Instructions For Maryland Form 502cr - Income Tax Credits For Individuals

INCOME TAX CREDITS

MARYLAND

Page 2

FORM

FOR INDIVIDUALS

502CR

INSTRUCTIONS

2013

PART A – SPECIAL INSTRUCTIONS

through 22 on Form 502 to determine the amounts to be used

for the 502CR computation.

Members of Pass-through Entities - When a partnership, S

corporation, limited liability company (LLC) or business trust

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

files a composite return on behalf of its partners, shareholders

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

or members with states in Groups I and II, Maryland resident

502 you will file.

partners, shareholders or members may claim a credit for their

D.C. Unincorporated Business Franchise Tax - Self-

share of the tax paid. Attach a copy of the composite return filed

employed individuals and partners in a partnership who are

with each of the other states. In lieu of the composite return,

subject to D.C. unincorporated business franchise tax may claim

attach a statement(s) from the pass-through entity showing

a credit on Form 502CR. A copy of the D.C. return is required

your share of the total income, your share of the taxable net

for self-employed individuals and for partners, a K-1 or other

income and your share of the tax liability in each of the other

statement from the partnership showing the partner’s share of

states. Complete a separate Form 502CR Part A for each state,

income and the partner’s share of the D.C. tax.

entering your share of the taxable net income on line 2 and your

Installment Sales in Another State - You may be eligible

share of the tax liability on line 7. Do not enter the amount of

for credit for taxes paid to another state for gain recognized

tax withheld on your behalf as shown on the Maryland Schedule

on installment, sales proceeds, even if the other state required

K-1 or other statement issued to you by the pass-through entity.

the total be recognized in an earlier tax year. Credit is allowed

Total the amount from each Form 502CR, Part A, line 8. Using

against the state income tax only. The gain must have been

only one summary section, record the total on Part H, line 1. No

deferred for federal tax purposes, but fully taxed in the year of

credit is allowed for local taxes paid.

the sale by another state that does not recognize the deferral.

If the Maryland resident must file an individual nonresident

The credit allowed is the amount of the gain taxed in Maryland

return reporting the partnership, S corporation, LLC or business

in the current year multiplied by the lesser of:

trust income, a separate Form 502CR must be completed for

• the highest state tax rate used on your Maryland tax return,

each state and submitted with a copy of the return filed with

or,

the other state.

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

For both composite returns and individual returns, no credit is

available for taxes paid to states in Group III, or for taxes paid

PART B - CREDIT FOR CHILD AND DEPENDENT CARE

to cities or local jurisdictions.

EXPENSES

Shareholders

Corporations

Maryland

resident

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

shareholders can claim a credit for taxes paid by an S

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

corporation to a state which does not recognize federal S

2013, you may be entitled to a credit on your Maryland state

corporation treatment. A copy of the corporation return filed

income tax return. The credit starts at 32.5% of the federal

in the other state is required to be attached to the Maryland

credit allowed, but is phased out for taxpayers with federal

return. A separate Form 502CR should be completed for each

adjusted gross incomes above $41,000 ($20,500 for individuals

state showing the following information:

who are married, but file separate income tax returns). No credit

is allowed for an individual whose federal adjusted gross income

__________% x ________________

= _______________

exceeds $50,000 ($25,000 for married filing separately). Use

the chart below to determine the decimal amount to be entered

Stock ownership

Corporation taxable income

Line 2, Part A, Form 502CR

percentage

on line 3 of Part B.

__________% x ________________ = _______________

PART C - QUALITY TEACHER INCENTIVE CREDIT

Stock ownership

Corporation tax

Line 7, Part A, Form 502CR

percentage

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

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

NOTE: A preliminary calculation using Form 502 must be made

level courses required to maintain certification. This credit

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

CREDIT FOR CHILD AND DEPENDENT CARE EXPENSES CHART

If your filing status is Married Filing Separately and

For all other filing statuses, if your federal

Decimal Amount

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

COM/RAD-012

13-49

Instructions For Maryland Form 502cr - Income Tax Credits For Individuals - 2013 Page 2

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