Instructions For Maryland Resident Income Tax Returns Forms 502 And 503

ation securities. See Administrative Releases

pen&on plan does not quality.]

mitted a physician’s certiication,

PENSiON

Subtractions from income. Determine which subtractions from

income

apply to you. You may not include the

same income in more than one subtraction item. Write the correct amounts on lines 8-18 of Form 502. Instructions for

each line:

To be considered totally disabled you

Line 8. STATE TAX REFUNDS. Copy

onto line 8 the amount of state or local income

10 8 13.

must have a mental or physical impairment

tax refunds included in line 1 of Form 502.

Line 11. PENSION EXCLUSION. You

which prevents you from engaging in sub

Line 9. CHILD CARE EXPENSES.

may be able to subtract some of your tax-

stantial gainful activity. You must expect the

You may subtract the cost of caring for your

able pension and retirement annuity income.

impairment to be of long, continued or

dependents while you work. There is a lim-

indefinite duration or to result in your death.

This subtraction applies only if:

itation of $2,400 ($4,800 if two or more

You must attach to your return a certifica-

a. you were 65 or over or totally disabled,

dependents receive care). Copy onto line 9

or your spouse was totally disabled, on

tion from a qualified physician stating the

the amount from line 3 of either federal

the last day of the tax year, AND

nature of your impairment and that you are

Form 2441 or Form 1640A Schedule 2. You

b. you included on your federal return

totally disabled. If you have previously sub

may also be entitled to a credit for these

income received as a pension, annuity

just attach

expenses. See instructions for Part B of

or endowment from an “employee retire-

your own statement that you are still totally

Form 502CR.

ment system: [A traditional IRA, a Roth

disabled and that a physician’s certification

Line IO. INCOME FROM U.S. GOV-

was submitted

before.

IRA, a simplii

employee plan (SEP), a

ERNMENT OBLIGATIONS. Enter interest

If you are a part-year resident, com-

Keogh Plan or an ineligiMe deferred corn

on U.S. savings bonds and other U.S. obli-

plete the pension exdusion

worksheet using

total taxable pension and total social secu-

gations. Capital gains from the sale or

Each spouse that receives taxable

exchange of U.S. obligations should be

pension or annuity income and is 65 or

rity and railroad retirement benefits as if

included on this line. Dividends from mutu-

over or totally disabled may be entitled to

you were a full-year resident. Prorate the

al funds which invest in U.S. government

this exclusion. In addition, if you receive

amount on line 5 by the number of months

obligations are also exempt from state tax-

taxable pension or annuity income but you

of Maryland residence divided by 12.

ation. However, only that portion of the

are not 65 or totally disabled, you may be

However, if you began to receive your

dividends attributable to interest or capital

pension during the tax year you became a

entitled to this exclusion if your spouse is

gain from U.S. government obligations can

Maryland resident, use a proration factor of

totally disabled. Complete a separate col-

subtracted.

the number of months you were a resident

umn in the worksheet below for each spouse.

You cannot subtract income from

divided by the number of months the pen-

Combine your allowable exclusion and enter

G overnment National Mortgage Associ-

sion was received.

the total amount on line II, Form 502.

EXCLUSION

COMPUTATION

WORKSHEET

Review carefully the age and disability requirements in the

TAXPAYER A

TAXPAYER B

instructions

above

before

completing

this

worksheet.

and retirement annuity included in your federal

Net taxable pension

adjusted gross income. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

18,500 00

2. Maximum allowable exclusion . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

3. Total benefits you received from social security and/or railroad

retirement (Tier I and Tier II)

. . . . . . . . . . . . . . . . . . . . . . . . . . . . .

4. Tentative exclusion (Subtract line 3 from line 2.) (If less than 0, enter 0.)

5. Pension Exclusion (Write the smaller of line 1 or 4 here and on

line 11, Form 502.) If you and your spouse both qualify for the pension

exclusion,

combine your allowable exclusions and enter the total

amount on line 11, Form 502. . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

SPECIFIC

INSTRUCTIONS

Line 1. Enter your net taxable pension and retirement annuity included in your federal adjusted gross income.

Line 2. The maximum allowable exclusion is $18,500.

your total social security and/or railroad retirement

Line 3. Enter

benefits. Include all social security and/or railroad retire-

ment benefits whether or not you included any portion of these amounts in your federal adjusted gross income.

Include both Tier I and Tier II railroad retirement benefits. If you are filing a joint return and both spouses received

social security and/or railroad retirement benefits but only one spouse received a pension, enter only the social

security and/or railroad retirement benefits of the spouse receiving the pension on the worksheet.

Line 4. Subtract line 3 from line 2 to determine your tentative exclusion.

Line 5. Your pension exclusion is the smaller of your net taxable pension (line 1) or the tentative exclusion (line 4).

Enter the smaller amount on this line.

NOTE: When both you and your

qualify for the pension exclusion, a separate column must be completed for each

spouse

spouse.

Instructions For Maryland Resident Income Tax Returns Forms 502 And 503 - 2002 Page 5

Related Articles

Related forms

Related Categories