Instructions For Resident Income Tax Return (Maryland Form 502) (Page 7 of 28) in pdf

457(b) of the Internal Revenue Code. [A traditional IRA, a

four highest dollar amounts in the code letter lines. If multiple

Roth IRA, a simplified employee plan (SEP), a Keogh plan, an

subtractions apply, be sure to identify all of them on Form 502SU

ineligible deferred compensation plan or foreign retirement

and attach it to your Form 502.

income does not qualify.]

Note: If only one of these subtractions applies to you, enter the

Each spouse who receives taxable pension or annuity income

amount and the code letter on line 13 of Form 502; then the use

and is 65 or over or totally disabled may be entitled to this

of Form 502SU may be optional.

exclusion. In addition, if you receive taxable pension or annuity

CODE LETTER

income but you are not 65 or totally disabled, you may be entitled

to this exclusion if your spouse is totally disabled. Complete a

Payments from a pension system to firemen and policemen

separate column in the PENSION EXCLUSION COMPUTATION

for job related injuries or disabilities (but not more than the

WORKSHEET (13A) for each spouse. Combine your allowable

amount of such payments included in your total income).

exclusion and enter the total amount on line 10, Form 502.

Net allowable subtractions from income from pass-through

To be considered totally disabled, you must have a mental

entities, not attributable to decoupling.

or physical impairment which prevents you from engaging in

Net subtractions from income reported by a fiduciary.

substantial gainful activity. You must expect the impairment to

Distributions of accumulated income by a fiduciary, if

be of long, continued or indefinite duration or to result in your

income tax has been paid by the fiduciary to the State (but

death. You must attach to your return a certification from a

not more than the amount of such income included in your

qualified physician stating the nature of your impairment and

total income).

that you are totally disabled. If you have previously submitted

a physician’s certification, attach your own statement that you

Profit (without regard to losses) from the sale or exchange

are still totally disabled and that a physician’s certification was

of bonds issued by the State or local governments of

submitted before.

Maryland.

If you are a part-year resident, complete PENSION EXCLUSION

Benefits received from a Keogh plan on which State income

COMPUTATION WORKSHEET (13A) using total taxable pension

tax was paid prior to 1967. Attach statement.

and total Social Security and railroad retirement benefits as if

Amount of wages and salaries disallowed as a deduction due

you were a full-year resident. Prorate the amount on line 5 by

to the work opportunity credit allowed under the Internal

the number of months of Maryland residence divided by 12.

Revenue Code Section 51.

However, if you began to receive your pension during the tax

Expenses up to $5,000 incurred by a blind person for a

year you became a Maryland resident, use a proration factor

reader, or up to $1,000 incurred by an employer for a reader

of the number of months you were a resident divided by the

for a blind employee.

number of months the pension was received.

Expenses incurred for reforestation or timber stand

For example, Pat Taxpayer moved to Maryland on March 1. If

improvement of commercial forest land. Qualifications

he started to receive his pension on March 1, he would prorate

and instructions are on Form DNR393, available from the

the pension exclusion by 10/10, which would mean he would be

Department of Natural Resources, telephone 410-260-8531.

entitled to the full pension exclusion. However, if he began to

Amount added to taxable income for the use of an official

receive his pension on February 1, Pat would prorate his pension

vehicle by a member of a state, county or local police or fire

by 10/11. Please note that, in either case, the proration factor

department. The amount is stated separately on your W-2

may not exceed 1.

form.

Complete the PENSION EXCLUSION COMPUTATION WORKSHEET

Up to $6,000 in expenses incurred by parents to adopt

(13A). Copy the amount from line 5 of the worksheet onto line

a child with special needs through a public or nonprofit

10 of Form 502.

adoption agency and up to $5,000 in expenses incurred by

Note: You must complete and attach Form 502R to the Form

parents to adopt a child without special needs.

502 if you or your spouse are claiming a pension exclusion

Purchase and installation costs of certain enhanced

on line 10 of the Maryland Form 502. See the Form 502R for

agricultural management equipment as certified by the

additional information.

Maryland Department of Agriculture. Attach a copy of the

Line 11. FEDERALLY TAXED SOCIAL SECURITY AND

certification.

RAILROAD RETIREMENT BENEFITS. If you included in your

m. Deductible artist’s contribution. Attach Maryland Form

federal adjusted gross income Social Security, Tier I, Tier II

502AC.

and/or supplemental railroad retirement benefits, then you

must include the total amount of such benefits on line 11. Social

Payment received under a fire, rescue, or ambulance

personnel length of service award program that is funded

Security and railroad retirement benefits are exempt from state

tax.

by any county or municipal corporation of the State.

Value of farm products you donated to a gleaning cooperative

Note: You must complete and attach Form 502R to the Form

502 if you or your spouse received any income during the tax

as certified by the Maryland Department of Agriculture.

year (taxable or nontaxable) from Social Security or Railroad

Attach a copy of the certification.

Retirement (Tier I or Tier II). See the Form 502R for additional

Up to $15,000 of military pay included in your federal

information.

adjusted gross income that you received while in the

Line 12. NONRESIDENT INCOME. If you began or ended your

active service of any branch of the armed forces and

residence in Maryland during the year, you may subtract the

which is attributable to service outside the boundaries of

the U.S. or its possessions. To compute the subtraction,

portion of your income received when you were not a resident

of Maryland. See Instruction 26 for part-year residents and

follow the directions on the MILITARY OVERSEAS INCOME

WORKSHEET (13B). If your total military pay exceeds

Administrative Release 1 for military personnel.

$30,000, you do not qualify for the subtraction.

If your state of residence or your period of Maryland residence

was not the same as that of your spouse and you filed a joint

p. MILITARY OVERSEAS INCOME WORKSHEET (13B)

return, follow Instruction 26 (c) through (p).

When both you and your spouse qualify for this military

Line 13. SUBTRACTIONS FROM INCOME ON FORM 502SU.

subtraction, complete separate computations for each

Other certain subtractions for which you may qualify will be

spouse.

reported on Form 502SU. Determine which subtractions apply

1. ENTER the amount of military pay included in

to you and enter the amount for each on Form 502SU. Enter

your federal adjusted gross income

the sum of all applicable subtractions from Form 502SU on line

attributable to service outside the U.S.

13 of Form 502, and enter the code letters that represent the

Instructions For Resident Income Tax Return (Maryland Form 502) Page 7

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