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Category: Maryland

Maryland Additions to Income

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-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 here.

Lump Sum Distribution From a Qualified Retirement Plan

If you received this type of distribution, you will receive a Form 1099-R 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 the addition.

Other Additions to Maryland Income

  • Part-year residents: losses or adjustments to federal income that were realized or paid when you were a nonresident of Maryland.
  • Net additions to income from pass-through entities not attributable to decoupling.
  • Net additions to income from a trust as reported by the fiduciary.
  • S corporation taxes included on line 8 of Maryland Form 502CR, Part A, Tax Credits for Income Taxes Paid to Other States. (See state 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:
    1) Enterprise Zone Tax Credit, 2) Employment Opportunity Tax Credit, 3) Maryland Disability Employment Tax Credit, 4) Employment of Qualified Ex-Felons Tax Credit, 5) Research and Development Tax Credit, 6) Telecommunications Property Tax Credit and 7) Cellulosic Ethanol Technology Research and Development Tax Credit.
  • 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 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 were not used for qualified higher education expenses, and any refunds of contributions made under the Maryland College Investment Plan or to Maryland Broker-Dealer College Investment Plan, to the extent the contributions were subtracted from federal adjusted gross income and were not used for qualified higher education expenses. See Administrative Release 32 for more information.