Instructions For Maryland Resident Income Tax Returns Forms 502 And 503

1291

2-with overseas pay

income

2-wkh military income

3414th

with

income

4-with military income with or without other income

5-with military income, and civilian spouse vvith any income

Cith military inwme and other income

7-bath spouses in the military and not domiciled in Maryland and

year and

l f the civilian spouse files a separate resident return, see Instruc-

tion 26 (c) through (j) in the resident booklet.

5UZCR

Special instructions for military taxpayers.

Military personnel who are legal residents of Maryland

file

resident

Must

return (Form 502 or Form 503) and report all

t-without overseas pay

from all sources, wherever earned. You must calculate the

local portion of the tax regardless of whether you were stationed in

Maryland or not. The location of your legal residence determines

which county

should be entered on your return. See Instructions 6

and 19. If you filed a joint federal return, see instruction 7.

Same as above, may subtract up to $15,000 in military pay earned

outside U.S. boundaries or possessions, depending upon total mili-

tary income. If you filed a joint federal return. see Instruction 7.

Military personnel who are legal residents of another state

l-with miliiry income

only

Not required to file a Maryland return.

and other inwrne outside Maryland

Not required to file a Maryland return.

military and other income earned in Maryland, single or

nonresident

Must file a

return (Form 505). reporting total income,

an unemployed civilian

spouse

subtracting military pay, unearned and non-Maryland income,

then

computing the tax on Maryland earned

only. Deductions and

exemptions must be apportioned using the ratio of Maryland inwme

to federal adjusted gross income.

nonresident

earned in Mary-

Military person and civilian spouse must file a joint

land, and civilian spouse employed in Malryland,

residing in Mary-

return (Form 505) subtracting military pay, unearned and non-

less than six months

land

Maryland income, computing the tax on Maryland income only.

Deductions and exemptions must be apportioned using the ratio of

Maryland income to federal adjusted gross income.

residing

The civilian taxpayer becomes a statutory resident because of resi-

more than six months

in Maryland

dency in Maryland for more than six months of the taxable

the couple may file a joint resident return (Form 502) or the civilian

spouse may file a separate resident return. If the civilian spouse files

a separate resident return, the military spouse is not required to file

a Maryland return. If you are not certain which filing status to use,

figure your tax both ways to determine which status is best for you.

your

tion 8. If the couple files a joint return, report

federal adjusted

gross inwme on your Maryland return. Subtract military

pay and the

military taxpayers portion of any investment inwme (interest, divi-

dends, etc.) from the joint federal adjusted gross income. See lnstrua

The Maryland tax is then computed based on the balance of the

total income. The standard deduction or itemized deductions and

exemptions must be adjusted using the ratio of Maryland adjusted

gross income to federal adjusted gross income. In this situation,

Worksheet A on the next page should be used to compute the

amount of allowabie

deductions and exemptions.

in Maryland.and

civilian

The civilian taxpayer becomes a statutory resident because of resi-

more than six

spouse with any income residing in Maryland for

dency for more than six months of the taxable year. The military

months

spouse remains a nonresident for purposes of Maryland taxation. The

military taxpayer may file a separate nonresident return (Form 505)

and the civilian spouse may file a separate resident return (Form

502). (See Instruction 8.) However, tf the couple c h o o s e s t o f i l e a j o i n t

resident return (Form 502):

T h e military

taxpayer’s Maryland inwme is not subject to the

local

tax. (Enter the word “MILITARY” on line 35.)

Standard or itemized deductions and exemptions must be

adjusted, using a ratio of Maryland adjusted gross income to

federal adjusted gross income.

The local tax must be adjusted using Worksheet B. In this

situation, Worksheets A and B should be used to wmpute

the adjustment to the standard deduction or itemized deduc-

tions and exemptions and to compute the local tax for the

civilian taxpayer.

Must file a joint nonresident return. Exemptions and the standard

deduction or itemized deductions must be adjusted.

one or both have Maryland income

Military personnel should be aware that there may be provisions for tax credits granted either by

Maryland or another state. See Maryland Form

and instructions. Read carefully the instructions provided by the state of legal residence for any possible credits allowed by that state.

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Instructions For Maryland Resident Income Tax Returns Forms 502 And 503 - 2002 Page 16

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