Instructions For Form 500 - Maryland Corporation Income Tax Return

signed by an authorized corporation officer.

DATES IN THE SPACE PROVIDED AT THE

line 2b and any related expenses. Also include

TOP OF FORM 500. The form used in filing

in the schedule any interest and dividends

As authorized by law, information furnished to

must reflect the preprinted tax year in which the

exempt by federal law or treaty from federal but

the Revenue Administration Division may be

corporation’s tax year begins.

not state income tax.

given to the IRS, a proper official of any state

that exchanges tax information with Maryland,

The same tax year or period used for the

LINE 2c - NET ADDITION MODIFICATION

and to an officer of this State having a right to

federal return must be used for Form 500.

RECAPTURE

the information in that officer’s official capacity.

Also, the information may be obtained in

LINE 1 - TAXABLE INCOME PER FEDERAL

If a net operating loss deduction is allowed for

accordance with a proper judicial or legislative

RETURN

this tax year, and if, in the tax year of the

order.

corresponding net operating loss, total addition

Enter the taxable income (based on the

modifications exceed total subtraction

SPECIFIC INSTRUCTIONS

federal return) as calculated on the taxable

modifications, enter the smaller of:

income worksheet.

SPECIAL NOTE: Complete the federal income

Net operating loss deduction attributable to the

Only in the instance of a current net operating

tax return first and use it in preparation of the

loss year (tax year in which the net operating

loss may line 1 be reported at less than zero.

Maryland return. After completing the Maryland

loss occurred)

Use a minus sign (-) in front of the number to

return, assemble your return in the following

indicate a loss. In the case of a net operating

order: Maryland Corporation Form 500, any

loss deduction, taxable income cannot be

required Maryland forms and their related

Cumulative net operating loss deductions

reported at less than zero.

attachments, any K-1 forms showing credits

attributable to the loss year that are allowed for

claimed on corporation return, and the federal

NOTE: If the corporation is required to

this tax year and all prior tax years

income tax return through Schedule M2.

complete Form 500A, do not include NOL

+ net addition modification (amount that addition

deduction in this figure (i.e. do not include

m o d i f i c a t i o n s

e x c e e d

s u b t r a c t i o n

BEFORE YOU BEGIN

NOL deduction on line 4 of the Taxable

modifications) for the loss year

Income Worksheet in the Instructions).

Certain corporations are required to complete

Applicable NOL deduction will be utilized on

– total net operating loss for the loss year.

Form 500A, Calculation of Corporation Modified

Form 500A; and carried back to Form 500 on

Income, before completing Form 500 in its

These items are each considered to be a

line 2g or 4e accordingly.

entirety.

positive amount for purposes of this calculation.

A corporation included in a consolidated filing

If the result of combining amounts is negative,

If a corporation filing federal Form 1120 or

for federal income tax purposes must enter its

use zero.

1120-C has any decoupling modifications,

separate federal taxable income, calculated

Section 10-306.1 related party transactions, or

If the total net operating loss deduction for

using federal law as if the corporation had filed

Foreign Source dividends, it is required to

this tax year consists of net operating losses

separately for federal purposes. Attach a copy

complete and attach Maryland Form 500A to

from more than one tax year, calculate the

of the actual consolidated federal income tax

Form 500. This form requires completion of

modification separately for each loss and enter

return through Schedule M2 and a schedule

Form 500 through line 5, Maryland Modified

the total.

reconciling the income and expenses of each

Income, as a preliminary calculation before

member of the consolidated filing.

Attach a schedule of the calculation if, in the

completing the return.

tax year of the net operating loss, total addition

A corporation included in a consolidated

modifications exceed total subtraction

federal filing and claiming net operating loss or

NAME, ADDRESS AND OTHER

modifications.

special deductions must attach a schedule

INFORMATION

detailing the deduction(s) on a separate return

NOTE: This entry is a modification and not the

Type or print the correct name and address in

basis.

net operating loss. The net operating loss is

the designated area. Enter the corporation

shown only on line 1. For more information see

name exactly as specified in the Articles of

ADDITION MODIFICATIONS

Administrative Release 18. If the corporation

Incorporation, or as amended, and continue

is required to complete Form 500A, enter

with any “Trading As” (T/A) name if applicable.

All entries must be positive amounts.

zero here on line 2c until Form 500A has

Enter the federal employer identification

been completed. The calculation for the

LINE 2a - STATE AND LOCAL INCOME TAX

number (FEIN). If a FEIN has not been secured,

NAM recapture is based on the amount of

enter “APPLIED FOR” followed by the date of

Enter the total of all net income taxes and all

NOL utilized on line 19 of Form 500A.

application. If a FEIN has not been applied for,

other taxes based on income that are imposed

LINE 2d - SECTION 10-306.1 RELATED

do so immediately.

by any state or by a political subdivision of any

PARTY TRANSACTIONS

state and deducted on the federal return.

Enter the date of incorporation and the federal

Enter the amount of any disallowed

business code number. The date of incorporation

Attach a schedule listing the type and amount

deductions for related party transactions in

must be expressed numerically, using two digits

of all taxes deducted on the federal return. The

accordance with Section 10-306.1 of the Tax-

each for the month, the day and the year. The

schedule of taxes must reconcile to the amount

General Article.

Business Code is a six-digit number available

of tax expense reported on the federal return.

from the federal return which identifies the

LINE 2e - DOMESTIC PRODUCTION

principal business activity.

ACTIVITIES DEDUCTION

LINE 2b - DIVIDENDS AND INTEREST FROM

ANOTHER STATE, LOCAL OR FEDERAL

Check the applicable box if: (1) the name or

Enter the amount of any deduction allowable

TAX-EXEMPT OBLIGATION

address has changed; (2) this is an inactive

under IRC Section 199 for income from domestic

corporation (in Maryland and elsewhere – Do

production activities claimed on the corporation’s

Enter dividends and interest (less related

not check the box for inactive if the corporation

federal income tax return.

expenses) attributable to any obligation or

is inactive in Maryland but active elsewhere.);

LINE 2f - CAPTIVE REIT

security of another state, a political subdivision

(3) this is the first filing of the corporation; (4)

or authority of another state. Also include

this is the final return of a corporation that has

The amount of the total deduction for

interest and dividends that are exempted by

dissolved, liquidated or withdrawn from

dividends paid that is claimed by a Captive

federal law or treaty from federal but not state

Maryland; or (5) this tax year’s beginning and

REIT on Federal Form 1120-REIT.

income tax, and attributable to the United States

ending dates are different from last year’s due

LINE 2g - OTHER ADDITIONS

or a foreign government or an authority,

to an acquisition or consolidation.

commission, instrumentality or territory.

If one or more of these apply, enter the total

amount on line 2g and identify each item using

TAX YEAR OR PERIOD

Attach a schedule listing the source and

the code letter.

amount of all dividends and interest reported on

ENTER THE BEGINNING AND ENDING

Instructions For Form 500 - Maryland Corporation Income Tax Return - 2011 Page 6

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