Instructions For Maryland Resident Income Tax Returns Forms 502 And 503

h.TELECOMMUNlCATlONS PROPERTY

TAX CREDIT.

pany for 60% of the total state, county and

I . ELECTRIC AND GAS UTILITY CREDITS.

rn.ONE MARYLAND ECONOMIC DEVEL-

Eny in a distressed county in Mary-

n. COMMUTER TAX CREDIT. Businesses

qualified

local jurisdictions in the county, city, town or

Form 502 or line 9 of Form 503 and tie the

.0305

.0290

.0293

.0256

.0310

.0283

.0265

.0260

Harford County . . . . . . . . .

.0306

.0179

.0263

Ho\nlilrd County . . . . . . . . .

.0245

.0285

.0258

.0310

.0280

.0125

tha

- -

d.RESEARCH AND DEVELOPMENT TAX

ness entities’ employees.

tional commercial fertilizer costs necessary

CREDIT. Businesses may claim a credit

to convert agricultural production to a nutri-

o. CREDIT FOR MARYLAND-MINED COAL.

against the state income tax for certain qual-

ent management plan.

A qualifying cogenerator, small power pro-

ified research and development expenses.

ducer or electricity supplier may claim a

j. EMPLOYER PROVIDED LONG-TERM

e. JOB CREATION TAX CREDIT.

Certain

credit for the purchase of Maryland-mined

CARE INSURANCE CREDIT. A credit

businesses that create new qualified posi-

coal.

may be claimed for costs incurred by an

tions in Maryland may be eligible for a tax

employer who is providing long-term care

p. MARYLAND CLEAN ENERGY INCEN-

credit based on the number of qualified

insurance as part of an employee benefit

TIVE ACT. A credit may be claimed for the

positions created or wages paid for these

package.

cost incurred to install solar energy proper-

positions.

ty or photovoltaic property. A credit is also

k. WORK-BASED LEARNING PROGRAM

f. NEIGHBORHOOD AND COMMUNITY

allowed for electricity produced using cer-

CREDIT. A credit may be claimed for a

tain alternative energy resources.

ASSISTANCE PROGRAM TAX CREDIT.

percentage of wages paid to students

Businesses that contribute to approved

employed as part of a work-based learning

q. LONG-TERM EMPLOYMENT OF QUALI-

Neighborhood

and

Community

Assistance

program.

FIED EX-FELONS. Businesses that

Programs may be eligible for a tax credit

employ qualified ex-felons under a pro-

equal to 50% of approved contributions

gram approved by the Department of

A public utility may claim a credii against the

with a maximum credit of $125,000.

Labor, Licensing and Regulation may be

state income tax for 60% of the total state,

eligible for a credit based upon wages paid

g. BUSINESSES THAT CREATE NEW JOBS

county and municipal corporation property

TAX

CREDIT.

Certain

businesses

located

taxes paid on certain Maryland property

to the qualified employee.

in Maryland that create new positions or

used to generate electricity or steam for

For additional information regarding any

establish or expand business facilities in

sale. A credit is also available for wages paid

of the above income tax credits, see the

the state may be entitled to an income tax

to qualified employees at a muiti-jurisdiction-

instructions provided on Form 500CR,

credit if a prOpetty tax

is granted by

electric

company’s

qualified

corporate

credit

Business Tax Credits. To obtain this form,

Baltimore Citv or anv countv or municioal

headquarters.

see page ii, “HowTo Get Help”.

corporation

Maryland.

NOTE: If you claim a business tax credit for

OPMENT TAX CREDIT. Businesses may

and

items a, b,

d, h, I

q, an addition to

credit is allowed for a pub-

claim a credit against the project cost and

income must be included on line 5. See

lic utility that is a telecommunications corn-

startup cost of relocating or expanding a

Instruction 12.

If you had a rehabilitation that you believe

municipal

corporation

property

taxes

paid

for the Heritage Structure Rehabiiii

on certain Maryland property.

tion Tax Credii, see Form 502H for qualiica-

i. WATER

QUALITY

IMPROVEMENT

may claim a credit for the cost of providing

tions and instructions.

CREDIT. A credit may be claimed for addi-

qualifying commuter benefits to the busi-

Local income tax and local credits. Maryland counties and Baltimore City may levy an income tax which is a per-

centage of Maryland taxable income. Use the LOCAL TAX RATE CHART and the LOCAL TAX WORKSHEET to figure your

local income tax. Use the county (or Baltimore City) you resided in on the last day of the tax year and which you showed

in the box at the top of Form 502 or 693. Military taxpayers should refer to Instruction 29.

Local earned income credit If you calculat-

note the words “separate jurisdictions” on line

SPECIAL NOTE: If you and your spouse

were domiciled in diirent taxing jurisdictions,

31 of Form 502 or line 9 of Form 503. If the

ed an earned income credit on line 25 of

local tax rates are different, calculate a ratio of

Form 502 or line 7a of Form 503, complete

you

should

file

separate

Maryland

returns

each spouse’s income to total income. Then

the LOCAL EARNED INCOME CREDIT

even though you filed a joint federal return.

WORKSHEET on the next page.

apply this ratio to the taxable net income and

(See Instruction 7.) However, if you choose to

calculate the local tax for each spouse sepa-

file a joint Maryland return, please use the fol-

Local poverty level credit. If you calculated

lowing instructions. Enter both counties and/or

rately using the appropriate local tax rates.

a poverty level credit on line 26 of Form 502

Enter the combined local tax on line 31 of

or line 7b of Form 503, complete the LOCAL

special taxing area Mod< on the front of your

POVERTY LEVEL CREDIT WORKSHEET on

return. If the local tax rates are the same,

words

“separate

jurisdictions”

that

line.

the next page.

Attach a statement showing your calculations.

complete the worksheets as instructed and

If you file Form 503, add the boxes for local

attach a schedule showing the local tax for

ratio of

earned income credit (lOa) and local poverty

each jurisdiction based on the

each

level credit (lob) and enter on line 10.

spouse’s income to the total income. Also

2002 LOCAL TAX RATE CHART

Subdivision

Rate

Subdivision

Rate

Subdivision

Rate

Baltimore City . . . . . ~ . . . .

Charles County . . . . . . . . .

Prince George’s County. . . -0310

Queen Anne’s County . . . . .0285

Allegany County. . . . . . . . .

Dorchester County. . . . . . . .0262

St. Mary’s County. . . _ . . . .

Anne Arundel County. . . . .

Frederick County . . . . . . . . .0296

Somerset County. . . . . . . . .0315

Baltimore County. . . . . _ . .

Garrett County. . . . . . . . . .

Talbot County . . . . . . . . . .

Calvert County. . . . . . . . . .

Caroline County. . . . . . . . .

Washington County . . . . . . .0280

Wicomico County. . . . . . . .

Carroll County. . . . . . . . . .

Kent County . . . . . . . . . . .

Worcester County . . . . . . .

Cecil County . . . . . . . . . . .

Montgomery County. . . . . . .0295

LOCAL TAX WORKSHEET

Multiply the taxable net income by your local tax rate from the Local Tax Rate Chart for the county in which you were a resident on the last day of

taxable period. Enter the result on line 31 of Form 502 or line 9 of Form 503. This is your local income tax.

1 . Taxablenetincomefromline23ofForrn502orline5ofFonn503.

. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . $

Localtaxratefromchartabove. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

Local income tax (Multiply line 1 by line 2.) Enter this amount on line 31 of Form 502 or line 9 of Form 503 rounded to

the nearest cent or whole dollar. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . I . . . . . . . . . . . . . . . . . . . . .$

1 0

Instructions For Maryland Resident Income Tax Returns Forms 502 And 503 - 2002 Page 10

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