Instructions For Form 500cr - Business Income Tax Credits

2013

BUSINESS INCOME TAX

MARYLAND

FORM

CREDITS INSTRUCTIONS

500CR

(a) Voluntarily leaves the employer;

a business facility in a single location in the state and is filled.

Qualified business entities are those certified as such by the

(b) Becomes further disabled or death occurs; or,

Maryland Department of Business and Economic Development.

A qualified employee is an employee filling a qualified position.

the portion of the year the employee worked unless the

This credit is not refundable and is applied only against the

employee voluntarily left to take another job.

Maryland State tax. To the extent the credit is earned in any year

On line 1, Part C-I, enter the number of qualified employees in

and it exceeds the State income tax, the business is entitled to

their first year of employment in the “First Year” box. Enter the

an excess carryover of the credit until it is used, or the expiration

number of qualified employees in their second year of employment

of five years after the credit was earned, whichever comes first.

in the “Second Year” box.

Recapture Provision If, at any time during the three tax years

On line 2, Part C-I, enter the credit equal to 30% of the first $6,000

after the year the credit was earned, the average number of

of wages paid to each first year qualified employee.

qualified positions falls more than 5% below the average number

of qualified positions during the year in which the credit was

On line 3, Part C-I, enter the credit equal to 20% of the first

earned, a portion of the credit will be recaptured for the tax year

$6,000 of wages paid to each second year qualified employee.

in which this occurs.

On line 4, Part C-I, enter the sum of lines 2 and 3.

The amount to be recaptured is the amount originally claimed

Part C-II - Credit for Child Care and Transportation

multiplied by the percentage reduction in the number of qualified

Expenses

employees. The credit to be recaptured is reported on line 26,

Part W of Form 500CR.

An additional credit is allowed for expenses incurred by the

employer for approved day care services for a child or children

Certification must be included with the Form 500CR when claiming

of a qualified employee, or for transportation expenses that are

this credit.

incurred to enable a qualified employee to travel to and from work.

For certification or for information on the standards that businesses

A credit of up to $600 is allowed for the first year of employment

must meet to qualify, contact:

and up to $500 for the second year. To verify if a child care center

Maryland Department of Business and Economic Development

qualifies as an approved provider, contact the Department of

Office of Finance Programs, Tax Incentives

Human Resources, Child Care Administrator for the county or city

401 E. Pratt St.

in which the child care center is located.

Baltimore, MD 21202

On line 5, Part C-II, enter the number of qualified employees in

410-767-6438 or 410-767-4980

their first year of employment in the “First Year” box. Enter the

number of qualified employees in their second year of employment

Specific Requirements

in the “Second Year” box.

Part D-I - Credit for employees of a qualified business. A

On line 6, Part C-II, enter the credit equal to a combined total

credit is allowed for each newly created qualified filled position.

of $600 in child care and transportation expenses per each first

The credit is the lesser of $1,000 multiplied by the number of filled

year qualified employee with a disability.

qualified positions during the credit year or 2.5% of the wages

On line 7, Part C-II, enter the credit equal to a combined total of

paid for these positions for the credit year.

$500 in child care and transportation expenses per each second

Part D-I reflects the calculation of the credit for employees of

year qualified employee with a disability.

a qualified business that is not located in a Revitalization Area.

On line 8, Part C-II, enter the sum of lines 6 and 7.

Enter the number of qualified positions for the current year on

Part C - Summary

line 1, Part D-I.

On line 9 Part C, enter the sum of lines 4 and 8.

Multiply line 1 by $1,000 and enter the result on line 2, Part D-I.

Also the amount on line 9, Part C, becomes an addition

Enter on line 3, Part D-I, 2.5% of the wages paid for each of the

modification. Whenever this credit is claimed against the income

qualified positions on line 1.

tax, an addition modification must be made in the amount of the

On line 4, Part D-I, enter the lesser of line 2 or line 3.

credit claimed.

Part D-II - Credit for employees working in a Facility

This credit is not refundable and is applied only against the

Located in a Revitalization Area. A credit is allowed for each

Maryland State tax. To the extent the credit is earned in any year

newly-created qualified filled position located in a Revitalization

and it exceeds the State income tax, the business is entitled to

Area. The credit is the lesser of $1,500 multiplied by the number

an excess carryover of the credit until it is used, or the expiration

of filled qualified positions or 5% of the wages paid for these

of five years, whichever comes first.

positions.

Part D-II reflects the calculation of the credit for employees of a

PART D - JOB CREATION TAX CREDIT

qualified business working in a facility located in a Revitalization

Area.

General Requirements Certain businesses that create new

qualified positions in Maryland may be eligible for tax credits

Enter the number of qualified positions working in a Revitalization

based on the number of qualified positions created or wages paid

Area for the current year on line 5, of Part D- II.

for these positions.

Multiply line 5 by $1,500 and enter the result on line 6, Part D-II.

The business facility must be certified as having created at least

Enter on line 7, Part D-II, 5% of the wages paid for each of the

60 qualified positions, 30 high-paying qualified positions, or 25

qualified positions on line 5.

qualified positions if the business facility established or expanded

is in a State Priority Funding Area.

On line 8, Part D-II, enter the lesser of line 6 or line 7.

A qualified position is a full-time position which pays at least

Part D - Summary

150% of the federal minimum wage, is located in Maryland, is

The total credit will be taken over a two-year period. One-half of

newly created as a result of the establishment or expansion of

13-49

Instructions For Form 500cr - Business Income Tax Credits - 2013 Page 4

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