Instructions For Form 500cr - Business Income Tax Credits

2013

BUSINESS INCOME TAX

MARYLAND

FORM

CREDITS INSTRUCTIONS

500CR

On line 2, Part G, enter 20% of the first $6,000 of wages for each

located in Maryland.

The SCIF must be accredited by the

employee referenced on line 1. Enter this amount on line 7, Part W.

appropriate federal agency. For costs related to a single SCIF,

the credit is equal to the lesser of 50% of the costs or $200,000.

The amount of the credit from line 2, Part G, also is an addition

For costs related to multiple SCIFs, the credit is the amount of

modification. Whenever a Long-term Employment of Qualified Ex-

costs up to $500,000 per calendar year.

Felons Tax Credit is claimed against the income tax, an addition

modification must be made in the amount of the credit claimed.

Also, a business may claim a credit against its Maryland State

income tax up to $200,000 per tax year for qualified security

This credit is not refundable and is applied only against the

clearance administrative expenses.

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

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

Qualified expenses include:

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

• Processing application requests for federal security clearance;

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

• Maintaining, upgrading or installing computer systems

For more information, contact:

in Maryland that are required to obtain federal security

Maryland Department of Labor, Licensing and Regulation

clearance; and,

Division of Workforce Development and Adult Learning

• Training employees in the State to administer the clearance

1100 N. Eutaw Street

application process.

Baltimore, MD 21201

410-767-2047

Whenever a credit is claimed against the income tax, an addition

modification must be made in the amount of the credit claimed

in Part J-I, line 3.

PART H - WORK-BASED LEARNING PROGRAM CREDIT

Claiming the Tax Credit

The Work-Based Learning Program Credit expired December 31,

To claim the ESCC tax credit, a business must submit an application

2012. No more credits may be earned for this program.

to DBED by September 15th following the tax year in which the

This credit had a five-year carryover provision. You may carryover

related expenses and costs were incurred. By December 15th of

any unused portion of the tax credit from line 7, Part X, of your

that year, DBED will certify the approved amount for which the

2012 Form 500CR to line 24 of Part W.

applicant will be required to file an electronic amended Maryland

income tax return with the Comptroller of Maryland to claim the

credit and include a copy of the DBED certification.

PART I - EMPLOYER-PROVIDED LONG-TERM CARE

INSURANCE TAX CREDIT

The business will enter the DBED-certified amount of construction

and equipment costs incurred to construct or renovate SCIFs on

A credit is allowed for premiums paid by employers to provide long-

line 1, Part J-I.

term care insurance to their employees as part of their benefits

package. The employer may claim a credit of 5% of the premiums

On line 2, Part J-I, the business will enter the amount of certified

paid during the tax year or $100 for each Maryland employee

Security Clearance Administrative expenses, not to exceed

covered by long-term care insurance provided, whichever is less,

$200,000.

but cannot be more than $5,000.

Line 3, Part J-I, will reflect the sum of line 1 and line 2. This

Specific Instructions

amount also is an addition modification on the tax return.

On line 1, Part I, enter 5% of the long-term care insurance

Part J-II – The First Year Leasing Costs Tax Credit for

premiums paid as part of an employee benefit package.

Qualified Small Business

On line 2, Part I, enter the number of employees within Maryland

A qualified small business also may claim a credit against its

covered under the employee benefit package in the box provided.

Maryland income tax up to $200,000 for costs for rental payments

during the first year of a rental agreement for leasing spaces to

Multiply this by $100 and enter the result on line 2.

perform security-based contracting work.

On line 3, Part I, enter the lesser of line 1 or line 2.

In Part J-II, a qualified small business will claim the amount of

On line 4, Part I, enter the lesser of line 3 or $5,000.

First Year Leasing Costs Tax Credit approved by DBED.

Also enter the amount from line 4, Part I, on line 9, Part W.

The total ESCC tax credit approved by DBED may not exceed

$2 million for any calendar year. If the total amount of credits

This credit is not refundable and is applied only against the

applied for by all businesses exceeds $2 million, the credits will

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

be approved on a pro rata basis.

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

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

Excess credit may be carried forward until the excess amount is

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

fully used.

No credits may be earned for any tax year beginning on or

after January 1, 2017.

PART J – MARYLAND EMPLOYER SECURITY

CLEARANCE COST (ESCC) TAX CREDIT

Note: Special Rules for Calendar Year 2013.

A business may be eligible to claim credits against the State

Because the new law goes into effect July 1, 2013, special rules

income tax for certain costs related to federal-based security

apply for ESCC for the calendar year 2013.

contracting. For a business to be eligible, it must apply to and be

For more information, contact:

certified by the Maryland Department of Business and Economic

Development (DBED).

Maryland Department of Business and Economic Development

Office of Finance Programs, Tax Incentives

Part J-I – Credits for Sensitive Compartmented Information

401 E. Pratt St.

Facilities (SCIFs) and Security Clearance Administrative

Baltimore, MD 21202

Expenses

410-767-6438 or 410-767-4041

A business may claim a credit against its Maryland State income

tax for costs related to the construction or renovation of SCIF

13-49

Instructions For Form 500cr - Business Income Tax Credits - 2013 Page 6

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