Instructions For Maryland Form 510 - Pass-Through Entity Income Tax Return

year(s) to which the document relates.

Ali ‘pass-through entities are required to

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- Schedule K.

ALLOCATtON OF INCOME

wtne. Multistate S wrporations with one or more

l f using separate account-

tary. If using the apportionment methcd,

the share of credits from Forms 500CR and 502H

For additional information regarding employer

Taxable Year or Period

THE TAXABLE YEAR

(see front inside cover) and, in the case of non-

withholding tax, contact the Maryland Revenue

IS SHOWN AT THE TOP OF FORM 510.

T h e

resident individuals, the amount of income attrib-

Administration Division. (See back cover of packet

form used for filing must reflect the preprinted tax

utable to Maryland sources and the amount of tax

for address and phone number.)

year in which the pass-through entity’s tax year

paid on behalf of the partner or shareholder re-

begins. The same taxable year or period used

Privacy Notice

The Maryland Revenue Admin-

ceiving the Form K-l.

for the federal return must be used for Form 510.

istration Division requests tax return information

If the tax year of the pass-through entity is

Internal Revenue Service (IRS) Adjustments

to administer the income tax laws of Maryland,

other than a calendar year, enter the beginning

If the items on the federal return are adjusted by

including the determination and collection of the

and ending dates of the fiscal year in the space

the IRS, a copy of the final IRS adiustment report

correct taxes and other amounts. Failure to pro-

provided at the top of Form 610.

must be submitted within 90 days. Copies of the

vide all or part of the requested information may

Line 1- Number of partners, shareholders, or

IRS adjustment report must be submitted for each

result in the disallowance of claimed amounts

members Enter the number of partners,

partner’s or shareholder’s personal income tax

and an increased tax liability. In addition, the law

shareholders, or members that are individual

return (Form 502 or 505).

makes provision for securing information from

residents of Maryland, the number that are indi-

taxpayers that fail to supply required information,

vidual nonresidents of Maryland, the number of

Taxpayer Identification Required for Returns

and a penalty may apply.

other entities, and the total number of all part-

and Other Documents All returns, correspon-

Taxpayers have a right to access their tax

ners, shareholders or members.

dence, payments or other documents must indicate

records maintained by the Revenue Adminis-

A single member LLC electing to be a disre-

the pass-through entity name, Federal Employer

tration Division, and may inspect, amend or other-

ldentiication Number (FEIN), type of tax and tax

wise correct them. To obtain a copy of such tax

garded entity for federal purposes is treated es

an individual for purposes of computing the non-

records, submit a written request containing the

pass-through entity name, address and identii-

resident tax.

secure a FEIN

from the IRS. The FEIN

is the onlv

cation numbers and specifying the information

Line 2 - Total distributive or pro rata income

number used by the IRS for processing purposes

needed. The request must be signed by an

per federal return

Enter the distributive or pro

and is also the primary number used by the Mary-

authorized partner or shareholder.

rata income

from the federal pass-through entity

land Revenue Administration Division. For returns

As authorized by law, information furnished to

return. Distributive or pro rata share is defined

filed without the federal number a temporary num-

the Revenue Administration Division may be given

for this purpose as the net amount of income/

to the Internal Revenue Service, a proper official

ber will be assigned for processing purposes

loss for the partnership or S corporation, less

until the actual number is provided.

of any state that exchanges tex information with

interest from federal obligations.

The type of tax and tax year(s) are necessary

Maryland, and to an officer of this State having a

The distributive share for partnerships is the

to identify the subject of the document and the

right to the information in that officer’s

capacity.

net amount of lines 1 through 7 of federal Form

Also, the information may be obtained in accor-

intention of payments. This information ensures

1065 - Schedule K. The pro rata share for S cor-

dance with a proper judicial or legislative order.

that payments

are applied to the correct account.

federal Form 1120s

SPECIFIC INSTRUCTIONS

Use of Paid Preparers The pass-through

SPECIAL NOTE:

Complete the federal income

entity is responsible for the timely filing of returns,

tax return first and use it in preparation of the

For unistate pass-through entities, all

payment of tax, responding to requests and all

Maryland return. Use a minus sign (-) in front of

income is allocaMe

to Maryland. If the entity is

other requirements, even though a paid preparer

the number to indicate a negetive

amount.

unistate, meaning that b u s i n e s s i s c o n d u c t e d

i s u s e d .

only in Maryland, do not complete this area.

Name, Address and Other Information

I M -

Multistate pass-through entities, those con-

Substitute Forms Maryland income tax returns

PORTANT - IF A LABEL

HAS BEEN PROVIDED,

ducting business in more than one state, must

may be reproduced and filed on computer-

PLEASE ATTACH lT TO THE DESIGNATED AREA

allocate income if there are one or more non-

prepared or computer-generated substitute forms

ON THE FORM 510. IF SOMEONE ELSE IS PRE-

resident partners or shareholders. If there are

provided that they are approved in advance by

PARING THE RETURN. GIVE THE PREPARER

no nonresident partners or shareholders do

the Maryland Revenue Administration Division.

THE LABEL SO THAT iT MAY BE USED. If any

not complete this area.

Reproductions or substitutes of forms in which

of the information on the label is incorrect, DO

taxpayer information has been

NOT USE THE LABEL.

Line 3a - Non-Maryland income Multistate

preprinted by the Revenue Administration Division

If you do not have a label, type or print the

partnerships with one or more nonresident part-

may not be used.

required information in the desionated

ners may use separate accounting to allocate in-

For additional information, see Administrative

the exact pass-through entity

Release No. 26, Procedures for Computer-Printed

with any Trading

As” (T/A) name if applicable.

nonresident shareholders may use separate

Substitute Forms, which can be obtained horn any

Enter the Federal Employer Identification

accounting if the activky

of the corporation within

office of the Maryland Revenue Administration

Number (FEIN). If a FEIN

has not been secured,

Maryland is nonunitary.

Division. (See back cover of packet for address and

enter “APPLIED FOR” followed by the date of

ing, enter the amount of income or loss allocable

phone number for substitute forms information.)

application. If a FEIN

has not been applied for,

to other states and attach a worksheet detailing

the allocation between or among the states.

Enter the date of organization or incorporation

Employers that make payments to individuals of

and the Federal Business Activity Code. This

Line 3b - Maryland apportionment factor

salaries, wages or compensatioh

personal ser-

date must be expressed numerically. using two

Multistate partnerships with one or more nonres-

vices must withhdd

an income tax as prescribed

digits each for the month, the day and the-year.

ident partners may elect the apportionment

in publiied tables and remit the withholdings to

The Federal Business Activitv

Code fs a six-digit

method of allocation. Multistate S corporations

the Maryland Revenue Administration Division.

number available from the federal return which

with one or more nonresident shareholders must

The tax withheld must be remitted with Form

identifies the principal business activity.

use the apportionment method unless the activ-

MW506 - Employer’s Return of Income Tax

Be sure to check the applicable box to indi-

ity of the wrporation within Maryland is nonuni-

on a monthly basis if the qwrterly with-

cate the type of pass-through entity: partner-

see the

holding is $700 or more. If the quarterly with-

ship, S corporation, limited liability company or

instructions for computation of apportionment

holding is less than $700, the tax withheld is to

business trust.

factor on page 3 and enter the apportionment

be remitted quarterly. Employers may not change

Check the applicable box if: (1) the name or

factor as calculated on Page 2 of Form 510.

from monthly to quarterly without approval of the

address has changed: (2) this is the first filing of

Revenue Administration Division.

Line 4 - Distributive or pro rata share allocable

the pass-through entity: (3) this is an inactive

An annual reconciliation is required to be filed

to Maryland

For

unistate pass-through entities

pass-through entity (in Maryland and elsewhere);

on Form MW508 - Annual Employer Withholding

or multistate pass-through entities without non-

(4) this is the final return of a pass-through entity

Report and submitted with the state

resident partners or shareholders, enter the

that has dissolved, liquidated or withdrawn from

copy of the wage and tax statements issued to

amount shown on line 2.

Maryland: or (5) this is a manufacturing entity Do

employees. If the employer is required to submit

For multistate pass-through entities

using

not check the box for inactive or final if the pass-

wage and tax statement information on magnetic

separate accounting, subtract line 3a from line 2

through entity is inactive in Maryland but active

media for federal reporting purposes, it is required

and enter the difference. For multistate pass-

elsewhere. l f Form 510 is being amended, check

to submit magnetic media for state reporting

through

entiies

using

the apportionment method

Me “AMENDED RETURN” box.

purposes.

separate Form MW508 is not

of allocation, multiply line 2 by the factor on line

required tor magnetic media filers.

3b and enter the result.

Instructions For Maryland Form 510 - Pass-Through Entity Income Tax Return - 2002 Page 2

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