Form 500cr - Income Tax Credits - 2011 Page 16
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19for the eligible project costs in the initial tax year (the first tax year
withheld during this tax year from the wages of qualified employees
in which this credit was claimed), prior carryover tax years, and any
(line 5).
refundable tax year amounts.
Section B - Start-up Costs The refundable portion of the startup
The amount on line 15 is the amount of remaining excess eligible
credit is calculated after the nonrefundable portion of this credit is
project costs that are available to be claimed by the qualified business
claimed. The tentative refund is the amount of the remaining excess
entity as a project credit for this tax year. The project credit that may
start-up credit. The refundable portion of the start-up credit is limited
be claimed in Part P-II is limited up to the amount of your Maryland
to the amount of Maryland income tax withheld during this tax year
tax liability on the project taxable income.
from the wages of qualified employees (line 5).
PART P - IV SUMMARY
Enter on line 16 the amount of the Maryland liability attributable to
income from the project (line 7b). Line 17, the lesser of line 15 or line
Complete the summary of credit amounts claimed for the project
16, is the “Credit against tax on income from the project.”
credits and start-up credit for the One Maryland Economic
Section B - Start-up Costs Tax Credit
Development Tax Credit.
On line 18 enter the sum of the amount of the start-up credits allowed
Enter on line 35 the nonrefundable portions of the project and start-
in the initial tax year, prior carryover tax years, and any refunds (these
up costs credits from lines 33 and 34. This is the total nonrefundable
are the amounts claimed as refunds for the start-up credit during the
One Maryland Economic Development Tax Credit.
tax years when this credit becomes a refundable credit). The amount
This amount should also be entered on line 16 of Part W.
calculated on line 19 is the excess amount available to be claimed
by the qualified business entity as a start-up credit.
Add lines 36 and 37 and enter this amount on line 38. This is the
total refundable One Maryland Economic Development Tax Credit.
The start-up credit is equal to the lesser of the amount on line 19
or line 13 (qualified employees multiplied by $10,000). The start-
This amount should also be entered on line 1 of Part Y.
up credit that may be claimed in Part P-II is limited to the qualified
business entity’s Maryland tax liability. If a project credit was claimed
NOTE: A copy of the final credit certification from the Department of
in Part P-II, then the amount of the start-up credit on line 22 is
Business and Economic Development must be included with Form
limited to the remaining Maryland state tax liability after taking the
500CR.
nonrefundable project credit (line 21).
SPECIAL INSTRUCTIONS FOR QUALIFIED BUSINESS
PART P - III REFUNDABLE ONE MARYLAND ECONOMIC
ENTITIES THAT ARE PASS-THROUGH ENTITIES (PTEs)
DEVELOPMENT TAX CREDIT
A qualified business entity that is a PTE (partnership, LLC, S
Generally, at any time after the 4th tax year following the tax year
corporation, or business trust) must attach Form 500CR to the PTE
after the project was placed in service, the business may apply the
income tax return, Form 510.
excess to the entity’s total Maryland state income tax liability and
may request a refund of any excess credit.
PTEs must provide the following information on Form 500CR if
they are eligible for the One Maryland Economic Development Tax
The refundable years include any tax year after the 4th tax year
Credit: (1) Maryland taxable income; (2) Maryland taxable income
following the tax year in which the project is placed in service, for
from the project; (3) non-project taxable income; (4) number of
the project credit, or in which the business locates to a qualified
qualified employees; (5) if the number of employees is less than 25
distressed Maryland county for the start-up credit but must be before
employees, a PTE must state whether of not the qualified business
the 15th tax year following the tax year in which for the project credit
entity had 25 filled qualified positions for at least five years from the
the project is placed in service or in which for the start-up credit the
time they have been eligible or the credit; (6) the Tax Year the project
business locates to a qualified distressed county.
was out into service; (7) amount of Maryland income tax required to
be withheld from these qualified employees; (8) total eligible project
If the majority of the qualified positions are paid at least 250% of the
costs; (9) $5,000,000 maximum; (10) total eligible start-up costs;
federal minimum wage, then the refundable years will begin after the
(11) $500,000 maximum. Therefore, a PTE must complete Sections
2nd tax year rather than the 4th tax year.
A and C of Part P-I.
Section A - Project Costs The refundable portion of the project
The allocable or pro-rata portion of these items must be furnished to
credit for the tax year is calculated after the nonrefundable portions
each member of the PTE on the member’s respective Schedule K-1.
of the credit are claimed. The refundable portion is calculated by
The PTE must also indicate on the Schedule K-1 whether or not the
subtracting the amount allowed as the nonrefundable portion of this
PTE is a qualified business entity which would be entitled to pass on
credit (PART P-II, line 17) claimed for this tax year from the remaining
a refundable credit or whether the credit is nonrefundable only. The
available project credit amount (PART P-II, line 15).
PTE must provide a copy of the final certification to each member.
This amount is the remaining excess eligible project costs for the
SPECIAL INSTRUCTIONS FOR MEMBERS OF QUALIFIED
eligible economic development project.
BUSINESS ENTITIES THAT ARE PASS-THROUGH ENTITIES
This project credit amount is applied against the remaining, available
Based on the PTE Schedule K-1, a member may then file the
state tax liability. This section is used to calculate the portion of the
applicable Maryland income tax return, attaching Form 500CR, to
nonrefundable tax credit that is allowed against the State tax on
claim the One Maryland Economic Development Tax Credit. The
non-project taxable income during the refundable tax years of the
member should complete PART P of Form 500CR in its entirety to
One Maryland Economic Development Tax Credit.
compute the credit amounts and claim any of the credits allowed for
the tax year. For the sections in Part P-I, the member would complete
The tentative refund is the amount, if any, by which any unused
Column 2 only.
excess project credit amount exceeds the state tax liability. The
refundable portion is limited to the amount of Maryland income tax
11-49
Rev 9/12
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