Instructions For Maryland Nonresident Income Tax Return Form 505

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pry personnel who are legal residents of Mawland 1

Must file a resident return (Form 502 or 503) and report all income from all sources, wherever earned.

YOIJ must calculate the local portion of the tax regardless of whether you were stationed in Maryland or

2-with overseas pay

posses-

2-with

3-with

Aith

5-with military income, and civilian

6-with

7-both spouses in the military and not

6 personnel who are legal residents of another state ]

Nol required to file a Maryland return.

tions

per, unearned and non-Maryland income, computing the tax on Maryland income only. Deductions and

tig-

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

Thle civilian taxpayer becomes a statutory resident because of residency for more than six months of the

502CR

for a n y p o s s i b l e c r e d i t s a l l o w e d b y t h a t s t a t e .

Fiscal year. You must file your Maryland return using the same tax year and the same basis (cash or accrual) as you used on your

federal return.

To tile a fiscal year return, complete the fiscal

these instructions, fiscal year taxpayers should

Fiscal year returns are due on the 15th day

year information at the top of Form 505, and print

understand the term to mean “fiscal year,” Use the

of the 4th month following the close of the

“FY in bold letters in the upper left hand corner of

2002 forms in this package for fiscal years which

fiscal year.

the form. Whenever the term “tax year” appears in

begin during calendar year 2002.

Special instructions for militiary

taxpayers.

not. The location of your legal residence determines which county should be entered on your return. See

Instructions 6 and 19. If vou file a ioint federal return see Instruction 7.

Same as above, may subtract up to $15,000 in military pay earned outside U.S. boundaries or

sions, depending upon total military income. If you file a joint federal return see Instruction 7.

l-with military income only

Not required to file a Maryland return.

military income and other

income outside Maryland

military and other income

M u s t f i l e a nonresident return (Form 505) reporting total income, subtracting military pay, unearned and

earned in Maryland, single or with

nom-Maryland income, then computing the tax on Maryland earned income only. Deductions and exemp

an unemployed civilian spouse

must be apportioned using the ratio of Maryland income to federal adjusted gross income.

military income with or without

Military person and civilian spouse must file a joint nonresident return (Form 505).

subtracting military

other income earned in Maryland,

and civilian spouse employed in

exemptions must be apportioned using the ratio of Maryland income to federal adjusted gross income.

Maryland, residing in Maryland less

than six months

The civilian taxpayer becomes a statutory resident because of residency in Maryland for more than six

spouse with any income residing in

months of the taxable year and the couple may file a joint resident return (Form 502) or the civilian

Maryland more than six months

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

itary spouse is not required to file a Maryland return. If you are not certain which tiling status to use,

If the civilian spouse files a separate resident return, see Instruction 8. l f the couple files a joint

return, report your federal adjusted gross income on your Maryland return. Subtract military pay and the

military taxpayer’s portion of any investment income (interest, dividends, etc.) from the joint federal adjust-

ed gross income. See Instruction 26 (c) through (j) in the resident booklet.

The Maryland tax is then computed based on the balance of the total income. The standard deduc-

tion 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 allowable deductions and exemptions.

military income and other

income in Maryland and civilian

taxable year. The military

spouse remains a nonresident for purposes of Maryland

taxation. The military

spouse with any income residing in

taxpayer may file a separate nonresident return (Form 505) and the civilian spouse may file a separate

Maryland for more than six months

resident return (Form 502). (See Instruction 8.) However, if the couple chooses to file a joint resident

return (Form 502):

The military taxpayer’s Maryland income

is not subject to the local tax. (Enter the word ‘MILI-

TARY 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 compute the adjustment to the standard deduction or itemized deductions and exemp

tions and to compute the local tax for the civilian taxpayer.

Must tile a joint nonresident return. Exemptions and the standard deduction or itemized deductions must

domiciled in Maryland and one or

be adjusted.

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

Instructions For Maryland Nonresident Income Tax Return Form 505 - 2002 Page 8

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