Instructions For Maryland Form 500 - Corporation Income Tax Return

inwme

Assistance

carryback

lngloss.

Forthetaxableyaarinwhiianetoperatingloss

catbns

tktns

Is required when claiming the corresponding net

opelating

Ices deduction. see the speck

inkxmation.

frcm

Infhecaseofanaf6ltatedgrcupofcorparationsfil-

must calculate

bssendspecialdeckrctionsbasedonitsseparatefed-

eral taxable income and loss. The deducbons

cala.hted

ifcations.

Instruc-

tiOllS.

apportionment.

lnstn~Uions

1oC or the Instructions provkfed

for Form 506CR

shown in the table below.

Period

1/111967 to 6/30/1975

7/l/1975

71111962

l/111984 to 12/31/1984

l/111965 to 12/31/1965

l/1/1966

l/1/1991 to V/31/1992

l/1/1993

If unable to file Form 500

506E

- Application for Extension of Time to File Cor-

tbranexten&noftimetofile,butinnocas-ecanan

Therequestforextensionoftimetofilewillbeauto-

matically granted for six months and will not be

a-, pr&ded that:

the15thdayofthe3rdmordhfoll~ngthedoseof

with the Internal Revenue

Theappiiiextendsonlyfhetimeallowedtofile

additional

609E.

Estimated

with Form 5OODP - Declaration of Estimated Corpom-

tionlncomeTax.lftheonporationdoesnothavethe

KkJchem,Foml6OOD~belised.

areduebythe15thdayofthe4th,6th,9thand12th

period.

renttaxableyearor100%ofthetaxdevelopedforthe

aMeyearor100XofthetaxdRlelopedfortheprior

5WDP or 5OOD. (Form 5O9D is induded in this booklet.)

Audits

and amendments are subject

Yw may file an appeal with the Maryland Tax Court

Fedetalincometaxlawpmvidesforbothac@tal

tlvely

addedtofederaltaxableinccme.

theitemsoffederaltaxableincomereportedforany

taxableyearcrperiodareadjuatedbytheIRSandwfll

arate

Taxable

Income The starting point for Form 500 is

In the event of revision and assessment

or reduced

to 12LW1989

12%

the taxable income as developed for the federal

refund, the Comptroller will notity

the corporation. l f in

11111990 to 12i31/1990

13%

disagreement with the assessment or denial of the

income tax return after net operating loss and special

12%

deductions for dividends. (See “Specific Instrudions”

refund, the corporation may file with the Compliince

to 12!31/2003

13%

for line 1.) No modiication

of the federal net operating

Division a written request for

revision of the assess-

loss or special deductions is allowed under Maryland

ment or reconsideration of the refund denial. The

(The rate for calendar year 2004 will be

request, in either case, must be done by submiing an

tax law except in the case of a Foreign Source

set and availawe by 10/l/2003.)

Dividend Subtraction. For more information see

application for an informal hearing with the Compli-

A penalty is applicable for late filing of tax returns

Administrative Release No. 18.

ance Division within 30 days of the assessment or

and/or late payment of any taxes due. Additional

denial of the refund.

The federal net operating loss deduction is effec-

penalties are applicable for the filing of false, fraudu-

Failure to file a written request or attend the

tively allowed for the Maryland filing by using federal

lent or frivolous

returns and civil and/or criminal fines

taxable income. The federal

provisions for carryback

informal hearing will result in the assessment or denial

and imprisonment may apply.

and carryover also apply for purposes

of the Maryland

of refund becoming final and non-appealable.

In the case of delinquent taxes, the State will record

return & you are fbkowing

the additional carry-

a lien and judgment and proceed with legal action as

back

provisions

claiming

the

bonus

depreciation

within 30 days of a final determination by the Compli-

necessary to effect coke&on

of the balance due.

based on the Federal Jobs Creation and Worker

ance Division hearing officer.

Act (JCWAA)

of 2002. For more informa-

Amended Returns To correct an error in a pre-

OTHER MATIERS

tion regarding the JCWAA, see Administrative

viously filed return,

complete and submit Form 500X -

Release No. 36. l f an election is made to relinquish a

Extension ofTime to File

Amended Corporation Income Tax Return. Attach

and to carryover the net operating loss, a

by the due date, a corporation must submit Form

copies of the documents required and filed with the

copy of the federal election must be induded with the

Internal Revenue Service. l f the conedions

affect only

Maryland return for the taxable year of the net cperat-

poration

Income

Tax

Return.

Maryland

law

provides

the Maryland return and not items of federal taxaMe

income, include a thorough explanation of the

extension be granted for more than 6 months beyond

changes.

the original

due date.

occurs, that current operating IDss is used to offset

Each affeded

member of a consolidated federal fil-

Maryland modiications. If the total of addii modtt-

ing must also include a schedule reconciling the

exceeds the total subtraction modiications in

amendments of each member corporation to the con-

the taxable year of the net operating loss. a modii

solidated

totals.

tiontorecapturetheexcessofaddiisoversubtrao

1) the application is properly filed and submitted by

loss carryback

and carrycver.

Any carryover is effeo

klstructions

the tax year or period, or by the original due date

allowed when reporting federal taxable income

for additional

required for filing of the federal return:

on the Maryland return. The carryback

d e d u c t i o n i s

The federal special deduction

for dividends is

2) full payment of any balance due is submkted

with

not allowed on the Maryland return and must be

treated as a current year deduction. It is deducted

the application; and

federal taxable income befwe

application of the

an appliion for e&ens& of time has been filed

Do not attach amended returns to an original cor-

net opelatlng

loss deductlon.

The deductiofl

reduces

Service or an acceptable

poration income tax tiling.

taxable income and may create a net opemting

loss.

reason has been pmvided

with the Maryland applii

Internal

Revenue Service

(IRS)

Adjustments If

cation.

ing a consolidated

return for federal purposes, each

member corporarJon

any net operating

the annual income tax return and not the time allowed

increase Maryland taxable income, an amended

topaythetax.

must be

return together with a cow

of the final IRS adjustment

For

information regarding extensions of

In strict accordance with federal income tax

repot-l must be submii within 90 days.

time to file, see the instructions provided with Form

provisions, as if the member corporation is not

Each affected member of a ccnsolktated

federal fil-

(Form 500E is included in this booklet.)

involved in a consolidated filing and files a separate

ing must also indude

a schedule reconciling the sep

return with the Internal Revenue Service.

Income Tax

Every

corporation

that

rea-

adjustments of each member corporation to the

sonably expects their Maryland taxable income to

Maryland modifled income is federal taxable

consolidated

totals.

develop a tax in excess of $1,000 for the taxable year

income after statutory addition and subtraction mod-

Refund Claims

Generally, a claim for a refund

or period must make estimated income tax payments

For a listing of the statutory addition

and

(amended return) must be filed within 3 years from

subtraction

modiications.

see

the

Specific

the date the original return was filed or within 2

years from the date the tax was paid, whichever is

estimated tax packet containing the Form 500DP

Maryland apportfoned

i n c o m e i s a p p l i c a b l e o n l y

later. A return filed early is considered filed on the

for multktate

corporations and is de&oped

by apply-

date it was due.

Declaration of estimated income tax payments

ing the apportionment factor to Maryland modified

If the claim for refund resulted from an Internal

income.

For

explanation

apportionment

provi-

Revenue Service adjustment or final de&ion o f a

months following the beginning of the tax year or

sions, see the Instructions for Computation of Appor-

federal court which is more than 3 years from the

The total estimated tax payments tbr the year

tionment

Factor.

date of filing the return or more than 2 years from

must be at least 90% of the tax developed for the cur-

the time the tax was paid, a claim for refund must

Maryland taxable Income ‘is federal taxable

income

after

statutory

modifications

and

applicable

be filed within 1 year from the date of the adjust-

prior tax year. At least 25% of the total estimated

ment or final decision.

tax must be remitted

by each of the four installment

B u s i n e s s T a x Credits

For

information

about

A claim for refund based on a federal

net operat-

due dates.

credits against the tax see Speckic

for line

ing loss carryback must be filed within 3 years after

In the case of a short tax period the total estimated

Busi-

the due date of the return for the tax year of the net

tax required is the same es for a regular taxable year:

ness Tax Credii. Form 5OOCR

is available from the

operating

loss.

90% of the tax developed for the current (short) tax-

Maryland Revenue Administration Division. (See

Taxpayer ldentiflcation

Required for Returns and

inside front cover of tax booklet to request forms.)

Other Documents. All returns, correspondence.

tax year. The minimum estimated tax for each of the

Tax, Interest and Penalty The corporate tax rate is

payments or other documents must indicate the

installment due dates is the total estimated tax

7% of Maryland taxable income for taxable years and

corporate name, Federal Employer Identification

required divided by the number of installment due

periods beginning in 1967 through 2002. The annual

Number, type of tax and tax year(s) to which the

dates occurring during the short tax year.

rate of interest charged for taxes clwed to the State is

document relates.

For additional information regarding estimated

All corporations are required to secure a

income tax, see the instructions provided with Form

Federal

Employer

Identification

Number

(FEIN)

from

Interest Rate

the Internal Revenue Service (IRS). The FEIN

is the

6 %

and Appeals

All items reported on Form

number used by the IRS for processing purposes

to 6/30/1962

9 %

500 are subject to audit, verification and revision,

and is also the primary number used by the Mary-

including items reported

for federal purposes. Returns

to 12/31/1983

15%

land Revenue Administration Division. For returns

to aUdk and adjustment

filed without the federal number a temporary num-

12%

for a period of 3 years from the date the return was

ber will be assigned for processing purposes until

13%

due (including extensions) or the date the return was

the actual number is provided.

filed, whkzhever

is later.

Instructions For Maryland Form 500 - Corporation Income Tax Return - 2002 Page 2

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