Instructions For Form 502cr - Personal Income Tax Credits

Shareholders of S Corporations - Maryland resident shareholders

recognized in an earlier tax year. Contact any office of the Revenue

can claim a credit for taxes paid by an S corporation to a state which

Administration Division to receive additional information for claiming

does not recognize federal S corporation treatment. A copy of the

this credit.

corporation return filed in the other state is required to be attached

PART B - CREDIT FOR CHILD AND DEPENDENT CARE

to the Maryland return. A separate Form 502CR should be complet-

EXPENSES

ed for each state showing the following information:

If you were eligible for a Child and Dependent Care Credit on your

federal income tax return, Form 1040 or 1040A for tax year 2001,

_____________% x_____________

=______________________

you may be entitled to a credit on your Maryland state income tax

Stock ownership

Corporation taxable Line 2, Part A, Form 502CR

return. The credit starts at 32.5% of the federal credit allowed, but

is phased out for taxpayers with federal adjusted gross incomes

percentage

income

above $41,000 ($20,500 for individuals who are married, but file

separate income tax returns). No credit is allowed for an individual

_____________ % x____________

=______________________

whose federal adjusted gross income exceeds $50,000 ($25,000 for

Stock ownership

Corporation tax

Line 7, Part A, Form 502CR

married filing separately). Use the chart below to determine the dec-

imal amount to be entered on line 3 of Part B.

percentage

NOTE: A preliminary calculation using Form 502 must be made

PART C - QUALITY TEACHER INCENTIVE CREDIT

before calculating the credit on Form 502CR. Complete lines 1

If you are a Maryland teacher, you may be able to claim a credit

through 24 on Form 502 to determine the amounts to be used for

against your State tax liability for tuition paid to take graduate-level

the 502CR computation.

courses required to maintain certification. This credit applies to indi-

The credit amount shown on line 8 of Part A, Form 502CR must

viduals who:

then be included as an addition to income on line 5 of the Form 502

a. currently hold a standard professional certificate or advanced pro-

you will file.

fessional certificate;

D.C. Unincorporated Business Franchise Tax - Self-employed

b. are employed by a county/city board of education in Maryland;

individuals and partners in a partnership that are subject to D.C.

c. teach in a public school and receive a satisfactory performance

unincorporated business franchise tax may claim a credit on Form

evaluation for teaching;

502CR. A copy of the D.C. return is required for self-employed indi-

viduals and for partners a K-1 or other statement from the partner-

d. successfully complete the courses with a grade of B or better;

ship showing the partner’s share of income and the partner’s share

and

of the D.C. tax.

e. have not been fully reimbursed for these expenses. Only the unre-

Sales of Residence in Another State - If you sell or exchange a

imbursed portion qualifies for the credit.

residence located in another state in the current taxable year you

Each spouse that qualifies may claim this credit. Complete a sepa-

may be entitled to a credit if you:

rate column in the worksheet for each spouse.

1. included the gain in your federal adjusted gross income;

INSTRUCTIONS

2. deferred recognition of gain for federal purposes on a previous

Line 1. Enter the amount of tuition paid for graduate-level courses

principal residence in a prior taxable year; and

for each qualifying teacher.

3. paid tax on the gain to the state where the previous principal res-

Line 2. Enter the amount received as a reimbursement for tuition

idence was located.

from your employer.

If you satisfy these three conditions do not complete Part A of Form

Line 4. The maximum amount of credit allowed is $1,500 for each

502 CR. Contact any office of the Revenue Administration Division

qualifying individual.

to receive additional information for claiming this credit.

Line 5. The credit is limited to the amount paid less any reimburse-

Installment Sales in Another State - You may be eligible for credit

ment up to the maximum amount allowed for each qualifying

for taxes paid to another state for gain recognized on installment

individual. Enter the lesser of line 3 or line 4.

sales proceeds, even if the other state required that the total gain be

CREDIT FOR CHILD AND

DEPENDENT CARE EXPENSES CHART

If your filing status is Married Filing Separately

Decimal Amount

For all other filing statuses, if your federal

and your federal adjusted gross income is:

adjusted gross income is:

At Least

But less than

At least

But less than

$0-

$20,501

.3250

$41,001

$20,501

$21,001

.2925

$41,001

$42,001

$21,001

$21,501

.2600

$42,001

$43,001

$21,501

$22,001

.2275

$43,001

$44,001

$22,001

$22,501

.1950

$44,001

$45,001

$22,501

$23,001

.1625

$45,001

$46,001

$23,001

$23,501

.1300

$46,001

$47,001

$23,501

$24,001

.0975

$47,001

$48,001

$24,001

$24,501

.0650

$48,001

$49,001

$24,501

$25,001

.0325

$49,001

$50,001

$25,001

or over

.0000

$50,001

or over

Instructions For Form 502cr - Personal Income Tax Credits - 2001 Page 2

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