income from jointly held securities, property, etc., must be divided evenly between husband and wife.
If you itemized your deductions on the joint federal return, one spouse may use the standard deduction and the other spouse may claim those deductions on the federal return that are “attributable exclusively” to that spouse, plus a prorated amount of the remaining deductions. If it is not possible to determine these deductions, the deduction must be allocated proportionately based on your share of the income.
The term “attributable exclusively” means that the individual is solely responsible for the payment of an expense claimed as an
itemized deduction, including compliance with a valid court order or separation agreement; or the individual jointly responsible for the payment of an expense claimed as an itemized deduction can demonstrate payment of the full amount of the deduction with funds that are not attributable in whole or in part, to the other jointly responsible individual.
If both spouses choose to itemize on their separate Maryland returns, then each spouse must determine which deductions are attributable exclusively to him or her and prorate the remaining deductions using the Maryland Income Factor. See Instruction 26(k). If it is not possible to determine deductions in this manner, they must be allocated proportionately based on their respective shares of the income. The total amount of itemized deductions for both spouses cannot exceed the itemized deductions on the federal return.
If you choose to use the standard deduction method, use Worksheet 1 in Instruction 16.
Each spouse must claim his or her own personal exemption. Each spouse may allocate the dependent exemptions in any manner they choose. The total number of exemptions claimed on the separate returns may not exceed the total number of exemptions claimed on the federal return except for the additional exemptions for being 65 or over or blind.
Complete the remainder of the form using the instructions for each line. Each spouse should claim his or her own withholding and other credits. Joint estimated tax paid may be divided between the spouses in any manner provided the total claimed does not exceed the total estimated tax paid.
9 Part-year residents
If you began or ended legal residence in Maryland in 2010 go to Instruction 26. Military taxpayers. If you have non-Maryland military income, See Administrative Release 1.
Determine what exemptions you are entitled to and complete the EXEMPTIONS area on the form, including the Social Security numbers of children and other dependents. If more space is required, attach a separate statement.
You are permitted the same number of exemptions which you are permitted on your federal return; however, the exemption amount is different on the Maryland return. Even if you are not required to file a federal return, the federal rules for exemptions still apply to you. Refer to the federal income tax instructions for further information.
In addition to the exemptions allowed on your federal return, you and your spouse are permitted to claim exemptions for being age 65 or over or for blindness. These additional exemptions are in the amount of $1,000 each. If any other dependent claimed is 65 or over, you also receive an extra exemption of up to $3,200. Make sure you check both boxes in columns (6) and (7) for each of your dependents who are age 65 or over.
Enter the number of exemptions in the appropriate boxes based upon your entries in parts A, B, and C of the exemption area of the form. Enter the total number of exemptions in Part D.
KIDS FIRST EXPRESS LANE ELIGIBILITY ACT
In column 4 in dependent area (C), enter a check (.) if the dependent who is eligible to be claimed as an exemption is under age 19 before the end of the taxable year.
If you have identified the exemption you are claiming as a “dependent under age 19”, please check (.) either the yes or no box of column (5) to indicate whether or not that child currently has health insurance.
Answering these questions will tell us whether to send you information about affordable health care coverage for your children. Check (3) yes to authorize us to share your tax information with the Medical Assistance Program. It will be used ONLY to identify and help enroll your eligible children in affordable health care programs.
PART-YEAR RESIDENTS AND MILITARY
You must prorate your exemptions based on the percentage of your income subject to Maryland tax. See Instruction 26 and Administrative Release 1.
Copy the figure for federal adjusted gross income from your federal return onto line 1 of Form 502 or Form 503. Copy the total of your wages, salaries and tips from your federal return onto line 1a of Form 502 or Form 503. Use the chart below to find the figures that you need. If you and your spouse file a joint federal return but are filing separate Maryland returns, see Instruction 8.
|To Maryland Form||From Federal Form|
|502 & 503||1040||1040A||1040EZ|
|line 1 line 1a||line 37 line 7||line 21 line 7||line 4 line 1|
12 Additions to income
Determine which additions to income apply to you. Write the correct amounts on lines 2-5 of Form 502. Instructions for each line:
Line 2. TAX-EXEMPT STATE OR LOCAL BOND INTEREST.Enter the interest from non- Maryland state or local bonds or other obligations (less related expenses). This includes interest from mutual funds that invest in non-2. 40% of capital gain portion of distribution from Form 1099R........ Maryland state or local obligations. Interest earned on obligations of Maryland or any Maryland subdivision is exempt from Maryland tax and should not be entered on this line.
Line 3. STATE RETIREMENT PICKUP. l Pickup contributions of a State retirement or pension system member. The pickup amount will be stated separately on your W-2 form. The tax on this portion of your wages is deferred for federal but not for state purposes.
Line 4. LUMP SUM DISTRIBUTION FROM A QUALIFIED RETIREMENT PLAN. If you received such a distribution, you will receive a Form 1099R showing the amounts distributed. You must report part of the lump sum distribution as an addition to income if you file federal Form 4972.
Use the LUMP SUM DISTRIBUTION WORKSHEET to determine the amount of your addition.
Line 5. OTHER ADDITIONS TO INCOME. If one or more of these apply to you, enter the total amount on line 5 and identify each item using the code letter:
|a||Part-year residents: losses or adjustments to federal income that were realized or paid when you were a nonresident of Maryland.|
|b||Net additions to income from pass-through entities not attributable to decoupling.|
|c||Net additions to income from a trust as reported by the fiduciary.|
|d||S corporation taxes included on line 8 of Maryland Form 502CR, Part A, Tax Credits for Income Taxes Paid to Other States. (See instructions for Part A of Form 502CR.)|
Expenses paid in the current year to the extent allowed on Form 500CR as Business Tax Credits for the following: Enterprise Zone Tax Credit, Employment Opportunity Tax Credit, Maryland Disability Employment Tax Credit, Long-Term Employment of Qualified Ex-Felons Tax Credit, Research and Development Tax Credit, Telecommunications Property Tax Credit and Cellulosic Ethanol Technology Research and Development Tax Credit.
|f||Oil percentage depletion allowance claimed under IRC Section 613.|
Income exempt from federal tax by federal law or treaty that is not exempt from Maryland tax.
Net operating loss deduction to the extent of a double benefit. See Administrative Release 18 at http://www.marylandtaxes.com/
Taxable tax preference items from line 5 of Maryland Form 502TP. The items of tax preference are defined in IRC Section 57. If the total of your tax preference items is more than $10,000 ($20,000 for married taxpayers filing joint returns) you must complete and attach Maryland Form 502TP, whether or not you are required to file federal Form 6251 (Alternative Minimum Tax) with your federal Form 1040.
The amount deducted for federal income tax purposes for expenses attributable to operating a family day care home or a child care center in Maryland without having the registration or license required by the Family Law Article.
Any refunds of advanced tuition payments made under the Maryland Prepaid College Trust, to the extent the payments were subtracted from federal adjusted gross income and any refunds of contributions made under the Maryland College Investment Plan or the Maryland Broker-Dealer College Investment Plan, to the extent the contributions were subtracted from federal adjusted gross income. See Administrative Release 32.
Net addition modification to Maryland taxable income when claiming the federal depreciation allowances from which the State of Maryland has decoupled. Complete and attach Form 500DM. See Administrative Release 38.
Net addition modification to Maryland taxable income when the federal special 5-year carryback period was used for a net operating loss under federal law compared to Maryland taxable income without regard to federal provisions. Complete and attach Form 500DM. See Administrative Release 38.
The amount deducted on your federal income tax return for domestic production activities (line 35 of Form 1040).
The amount deducted on your federal income tax return for tuition and related expenses (line 34 of Form 1040 or line 19 of Form 1040A).
Net addition modification to Maryland taxable income resulting from the federal deferral of income arising from business indebtedness discharged by reacquisition of a debt instrument. See Form 500DM.
Net addition modification from multiple decoupling provisions. See the table at the bottom of Form 500DM for the line numbers and code letters to use.
Net addition decoupling modification from a pass-through entity. See Form 500DM.
13 Subtractions from income
Determine which subtractions from income apply to you. Write the correct amounts on lines 8–14 of Form 502. Instructions for each line:
Line 8. STATE TAX REFUNDS. Copy onto line 8 the amount of refunds of state or local income tax included in line 1 of Form 502.
Line 9. CHILD CARE EXPENSES. You may subtract the cost of caring for your dependents while you work. There is a limitation of $3,000 ($6,000 if two or more dependents receive care). Copy onto line 9 the amount from line 6 of federal Form 2441. You may also be entitled to a credit for these taxable expenses. See instructions for Part B of Form 502CR.
Line 10. PENSION EXCLUSION. You may be able to subtract some of your taxable pension and retirement annuity income. This subtraction applies only if:
- you were 65 or over or totally disabled, or your spouse was totally disabled, on the last day of the tax year, AND
- you included on your federal return taxable income received as a pension, annuity or endowment from an “employee retirement system.” [A traditional IRA, a Roth IRA, a simplified employee plan (SEP), a Keogh Plan or an ineligible deferred compensation plan does not qualify.]
Each spouse who receives taxable pension or annuity income and is 65 or over or totally disabled may be entitled to this exclusion. In addition, if you receive taxable pension or annuity income but you are not 65 or totally disabled, you may be entitled to this exclusion if your spouse is totally disabled. Complete a separate column in the worksheet on page 6 for each spouse. Combine your allowable exclusion and enter the total amount on line 10, Form 502.
To be considered totally disabled you must have a mental or physical impairment To be considered totally disabled you must have a mental or physical impairment which prevents you from engaging in substantial gainful activity. You must expect the impairment to be of long, continued or indefinite duration or to result in your death. You must attach to your return a certification from a qualified physician stating the nature of your impairment and that you are totally disabled. If you have previously submitted a physician's certification, just attach your own statement that you are still totally disabled and that a physician's certification was submitted before.
If you are a part-year resident, complete the pension exclusion worksheet using total taxable pension and total Social Security and railroad retirement benefits as if you were a full-year resident. Prorate the amount on line 5 by the number of months of Maryland residence divided by 12.
However, if you began to receive your pension during the tax year you became a Maryland resident, use a proration factor of the number of months you were a resident divided by the number of months the pension was received.
For example, Fred Taxpayer moved to Maryland on March 1. If he started to receive his pension on March 1, he would prorate the pension exclusion by 10/10, which would mean he would be entitled to the full pension exclusion. However, if he began to receive his pension on February 1, Fred would prorate his pension by 10/11. Please note that, in either case, the proration factor may not exceed 1.
Complete the PENSION EXCLUSION COMPUTATION WORKSHEET on page 6. Copy the amount from line 5 of the worksheet onto line 11 of Form 502.
Line 11. FEDERALLY TAXED SOCIAL SECURITY AND RAILROAD RETIREMENT BENEFITS. If you included in your federal adjusted gross income Social Security, Tier I, Tier II and/or supplemental railroad retirement benefits, then you must include the total amount of such benefits on line 12. Social Security and railroad retirement benefits are exempt from state tax.
Line 12. NONRESIDENT INCOME. If you began or ended your residence in Maryland during the year, you may subtract the portion of your income received when you were not a resident of Maryland. See Instruction 26 for part-year residents and Instruction 29 for military personnel. If your state of residence or your period of Maryland residence was not the same as that of your spouse and you filed a joint return, follow Instruction 26 (c) through (p).
Line 13. SUBTRACTIONS FROM INCOME ON FORM 502SU. This year, other certain subtractions for which you may qualify will be reported on Form 502SU. Determine which subtractions apply to you and enter the amount for each on Form 502SU. If multiple subtractions apply, be sure to identify all of them on the form and attach it to Form 502. Enter the sum of all applicable subtractions from Form 502SU on line 13 of Form 502, and enter the code letters that represent the four highest dollar amounts in the code letter boxes. If multiple subtractions apply, be sure to identify all of them on Form 502SU and attach it to your Form 502
Note: If only one of these subtractions applies to you, enter the amount and the code letter on Line 13 of Form 502; then the use of Form 502SU may be optional.
a. Payments to firemen and policemen for job-related injuries or disabilities (but not more than the amount of such payments included in your total income).
b. Net allowable subtractions from NEW income from pass-through entities, not attributable to decoupling.
c. Net subtractions from income reported by a fiduciary.
d. Distributions of accumulated income by a fiduciary, if income tax has been paid by the fiduciary to the State (but not more than the amount of such income included in your total income).
e. Profit (without regard to losses) from the sale or exchange of bonds issued by the State or local governments of Maryland.
f. Benefits received from a Keogh plan on which State income tax was paid prior to 1967. Attach statement.
g. Amount of wages and salaries which were not allowed as a business expense because you took the federal Targeted Jobs Credit (Work Opportunity Tax Credit).
h. Expenses up to $5,000 incurred by a blind person for a reader, or up to $1,000 incurred by an employer for a reader for a blind employee.
i. Expenses incurred for reforestation or timber stand improvement of commercial forest land. Qualifications and instructions are on Form DNR-393, available from the Department of Natural Resources, telephone 410-260-8531.
j. The amount added to taxable income for the use of an official vehicle by a member of a state, county or local police or fire department. The amount is stated separately on your W-2 form.
k. Up to $6,000 in expenses incurred by parents to adopt a child with special needs through a public or nonprofit adoption agency and up to $5,000 in expenses incurred by parents to adopt a child without special needs.
l. Purchase and installation costs of certain conservation tillage equipment as certified by the Maryland Department of Agriculture. Attach a copy of the certification. m. Deductible artist's contribution. Attach a copy of Maryland Form 502AC.
n. Payment received under a fire, rescue, or ambulance personnel length of service award program that is funded by any county or municipal corporation of the State.
o. The value of farm products you donated to a gleaning cooperative as certified by the Maryland Department of Agriculture. Attach a copy of the certification.
p. Up to $15,000 of military pay included in your federal adjusted gross income that you received while in the active service of any branch of the armed forces and which is attributable to service outside the boundaries of the U.S. or its possessions. To compute the subtraction, follow the directions on the MILITARY OVERSEAS INCOME WORKSHEET. If your total military pay exceeds $30,000, you do not qualify for the subtraction.
q. Unreimbursed vehicle travel expenses for:
- a volunteer fire company;
- service as a volunteer for a charitable organization whose principal purpose is to provide medical, health or nutritional care; AND
- assistance (other than providing transportation to and from the school) for handicapped students at a Maryland community college.
Attach Maryland Form 502V to claim this subtraction from income.
r. Amount of pickup contribution shown on Form 1099R from the state retirement or pension systems included in federal adjusted gross income. The subtraction is limited to the amount of pickup contribution stated on the 1099R or the taxable pension, whichever is less. Excess contribution may be carried forward to the next year.
s. The amount of interest and dividend income (including capital gain distributions) of a dependent child which the parent has elected to include in the parent's federal gross income under Internal Revenue Code Section 1(g)(7).
t. Payments received from the State of Maryland under Title 12 Subtitle 2 of the Real Property Article (relocation and assistance payments).
u. Up to $5,000 of military retirement income received by a qualifying individual during the tax year. To qualify, you must have been a member of an active or reserve component of the armed forces of the United States, an active duty member of the commissioned corps of the Public Health Service, the National Oceanic and Atmospheric Administration, or the Coast and Geodetic Survey, a member of the Maryland National Guard, or the member's surviving spouse or ex-spouse.
v. The Honorable Louis L. Goldstein Volunteer Police, Fire, Rescue and Emergency Medical Services Personnel Subtraction Modification Program. $3,500 for each taxpayer who is a qualifying volunteer as certified by a Maryland fire, police, rescue or emergency medical services organization. $3,500 for each taxpayer who is a qualifying member of the U.S. Coast Guard Auxiliary as certified by the organization. Attach a copy of the certification.
w. Purchase cost of certain poultry or livestock manure spreading equipment as certified by the Maryland Department of Agriculture. Attach a copy of the certification.
x. Up to $2,500 per contract purchased for advanced tuition payments made to the Maryland Prepaid College Trust and a maximum of $2,500 per taxpayer per beneficiary for the total of all amounts contributed to investment accounts for same beneficiary under the Maryland College Investment Plan and the Maryland Broker-Dealer College Investment Plan. See Administrative Release 32.
y. Any income of an individual that is related to tangible or intangible property that was seized, misappropriated or lost as a result of the actions or policies of Nazi Germany towards a Holocaust victim. For additional information contact the Revenue Administration Division.
z. Expenses incurred to buy and install handrails in an existing elevator in a healthcare facility (as defined in Section 19-114 of the Health General Article) or other building in which at least 50% of the space is used for medical purposes.
aa. Payments from a pension system to the surviving spouse or other beneficiary of a law enforcement officer or firefighter whose death arises out of or in the course of their employment.
ab. INCOME FROM U.S. GOVERNMENT OBLIGATIONS. Enter interest on U.S. savings bonds and other U.S. obligations. Capital gains from the sale or exchange of U.S. obligations should be included on this line. Dividends from mutual funds that invest in U.S. government obligations are also exempt from state taxation. However, only that portion of the dividends attributable to interest or capital gain from U.S. government obligations can be subtracted. You cannot subtract income from Government National Mortgage Association securities. See Administrative Releases 10 & 13.
bb. Net subtraction modification to Maryland taxable income when claiming the federal depreciation allowances from which the State of Maryland has decoupled. Complete and attach Form 500DM. See Administrative Release 38.
cc. Net subtraction modification to Maryland taxable income when the federal special 5-year carryback period was used for a net operating loss under federal law compared to Maryland taxable income without regard to federal provisions. Complete and attach Form 500DM. See Administrative Release 38.
cd. Net subtraction modification to Maryland taxable income resulting from the federal ratable inclusion of deferred income arising from business indebtedness discharged by reacquisition of a debt instrument. Complete and attach Form 500DM. See Administrative Release 38.
dd. Income derived within an arts and entertainment district by a qualifying residing artist from the publication, production, or sale of an artistic work that the artist created, wrote, composed or executed. Complete and attach a copy of Form 502AE.
dm. Net subtraction modification from multiple decoupling provisions. See the table at the bottom of Form 500DM.
dp. Net subtraction decoupling modification from a pass-through entity. See Form 500DM.
ee. The amount received as a grant NEW under the Solar Energy Grant Program administered by the Maryland Energy Administration (but not more than the amount included in your total income)
ff.. Amount of the cost difference between a conventional on-site sewage disposal and a system that utilizes nitrogen removal technology, for which the Department of Environment's payment assitance program does not cover.
hh. Exemption adjustment for high income taxpayers with interest on U.S. obligations. If you have received income from U.S. Obligations and your federal adjusted gross income exceeds $100,000 ($150,000 if filing Joint, Head of Household, or Qualifying Widow(er)), enter the difference, if any, between the exemption amount based on your federal adjusted gross income and the exemption amount based upon your federal adjusted gross income after subtracting your U.S. Obligations using the Exemption Adjustment worksheet.
Line 14. TWO-INCOME SUBTRACTION. You may subtract up to $1,200 if both spouses have income subject to Maryland tax and you file a joint return. To compute the subtraction complete the TWO-INCOME MARRIED COUPLE SUBTRACTION WORKSHEET.
14 Itemized deductions
If you figure your tax by the ITEMIZED DEDUCTION METHOD, complete line 17a and b on Maryland Form 502. (See Instruction 16 to see if you will use the ITEMIZED DEDUCTION METHOD.)
USE FEDERAL FORM 1040 SCHEDULE A
To use the ITEMIZED DEDUCTION METHOD, you must itemize your deductions on your federal return and complete federal Form 1040 Schedule A. Copy the amount from Schedule A, line 29, Total Itemized Deductions, on line 17a of Form 502. Certain items of federal itemized deductions are not eligible for State purposes and must be subtracted from line 17a. State and local income taxes used as a deduction for federal purposes must be entered on line 17b. Also, any amounts deducted as contributions of Preservation and Conservation Easements for which a credit is claimed on Form 502CR must be added to line 17b.
You are not required to itemize deductions on your Maryland return simply because you itemized on your federal return. Figure your tax each way to determine which method is best for you.
If your unreimbursed business expenses include depreciation to which an adjustment is required for Maryland purposes, complete Form 500DM to calculate the addition modification “I” or subtraction modification “bb”.
15 Figure your Maryland adjusted gross income
Complete lines 1–16 on the front of Form 502. Line 16 is your Maryland adjusted gross income.
16 Figure your Maryland taxable net income
To find your taxable income you must subtract either the standard deduction from the worksheet or the itemized deductions you have entered on line 17 of Form 502. The ITEMIZED DEDUCTION METHOD will lower your taxes if you have enough deductions. If you are not certain about which method to use, figure your tax both ways to determine which method is best for you. Check the box on line 17 of Form 502 to show which method you will use. NOTE: You must use the standard deduction if you are using Form 503 or if you did not itemize on your federal return. Follow these instructions:
STANDARD DEDUCTION METHOD (Check the box on line 17 of Form 502)
The STANDARD DEDUCTION METHOD gives you a standard deduction of 15% of Maryland adjusted gross income (line 16) with minimums of $1,500 and $3,000 and maximums of $2,000 and $4,000, depending on your filing status. Use the worksheet on this page for your filing status to figure your standard deduction. Write the result on line 17 of Form 502 or line 2 of Form 503. Then follow the instructions for EXEMPTIONS.
ITEMIZED DEDUCTION METHOD (Check the box on line 17 of Form 502)
You may itemize your deductions only if you itemized deductions on your federal return. See Instruction 14 for completing lines 17a and b of Form 502. Enter the result on line 17b.
You are not required to itemize deductions on your Maryland return simply because you itemized on your federal return. Figure your tax each way to determine which method is best for you.
After completing the EXEMPTIONS area on your return, enter the total exemption amount on line 19 of Form 502 or line 4 of Form 503.
PART-YEAR RESIDENTS AND NONRESIDENT MILITARY TAXPAYERS
You must adjust your standard or itemized deductions and exemptions. If you are a partyear resident, see Instruction 26. If you are a nonresident military member filing a joint return with your civilian spouse, see Administrative Release 1.
17 Figure your Maryland tax
You must use the tax tables if your taxable income is less than $100,000.
The 2010 Maryland tax rate schedules are shown so you can see the tax rate that applies to all levels of income; however, do not use them to figure your tax. Instead use the tax tables if your income is under $100,000; otherwise, use the appropriate row in the Maryland Tax Computation Worksheet Schedules at the end of the tax tables to figure your tax. The tax tables and the Maryland Tax Computation Worksheet Schedules I and II have been based on these tax rate schedules.
Find the income range in the tax table that applies to the amount on line 23 of Form 502 or line 5 of Form 503. Find the Maryland tax corresponding to your income range. Enter the tax amount on line 24 of Form 502 or line 6 of Form 503. If your taxable income is $100,000 or more, use the Maryland Tax Computation Worksheet at the end of the tax table.
18 Earned income credit, poverty level credit, credits for individuals and business tax credits
If you claim earned income credit or poverty level credit, see Instruction 19 for your local credit calculation.
Line 25 of Form 502.
Line 7a of Form 503. EARNED INCOME CREDIT. If you claimed an earned income credit on your federal return, then you may claim one-half (50%) of the federal credit on your Maryland return. If you are a part-year resident or a member of the military, see Instruction 26(o) before completing this worksheet.
If you filed a joint federal return, but a separate Maryland return, you may claim a combined total of up to one-half the federal credit.
Complete the STATE EARNED INCOME CREDIT WORKSHEET to calculate the amount to enter on line 25 of Form 502 or line 7a of Form 503.
Line 26 of Form 502.
Line 7b of Form 503. STATE POVERTY LEVEL CREDIT. If your earned income and federal adjusted gross income plus additions are below the poverty level income for the number of exemptions on your federal tax return, you may be eligible for the poverty level credit. You are not eligible for this credit if you checked filing status 6 (dependent taxpayer) on your Maryland income tax return.
Generally, if your Maryland state tax exceeds 50% of your federal earned income credit and your earned income and federal adjusted gross income are below the poverty income guidelines from the worksheet, you may claim a credit of 5% of your earned income.
Complete the STATE POVERTY LEVEL CREDIT WORKSHEET to calculate the amount to enter on line 26 of Form 502 or line 7b of Form 503.
This is not a refundable credit.
Line 27 of Form 502. OTHER INCOME TAX CREDITS FOR INDIVIDUALS. Enter the total of your income tax credits as listed below. Complete and attach Form 502CR with Form 502.
a. CREDIT FOR INCOME TAXES PAIS TO OTHER STATES. If you have income subject to tax in both Maryland and another state, you may be eligible for a tax credit. Note: You must attach a copy of Form 502CR and also a copy of the tax return filed in the other state. If these are not attached, no credit will be allowed.
b. CREDIT FOR CHILD AND DEPENDENT CARE EXPENSES. If you were eligible for a Child and Dependent Care Credit on your federal income tax return and your income is below certain thresholds, you are entitled to a tax credit equal to a percentage of the federal credit.
c. QUALITY TEACHER INCENTIVE CREDIT. If you are a Maryland public school teacher who paid tuition to take graduate level courses required to maintain certification, you may be eligible for a tax credit.
d. CREDIT FOR AQUACULTURE OYSTER FLOATS. If you purchased a new aquaculture oyster float during the tax year, you may be entitled to a credit of up to $500 for the cost of the float.
e. LONG-TERM CARE INSURANCE CRE DIT. If you paid a premium for a long-term care insurance policy for yourself or certain family members, you may be eligible for a tax credit.
f. CREDIT FOR PRESERVATION AND CONSERVATION EASEMENTS. If you donated an easement to the Maryland Environmental Trust or the Maryland Agricultural Land Preservation Foundation to preserve open space, natural resources, agriculture, forest land, watersheds, significant ecosystems, viewsheds, or historic properties, you may be eligible for a credit.
NOTE: HERITAGE STRUCTURE REHABILITATION TAX CREDIT. See Form 502H for qualifications and instructions.
For additional information regarding any of the above income tax credits, see the instructions for Form 502CR.
Line 28 of Form 502. BUSINESS TAX CREDITS. Enter the total of your business tax credits as listed below. For credits a through q, complete and attach Form 500CR with Form 502.
a. ENTERPRISE ZONE TAX CREDIT. Businesses located in an enterprise zone may be eligible for tax credits based upon wages paid to qualifying employees.
b. EMPLOYMENT OPPORTUNITY TAX CREDIT. Businesses employing persons receiving “Aid to Families With Dependent Children” (AFDC) or Family Investment Program Entitlements (FIP) may be eligible for tax credits based upon wages paid to and child care and transportation expenses paid on behalf of those employees.
c. MARYLAND DISABILITY EMPLOYMENT TAX CREDIT. Businesses employing persons with disabilities as certified by the State Department of Education or veterans with disabilities as certified by the Department of Labor, Licensing and Regulation may be eligible for tax credits based upon wages paid to and child care and transportation expenses paid on behalf of those employees.
d. RESEARCH AND DEVELOPMENT TAX CREDIT. Businesses may claim a credit for certain qualified research and development expenses.
e. JOB CREATION TAX CREDIT. Certain businesses that create new qualified positions in Maryland may be eligible for a tax credit based on the number of qualified positions created or wages paid for these positions.
f. COMMUNITY INVESTMENT TAX CREDIT. Businesses that contribute to approved Neighborhood and Community Assistance Programs may be eligible for a tax credit of 50% of approved contributions with a maximum credit of $250,000. Individuals who make a non-business contribution may also be eligible for this tax credit.
g. BUSINESSES THAT CREATE NEW JOBS TAX CREDIT. Certain businesses located in Maryland that create new positions or establish or expand business facilities in the state may be entitled to an income tax credit if a property tax credit is granted by Baltimore City or any county or municipal corporation of Maryland.
h. TELECOMMUNICATIONS PROPERTY TAX CREDIT. A credit is allowed for a public utility that is a telecommunications company for 60% of the total state, county and municipal corporation property taxes paid on certain Maryland property.
i. WORK-BASED LEARNING PROGRAM TAX CREDIT. Businesses located in Maryland that provide approved work-based learning programs for secondary or postsecondary student employees may be eligible for tax credits based on the number of qualified participating student employees or wages paid for these employees.
j. EMPLOYER-PROVIDED LONG-TERM CARE INSURANCE TAX CREDIT. A credit may be claimed for costs incurred by an employer who provides long-term care insurance as part of an employee benefit package.
k. ONE MARYLAND ECONOMIC DEVELOPMENT TAX CREDIT. Businesses may claim a credit against the project cost and startup cost to establish, relocate or expand a business in a distressed county in Maryland.
l. COMMUTER TAX CREDIT. Businesses may claim a credit for the cost of providing qualifying commuter benefits to the business entities' employees.
m.MARYLAND-MINED COAL TAX CREDIT. A qualifying cogenerator, small power producer or electricity supplier may claim a credit for the purchase of Maryland-mined coal.
n. LONG-TERM EMPLOYMENT OF QUALIFIED EX-FELONS TAX CREDIT. Businesses that employ qualified ex-felons under a program approved by the Department of Labor, Licensing and Regulation may be eligible for a credit based upon wages paid to the qualified employee.
o. GREEN BUILDING TAX CREDIT. A business that constructs or rehabilitates a building that conforms to specific standards intended to save energy and to mitigate environmental impact may take a credit for a portion of the cost.
p. CELLULOSIC ETHANOL TECHNOLOGY RESEARCH AND DEVELOPMENT TAX CREDIT. Businesses and individuals may claim a credit of up to 10% of the qualified research and development expenses incurred in Maryland for technology that is used to develop cellulosic biomass for conversion to ethanol fuel.
q. BIO-HEATING OIL TAX CREDIT. Businesses and individuals may claim a credit of 3 cents for each gallon of heating oil with a blend of at least 5% biodiesel purchased for space or water heating with a maximum credit of $500.
For additional information regarding any of the above income tax credits, see the instructions provided on Form 500CR, Business Tax Credits. To obtain this form, see page ii, “Getting Help”.
NOTE: If you claim a business tax credit for items a, b, c, d, h, n, and p an addition to income must be included on line 5. See Instruction 12.
If you had a rehabilitation that you believe qualified for the Heritage Structure Rehabilitation Tax Credit, see Form 502H for qualifications and instructions.
19 Local income tax and local credits
Maryland counties and Baltimore City levy an income tax which is a percentage of Maryland taxable net income. Use the LOCAL TAX RATE CHART and the LOCAL TAX WORKSHEET to figure your local income tax. Use the county (or Baltimore City) you resided in on the last day of the tax year and which you showed in the box at the top of Form 502 or 503. Military taxpayers should refer to Instruction 29.
Local earned income credit. If you entered an earned income credit on line 25 of Form 502 or line 7a of Form 503, complete the LOCAL EARNED INCOME CREDIT WORKSHEET.
Local poverty level credit. If you entered a poverty level credit on line 26 of Form 502 or line 7b of Form 503, complete the LOCAL POVERTY LEVEL CREDIT WORKSHEET.
If you file Form 503, add the boxes for local earned income credit (10a) and local poverty level credit (10b) and enter on line 10. SPECIAL NOTE: If you and your spouse were domiciled in different taxing jurisdictions, you should file separate Maryland returns even though you filed a joint federal return. (See Instruction 7.) However, if you choose to file a joint Maryland return, please use the following instructions. Enter both counties and/or local jurisdictions in the county, city, town or special taxing area box on the front of your return. If the local tax rates are the same, complete the worksheets as instructed and attach a schedule showing the local tax for each jurisdiction based on the ratio of each spouse's income to the total income. Also note the words “separate jurisdictions” on line 31 of Form 502 or line 9 of Form 503. If the local tax rates are different, calculate a ratio of each spouse's income to total income. Then apply this ratio to the taxable net income and calculate the local tax for each spouse separately using the appropriate local tax rates. Enter the combined local tax on line 31 of Form 502 or line 9 of Form 503 and write the words “separate jurisdictions” on that line. Attach a schedule showing your calculations.
20 Total Maryland tax, local tax and contributions
Add your Maryland tax from line 30 of Form 502 or line 8 of Form 503 and your local tax from line 35 of Form 502 or line 11 of Form 503 and enter on line 36 of Form 502 or line 12 of Form 503. Add to your tax any contribution amounts and enter the total on line 40 of Form 502 or line 16 of Form 503.
CHESAPEAKE BAY AND ENDANGERED SPECIES FUND
You may contribute any amount you wish to this fund. The amount contributed will reduce your refund or increase your balance due.
DEVELOPMENTAL DISABILITIES ADMINISTRATION WAITING LIST EQUITY FUND
You may contribute any amount you wish to this fund. The amount contributed will reduce your refund or increase your balance due.
MARYLAND CANCER FUND
You may contribute any amount you wish to this fund. The amount contributed will reduce your refund or increase your balance due.
IMPORTANT: If there are not sufficient credits or other payments to satisfy both your tax and the contribution you have designated, the contribution amount will be reduced. If you have entered amounts for contributions to multiple funds, any reduction will be applied proportionately.
21 Taxes paid and refundable credits
Write your taxes paid and credits on lines 41-44 of Form 502 or lines 16 and 17 of Form 503. Instructions for each line:
Line 41 of Form 502.
Line 17 of Form 503. MARYLAND TAX WITHHELD. Write the total Maryland and local tax withheld as shown on the wage and tax statements (Forms W-2, W-2G or 1099) you have received. Add the amounts identified as Maryland and local tax withheld on each form and write the total on this line. Attach Forms W-2, W-2G and 1099 to your return if Maryland tax is withheld. You will not get credit for your withholding if you do not attach Forms 1099, W2 or W2G, substantiating Maryland withholding.
IMPORTANT: Your wage and tax statements contain many numbers. Be sure you add only the amounts identified as Maryland and local tax withheld.
Line 42. ESTIMATED TAX PAYMENTS.
Enter on line 42 the total of:
- Maryland estimated tax payments;
- Amount of overpayment applied from 2009 return; AND
- Payment made with a request for an automatic extension of time to file your 2010 return. (See the instructions on Form 502E.)
- Report the income tax withheld on your behalf as an estimated payment, if you participated in a nonresident real estate transaction as an individual. Enter code number 506 in one of the code number boxes to the right of the telephone number area. The tax will be identified as Maryland tax withheld on the Form MW506NRS.
NOTE: Estimated tax payments are required if you expect to receive any income (like pensions, business income, capital gains, lottery, etc.) from which no tax or not enough Maryland tax will be withheld. Read the instructions on the back of Form 502D, Maryland Personal Declaration of Estimated Income Tax.
Line 43 of Form 502.
Line 18 of Form 503. REFUNDABLE EARNED INCOME CREDIT. If one-half of your federal earned income credit is greater than your Maryland tax you may also be eligible for a refundable earned income credit. This credit is the amount by which 25% of your federal earned income credit exceeds your Maryland tax liability. Complete the REFUNDABLE EARNED INCOME CREDIT WORKSHEET and enter the result on this line.
Line 44. REFUNDABLE INCOME TAX CREDITS. Enter the total of your income tax credits as listed below:
- NEIGHBORHOOD STABILIZATION TAX CREDIT. If you own and live in a home in certain areas of Baltimore City or Baltimore County you may qualify for this credit. See instructions for Form 502CR.
- HERITAGE STRUCTURE REHABILITATION TAX CREDIT AND/ OR SUSTAINABLE COMMUNITIES TAX CREDIT. A credit is allowed for a certain percentage of qualified rehabilitation expenditures, as certified by the Maryland Historical Trust. Attach a copy of Form 502H, 502S, or both, if applicable, and the certifications.
- REFUNDABLE BUSINESS INCOME TAX CREDITS. One Maryland Economic Development Tax Credit and Biotechnology Investment Incentive Tax Credit, Clean Energy Incentive Tax Credit and Job Creation and Recovery Tax Credit. See Form 500CR for qualifications and instructions.
- IRC SECTION 1341 REPAYMENT. If you repaid an amount reported as income on a prior year tax return this year that was greater than $3,000, you may be eligible for an IRC Section 1341 repayment credit. For additional information, see Administrative Release 40.
- FORM 1041 SCHEDULE K-1 NONRESIDENT PTE TAX. If you are the beneficiary of a trust for which nonresident PTE tax was paid, you may be entitled to a share of that tax.
Complete and attach Form 502CR with Form 502.
22 Overpayment or balance due
Calculate the Balance Due (line 46 of Form 502 or line 20 of Form 503) or Overpayment (line 47 of Form 502 or line 21 of Form 503). Read instructions under UNDERPAYMENT OF ESTIMATED TAX and then go to BALANCE DUE or OVERPAYMENT.
UNDERPAYMENT OF ESTIMATED TAX
If you had income from which tax was not withheld or did not have enough tax withheld during the year, you may have owed an estimated tax. All taxpayers should refer to Form 502UP (in this booklet) to determine if they owe interest because they paid too little estimated tax during the year.
If you owe interest, complete Form 502UP and write the amount of interest (line 18 of Form 502UP) in the appropriate box on line 50 of Form 502 or line 22 of Form 503. Attach Form 502UP.
Generally, you do not owe interest if:
- you owe less than $500 tax on income that is not subject to Maryland withholding, OR
- each current year payment, made quarterly as required, is equal to or more than one-fourth of 110% of last year's tax, that was developed OR
- you made quarterly payments during the year that equal 90% of this year's tax.
Special rules apply if your gross income from farming or fishing is at least two-thirds of your total estimated gross income. See page 2 of Form 502UP for additional information and instructions for claiming this exemption from interest.
INTEREST FOR LATE FILING
Interest is due at the rate of 13% annually or 1.08% per month for any month or part of a month that a tax is paid after the original due date of the return. Enter any interest due in the appropriate box of your tax return.
Penalty up to 25% may be assessed by the Revenue Administration Division for failing to pay any tax, or failing to file a tax return, when due.
Enter the total of interest for underpayment of estimated tax and interest for late filing on line 50 of Form 502 or line 22 of Form 503.
If you file Form 502 and have a balance due on line 46, add this amount to any amount on line 50. Put the total on line 51.
If you file Form 503 and have a balance due on line 20, add this amount to any amount on line 22. Put the total on line 23.
Pay your balance due (unless it is less than $1.00). Go to Instructions 23 and 24 regarding signatures, attachments and mailing.
If you file Form 502 and have an overpayment on line 47, the Revenue Administration Division will refund any amount of $1.00 or more. If you want part or all of your overpayment applied to your 2011 estimated tax, then write the amount you want applied on line 48. Overpayments may first be applied to previous years' tax liabilities or other debts as required by federal or state law. If you must pay interest for underpayment of estimated tax, enter the amount of interest from line 18 of Form 502UP on line 50. Subtract lines 48 and 50 from your overpayment (line 47). This is the amount of your refund. Write this amount on line 49. No refunds of less than $1.00 will be sent. If the amount of interest charges from Form 502UP on line 50 is more than the overpayment on line 47 of Form 502, enter zero (0) on line 48 and 49. Then subtract line 50 from line 47 and enter the result on line 51.
If you prefer you may leave line 50 blan and the Revenue Administration Division will figure the interest charges and send you a bill. Go to Instructions 23 and 24 regarding signatures, attachments and mailing.
If you file Form 503 and have an overpayment on line 21, this is the amount of your refund. Overpayments may first be applied to previous years' tax liabilities or other debts as required by federal or state law. No refunds of less than $1.00 will be sent.
Go to Instructions 23 and 24 regarding signatures, attachments and mailing.
The length of time you have for claiming a refund is limited. See Instruction 28 for more information.
DIRECT DEPOSIT OF REFUND
In order to comply with new banking rules, we ask you to indicate on your return if the state refund is going to an account outside the United States. If you indicate that this is the case, do not enter your routing and account number, as the direct deposit option is not available to you. We will send you a paper check. Complete lines 52a, b and c of Form 502 or lines 24a, b and c of Form 503 if you want us to
deposit your refund directly into your account at a bank or other financial institution (such as a mutual fund, brokerage firm, or credit union) in the United States.
CAUTION! Check with your financial institution to make sure your direct deposit will be accepted and to get the correct routing and account numbers. The State of Maryland is not responsible for a lost refund if you enter the wrong account information.
Line 52a of Form 502.
Line 24a of Form 503. Check the appropriate box to identify the type of account that will be used (checking or savings). You must check one box only or a refund check will be mailed.
Line 52b of Form 502.
Line 24b of Form 503. The routing number must be nine digits. If the first two digits are not 01 through 12 or 21 through 32, the direct deposit will be rejected and a check will be mailed.
If you are not sure of the correct routing number or if your check states that it is payable through a financial institution different from the one at which you have your checking account, contact your financial institution for the correct routing number.
Line 52c of Form 502.
Line 24c of Form 503. The account number can be up to 17 characters (both numbers and letters). Omit spaces, hyphens and special symbols. Enter the number from left to right.
If we are notified by the financial institution that the direct deposit is not successful, a refund check will be mailed to you.
Please have a bank statement for the deposit account available if you contact us concerning the direct deposit of your refund.
Entering your bank account routing number, account number and account type in the area provided on your Maryland income tax return to request a direct deposit of your income tax refund authorizes the Comptroller's Office to disclose this information and your refund amount to the Maryland State Treasurer's Office who performs banking services for the Comptroller's Office.
SPLITTING YOUR DIRECT DEPOSIT
If you would like to deposit portions of your refund (Form 502, line 49 or Form 503, line 21) to multiple accounts, do not complete any direct deposit information on your income tax return (Form 502 or 503). Instead, you must enter code number 588 in one of the code number boxes located to the right of the telephone number area on your return, complete, and attach Form 588.
NOTE: you may not use Form 588 if you are filing Form 502INJ, Maryland Injured Spouse Claim Form, or if you plan to deposit your refund in a bank outside the United States.
23 Telephone numbers, code number, signatures and attachments
Enter your telephone numbers and sign and dateyour return. Be sure to attach all required forms, schedules and statements.
If special circumstances apply, you may not owe interest for underpayment of estimated tax. Enter the applicable code number in one of the code number boxes located to the right of the telephone number area. Enter code 300 if you are a farmer or fisherman, 301 if your income was received unevenly throughout the year, or 302 if 90% of your taxable income is taxable by another state and the underpayment is not greater than the local tax. Attach your completed Form 502UP if you have entered code 301.
If another person prepared your return, that person must also sign the return and enter their Social Security number or preparer's tax identification number (PTIN). The preparer declares, under the penalties of perjury, that the return is based on all information required to be reported of which the preparer has knowledge.
Income tax preparers who, for compensation, completed 200 or more original Maryland individual income tax returns (paper and electronic forms) for Tax Year 2009 are required to file all original individual income tax returns electronically for Tax Year 2010, except when a taxpayer specifically requests a preparer to file by paper or when a preparer has received a valid written waiver from the Comptroller.
The threshold determination for the electronic filing requirement is 100 for Tax Year 2011 and forward.
At the bottom of the return at the signature area, we have provided a check box for you to authorize your preparer to discuss your return with us. Another check box is provided for you to authorize your preparer not to file your return electronically.
Penalties may be imposed for tax preparers who fail to sign the tax return and provide their Social Security number or preparer's tax identification number, or who failed to file electronically when required.
You must sign your return. Your signature(s) signifies that your return, including all attachments, is, to the best of your knowledge and belief, true, correct and complete, under the penalties of perjury.
Both husband and wife must sign a joint return. If your spouse cannot sign because of injury or disease and tells you to sign, you can sign your spouse's name in the proper space on the return followed by the words “By (your name), Husband (or Wife).” Be sure to also sign in the space provided for your signature. If a power of attorney is necessary, complete federal Form 2848 and attach to your return.
Be sure to attach wage and tax statements (Form W-2, W-2G and 1099) to the front of your return if Maryland tax was withheld. Also attach all forms, schedules and statements required by these instructions. Place your check or money order on top of your wage and tax statements and fasten with one staple on the front of your tax return.
24 Electronic and PC filing, mailing and payment instructions, deadlines and extension.
ELECTRONICALLY FILING YOUR RETURN
The fastest way to file your return and receive your refund is to file electronically and request direct deposit. If you request direct deposit on your electronic return your refund should be in your bank account within 72 hours of acknowledgement from the Revenue Administration Division. You may request electronic funds withdrawal (direct debit) payments on your electronic return. If you both file and pay electronically, your return is due April 15th. However, you will have until April 30th to make your electronic payment. Note: An online payment where the bank mails the Comptroller of Maryland a paper check is not considered an electronic payment. You may file your return electronically through your personal computer. Do not send a paper copy of the return you electronically filed. For more information, please visit: http://www.marylandtaxes.com/
ELECTRONIC PAYMENT OF BALANCE DUE
If your paper or electronic tax return has a balance due, you may pay electronically at http://www.marylandtaxes.com/ by selecting BillPay. The amount that you designate will be debited from your bank or financial institution on the date that you choose.
PAYMENT BY CHECK OR MONEY ORDER
Make your check or money order payable to “Comptroller of Maryland.” Use blue or black ink. Do not use red ink or pencil. Write the type of tax and year of tax being paid on your check. It is recommended that you include your Social Security number on check. Mark an “X” in the box for “Payment Enclosed” on the envelope.
DO NOT SEND CASH.
PAYMENT BY CREDIT CARD
You may pay your balance due by using MasterCard, Discover, American Express or Visa. Credit card payments are considered electronic payments for the purpose of the April 30th extended due date if you filed your return electronically by April 15th.
Credit card payments may be made by telephone or over the Internet. The internet option is available to everyone. You must have filed a 2009 Maryland income tax return to use the telephone option.
Both options will be processed by Official Payments Corporation who will charge a convenience fee on the amount of your payment. The State will not receive this fee. You will be told the amount of the fee before you complete your transaction. Do not include the amount of the convenience fee as part of the tax payment.
To make a credit card payment call 1-800-2PAYTAX (1-800-272-9829) or visit their Web site at www.officialpayments.com. Enter jurisdiction code 3000 when prompted.
This year at the bottom of the return in the signature area, we have provided a checkbox just above the signature for you to indicate that you agree to receive your statement of refund (Form 1099-G) electronically. Starting in early 2012, electronic Form 1099-G may be downloaded and printed from our secure Web site. At this Web site, you may also request to receive Form 1099-G in paper form.
MAILING YOUR RETURN
If you are mailing your return please use the envelope provided in this booklet. If the envelope is lost, mail your return to:
Comptroller of Maryland
Revenue Administration Division
Annapolis, Maryland 21411-0001
Sending your return by certified mail will not result in special handling and may delay your refund.
Private Delivery Services . If you wish to send your items by a private delivery service (such as FedEx or UPS) instead of the U.S. Postal Service, use the following address:
Private Delivery Service Address:
Comptroller of Maryland
Revenue Administration Division
80 Calvert Street
Annapolis, Maryland 21401
Returns must be mailed by April 15, 2011, for calendar year taxpayers. Persons filing on a fiscal-year basis should see Instruction 25.
EXTENSION OF TIME TO FILE
Follow the instructions on Form 502E to request an automatic extension of the time to file your 2010 return. Filing this form extends the time to file your return, but does not extend the time to pay your taxes. Payment of the expected tax due is required with Form 502E by April 15, 2011. You can file and pay by credit card or electronic funds withdrawal (direct debit) on our Web site. If no tax is due and you requested a federal extension, you do not need to file Form 502E or take any other action to obtain an automatic six month extension. To obtain this form, see page ii, “Getting Help”. If no tax is due and you did not request a federal extension, file your extension online at http://www.marylandtaxes.com/ or by phone at 410-260-7829. Only submit Form 502E if tax is due.
COMBAT ZONE EXTENSION
Maryland allows the same six-month extension for filing and paying personal income taxes for military and support personnel serving in a designated combat zone or qualified hazardous duty area and their spouses as allowed by the IRS. For more detailed information visit http://www.irs.gov/. If you are affected by the extension enter 912 in one of the code number boxes to the right of the telephone number area.
25 Fiscal year
You must file your Maryland return using the same tax year and the same basis (cash or accrual) as you used on your federal return.
To file a fiscal year return, complete the fiscal year information at the top of Form 502, and print “FY” in bold letters in the upper left hand corner of the form. Whenever the term “tax year” appears in these instructions, fiscal year taxpayers should understand the term to mean “fiscal year.” Use the 2010 forms in this package for fiscal years which begin during calendar year 2010.
Fiscal year returns are due on the 15th day of the 4th month following the close of the fiscal year.
26 Special instructions for part-year residents
Your return must show all income reported on your federal return, regardless of when or where earned. However, you are permitted to subtract income received when not a resident of Maryland. The following instructions describe the adjustments which must be made for a part-year resident return and returns filed by certain military taxpayers (see Instruction 29) and married couples who file a joint return when one spouse is not a resident of Maryland.
a. You must file Form 502; you cannot use Form 503.
b. Whenever the term “tax year” is used in these instructions, it means that portion of the year in which you were a resident of Maryland. If you began residence in Maryland in 2010, the last day of the “tax year” was December 31, 2010. If you ended residence in Maryland in 2010, the last day of the “tax year” was the day before you established residence in another state.
c. Complete the name and address information at the top of Form 502.
d. Complete the county, city, town or taxing area information using Instruction 6. Use the county, city, town or taxing area of which you were a resident on the last day of your Maryland residence.
e. Complete the filing status area using the same filing status that you used on your federal return. Married couples who file joint federal returns may file separate Maryland returns under certain circumstances. See Instruction 7. If you are a dependent taxpayer, use filing status 6.
f. Complete the EXEMPTIONS area. You can claim the same number of exemptions that were claimed on your federal return. Additional exemptions are allowed for age and blindness for Maryland purposes which will be computed in this area.
g. Complete the PART-YEAR/MILITARY area on the front of Form 502. Place a “P” in the box and show the dates of residence in Maryland. Certain military taxpayers following these instructions should place an “M” in the box and enter the non-Maryland military income. If you are both part-year and military, place a “P” and “M” in the box. Married taxpayers with different tax periods filing a joint Maryland return should enter a “D” in the box, follow the remainder of this instruction and write “different tax periods” in the dates of residence area. Married taxpayers who file a joint return when one spouse is not a resident of Maryland should place a “P” in the part- year resident box and enter the name and the other state of residence of the nonresident spouse.
h. Enter on line 1 the adjusted gross income from your federal return for the entire year regardless of your length of residence.
i. Complete the ADDITIONS TO INCOME area using Instruction 12. If you had losses or adjustments to income on your federal return, write on line 5 those loss or adjustment items that were realized or paid when you were not a resident of Maryland.
j. Complete the SUBTRACTIONS FROM INCOME area using Instruction 13. You may include only subtractions from income that apply to income subject to Maryland tax. Include on line 12 any income received during the part of the year when you were not a resident of Maryland.
k. You must adjust your standard or itemized deductions and exemptions based on the percentage of your income subject to Maryland tax. Complete the MARYLAND INCOME FACTOR WORKSHEET to figure the percentage of Maryland income to total income.
l. If you itemize deductions, complete lines 17a and b. Prorate the itemized deductions using the following formula:
NET ITEMIZED DEDUCTIONS x MARYLAND INCOME FACTOR = MARYLAND ITEMIZED DEDUCTIONS
Enter the prorated amount on line 17 of Form 502 and check the Itemized Deduction Method box. Another method of allocating itemized deductions may be allowed. Please send your written request along with your completed Maryland return, a copy of your federal return including Schedule A and a copy of the other state's return. If the other state does not have an income tax, then submit a schedule showing the allocation of income and itemized deductions among the states. The Maryland return must be completed in accordance with the alternative method requested. This request should be sent to the Revenue Administration Division, Taxpayer Accounting Section (Special Allocations), P.O. Box 1829, Annapolis, MD 21404-1829.
m. If you are not itemizing deductions, you must use the standard deduction. The standard deduction must be prorated using the Maryland income factor. Calculate the standard deduction using a worksheet in Instruction 16. Prorate the standard deduction using the following formula:
STANDARD DEDUCTION x MARYLAND INCOME FACTOR = PRORATED STANDARD DEDUCTION
Enter the prorated amount on line 17 of Form 502 and check the Standard Deduction Method box.
n. The value of your exemptions (line 19) must be prorated using the Maryland income factor. Prorate the exemption amount using the following formula:
TOTAL EXEMPTION AMOUNT x MARYLAND INCOME FACTOR = PRORATED EXEMPTION AMOUNT
Enter the prorated exemption amount on line 19 of Form 502.
o. You must prorate your earned income, poverty level and refundable earned income credits using the Maryland income factor.
EARNED INCOME CREDIT
Multiply your federal earned income credit by the Maryland income factor from line 3 of the MARYLAND INCOME FACTOR WORKSHEET. Enter the result as the federal earned income credit amount on line 2 of the STATE EARNED INCOME CREDIT WORKSHEET in Instruction 18 and on line 1 of the LOCAL EARNED INCOME CREDIT WORKSHEET in Instruction 19.
POVERTY LEVEL CREDIT
Multiply the amount from line 5 of the STATE POVERTY LEVEL CREDIT WORKSHEET in Instruction 18 by the Maryland income factor and enter this amount as the credit on line 26 of Form 502.
Multiply the amount from line c of the LOCAL POVERTY LEVEL CREDIT WORKSHEET in Instruction 19 by the Maryland income factor and enter this amount as the credit on line 33 of Form 502.
REFUNDABLE EARNED INCOME CREDIT
Multiply your federal earned income credit by the Maryland income factor from line 3 of the MARYLAND INCOME FACTOR WORKSHEET. Enter the result as the federal earned income credit amount on line 1 of the REFUNDABLE EARNED INCOME CREDIT WORKSHEET in Instruction 21.
p. Complete the remainder of the form using the line instructions.
27 Filing return of deceased taxpayer
Do not use the preprinted label. Enter code 321 in one of the code number boxes located to the right of the telephone number area. Use the following special instructions:
FILING THE RETURN
If an individual required to file an income tax return dies, the final income tax return shall be filed:
- by the personal representative of the individual's estate;
- if there is no personal representative, by the decedent's surviving spouse; or
- jointly by the personal representatives of each if both husband and wife are deceased.
If the spouse of the deceased taxpayer filed a joint federal return with the decedent, generally a joint Maryland return must be filed. (See Instruction 7.)
The word “DECEASED” and the date of death should be written after the decedent's name at the top of the form. The name and title of any person, other than the surviving spouse, filing the return should be clearly noted on the form. Attach a copy of the Letters of Administration or, if the return is filed solely by the surviving spouse, attach a death certificate.
KILLED IN ACTION
Maryland will abate the tax liability for an individual who is a member of the U.S. Armed Forces at death, and dies while in active service in a combat zone or at any place from wounds, disease, or injury incurred while in active service in a combat zone. To obtain an abatement, a return must be filed. The abatement will apply to the tax year in which death occurred, and any earlier tax year ending on or after the first day the member served in a combat zone in active service.
Maryland will also abate the tax liability of an individual who dies while a military or civilian employee of the United States, if such death occurs as a result of wounds or injury incurred outside the United States in a terrorist or military action.
In the case of a joint return, Maryland applies the same rules for these taxpayers as does the IRS. For more information on filing a return, see Publication 3 Armed Forces Tax Guide available at http://www.irs.gov/. Place code number 915 in one of the boxes marked “code numbers” to the right of the telephone number area, if you are filing a return for a taxpayer who was killed in action meeting the above criteria.
ALL OTHER RETURNS
If the return is filed by the personal representative, write the words “Estate of” before the decedent's first name and the date of death after the last name. The name and title of the person filing the return should be clearly noted on the form. Attach a copy of the Letters of Administration.
If there is no personal representative, write the word “deceased” and the date of death after the decedent's last name. The name and title of the person filing the return should be clearly noted on the form. Attach a copy of federal Form 1310.
28 Amended returns
If you need to change a return that you have already filed, or if the IRS changes your return, you must file an amended return.
FILING AN AMENDED RETURN
You must file an amended return to make certain changes to your original return. These include changes in income, filing status, amount of deductions, the number of exemptions, and the amount of additions to income and subtractions from income.
Note: Changes made as part of an amended return are subject to audit for up to three years from the date the amended return is filed.
Use Form 502X to file an amended return and include a copy of your federal return. Form 502X and instructions may be obtained by calling 410-260-7951 or by visiting http://www.marylandtaxes.com/.
CHANGES TO YOUR FEDERAL RETURN
If the IRS makes any changes to your federal return, you must notify the State of Maryland. Send notification to the Maryland Revenue Administration Division within 90 days of the final determination of the changes by the IRS.
If you file an amended federal return that changes your Maryland return, you must file an amended Maryland return.
IF YOUR ORIGINAL RETURN SHOWED A REFUND
If you expect a refund from your original return, do not file an amended return until you have received your refund check. Then cash the check; do not return it. If your amended return shows a smaller refund, send a check for the difference with the amended return. If your amended return shows a larger refund, the Revenue Administration Division will issue an additional refund check.
Do not file an amended return until sufficient time has passed to allow the original return to be processed. For current year returns, allow at least six weeks.
Generally, a claim for a refund or overpayment credit must be filed within three years from the date the original return was filed or within two years from the date the tax was paid, whichever is later. A return filed early is considered filed on the date it was due. If a claim is filed within three years after the date the return was filed, the credit or refund may not be more than that part of the tax paid within three years, plus extension of time for filing the return, prior to the filing of the claim. If a claim is filed after the three-year period, but within two years from the time the tax was paid, the refund or credit may not be more than the tax paid within two years immediately before filing the claim for a refund or credit.
A claim for refund based on a federal net operating loss carryback must be filed within three years from the due date of the return for the tax year of the net operating loss.
If the claim for refund resulted from a federal adjustment or final decision of a federal court which is more than three years from the date of filing the return or more than two years from the time the tax was paid, a claim for refund must be filed within one year from the date of the adjustment or final decision.
If the claim for refund resulted from a notification received from another state for income taxes due which is more than three years from the date of filing the Maryland return or more than two years from the time the tax was paid, a claim for refund resulting from a credit for taxes paid to that state must be filed within one year of the date of the notification that the other state's tax was due.
If the claim for refund or credit for overpayment resulted from a final determination made by an administrative board or an appeal of a decision of an administrative board, that is more than three years from the date of filing the return or more than two years from the time the tax was paid, the claim for refund must be filed within one year of the date of the final decision of the administrative board or final decision of the highest court to which an appeal of the administrative board is taken.
No refund for less than $1.00 will be issued. No payment of less than $1.00 is required.
29 Special instructions for military taxpayers
See Administrative Release 1.
MILITARY PERSONNEL WHO ARE LEGAL RESIDENTS OF MARYLAND
1 - without overseas pay Must file a resident return (Form 502 or Form 503) and report all income from all sources, wherever earned. You must calculate the local portion of the tax regardless of whether you were stationed in Maryland or not. The location of your legal residence determines which county should be entered on your return. See Instructions 6 and 19. If you filed a joint federal return, see Instruction 7.
2 - with overseas pay Same as above, may subtract up to $15,000 in military pay earned outside U.S. boundaries or possessions, depending upon total military income. If you filed a joint federal return, see Instruction 7.
MILITARY PERSONNEL WHO ARE LEGAL RESIDENTS OF ANOTHER STATE
Superseded - Military personnel and their spouses who are legal residents of another state should see the Maryland Nonresident Tax Booklet and Administrative Release 1.
30 Privacy act information
The Tax-General Article of the Annotated Code of Maryland authorizes the Revenue Administration Division to request information on tax returns to administer the income tax laws of Maryland, including determination and collection of correct taxes. Code Section 10-804 provides that you must include your Social Security number on the return you file. This is so we know who you are and can process your return and papers.
If you fail to provide all or part of the requested information, then exemptions, exclusions, credits, deductions or adjustments may be disallowed and you may owe more tax. In addition, the law provides penalties for failing to supply information required by law or regulations.
You may look at any records held by the Revenue Administration Division which contain personal information about you. You may inspect such records, and you have certain rights to amend or correct them.
As authorized by law, information furnished to the Revenue Administration Division may be given to the United States Internal Revenue Service, a proper official of any state that exchanges tax information with Maryland and to an officer of this State having a right to the information in that officer's official capacity. The information may be obtained in accordance with a proper legislative or judicial order.
Maryland Tax Help Links
- » Maryland Form 502
- » Maryland Form 502B
- » Maryland Form 502CR
- » Maryland Form 502D
- » Maryland Form 502SU
- » Maryland Form 502UP
- » Maryland Form 502V
- » Maryland Form EL101
- » Maryland Form EL102
- » Additional Maryland forms
- » Additional Maryland State Income Tax Return Form, e-File, and Government Information
- » Access tax help for additional states