Instructions For Form 502cr - Personal Income Tax Credits

If the Maryland resident must file an individual nonresident return

• the maximum state tax rate (currently 4.75%), or

reporting the partnership, S corporation, LLC or business trust

• the tax rate imposed by the other state on the gain.

income, a separate Form 502CR must be completed for each state

PART B - CREDIT FOR CHILD AND DEPENDENT CARE

and submitted with a copy of the return filed with the other state. For

EXPENSES

both composite returns and individual returns, no credit is available

for taxes paid to states in Group III, or for taxes paid to cities or local

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

jurisdictions.

federal income tax return, Form 1040 or 1040A for tax year 2003,

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

Shareholders of S Corporations - Maryland resident shareholders

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

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

is phased out for taxpayers with federal adjusted gross incomes

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

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

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

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

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

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

ed for each state showing the following information:

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

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

_____________% x_____________

=______________________

PART C - QUALITY TEACHER INCENTIVE CREDIT

Stock ownership

Corporation taxable Line 2, Part A, Form 502CR

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

percentage

income

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

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

_____________ % x____________

=______________________

viduals who:

Stock ownership

Corporation tax

Line 7, Part A, Form 502CR

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

percentage

fessional certificate;

NOTE: A preliminary calculation using Form 502 must be made

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

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

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

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

evaluation for teaching;

the 502CR computation.

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

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

and

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

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

you will file.

unreimbursed portion qualifies for the credit.

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

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

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

rate column in the worksheet for each spouse.

unincorporated business franchise tax may claim a credit on Form

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

INSTRUCTIONS

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

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

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

for each qualifying teacher.

of the D.C. tax.

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

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

from your employer.

it for taxes paid to another state for gain recognized on installment

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

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

qualifying individual.

recognized in an earlier tax year. Credit is allowed against the state

income tax only. The gain must have been deferred for federal tax

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

purposes, but fully taxed in the year of the sale by another state

ment up to the maximum amount allowed for each qualifying

which does not recognize the deferral. The credit allowed is the

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

amount of the gain taxed in Maryland in the current year multiplied

Line 6. Enter the sum of line 5, Columns A and B. Also enter this

by the lesser of:

amount on line 3, Part H.

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 - 2003 Page 2

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