Form 500cr - Maryland Business Income Tax Credits - 2012 Page 14
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172012
FORM
MARYLAND BUSINESS INCOME
500CR
TAX CREDITS INSTRUCTIONS
multiplied by $10,000.
PART P - III REFUNDABLE ONE MARYLAND ECONOMIC
DEVELOPMENT TAX CREDIT
PTEs stop here. PTEs do not complete the remainder of Part P.
Generally, at any time after the 4th tax year following the tax year
PART P - II CREDITS AGAINST TAX LIABILITY AND TAX ON
after the project was placed in service, the business may apply
INCOME FROM THE PROJECT
the excess to the entity’s total Maryland state income tax liability
and may request a refund of any excess credit.
Beginning with Part P-II, the computation returns to one column
and is used by all taxpayers eligible to claim this credit except
The refundable years include any tax year after the 4th tax year
for PTEs.
following the tax year in which the project is placed in service, for
the project credit, or in which the business locates to a qualified
Part P-II is used to calculate the credits that can be claimed for
distressed Maryland county for the start-up credit but must be
the project credit and the start-up credit during nonrefundable tax
before the 15th tax year following the tax year in which for the
years for the One Maryland Economic Development Tax Credit.
project credit the project is placed in service or in which for the
start-up credit the business locates to a qualified distressed county.
The nonrefundable tax years consist of the initial tax year and any
carryover years. During this period, these credits are limited up to
If the majority of the qualified positions are paid at least 250% of
a certain amount of the entity’s state tax liability.
the federal minimum wage, then the refundable years will begin
after the 2nd tax year rather than the 4th tax year.
A carryover credit may be claimed for the project tax credit against
the state income tax on the project taxable income until the earlier
Section A - Project Costs The refundable portion of the project
of the full amount of excess eligible project costs is used, or until
credit for the tax year is calculated after the nonrefundable portions
the 14th tax year following the tax year in which the eligible
of the credit are claimed. The refundable portion is calculated by
economic project is placed in service. A carryover credit may be
subtracting the amount allowed as the nonrefundable portion of
claimed for the start-up tax credit against state income tax until
this credit (PART P-II, line 17) claimed for this tax year from the
the earlier of the full amount of the excess eligible startup costs,
remaining available project credit amount (PART P-II, line 15).
or until the 14th tax year following the tax year in which the entity
locates in a qualified distressed county.
This amount is the remaining excess eligible project costs for the
eligible economic development project.
Part P-II is also used to calculate a certain nonrefundable portion
of the project credit and the nonrefundable start-up credit that
This project credit amount is applied against the remaining,
may be claimed during the tax years when these credits also may
available state tax liability. This section is used to calculate the
have refundable portions.
portion of the nonrefundable tax credit that is allowed against the
State tax on non-project taxable income during the refundable
Section A - Project Costs Tax Credit
tax years of the One Maryland Economic Development Tax Credit.
On line 14 enter the sum of the amount of the project credits
The tentative refund is the amount, if any, by which any unused
allowed for the eligible project costs in the initial tax year (the
excess project credit amount exceeds the state tax liability. The
first tax year in which this credit was claimed), prior carryover tax
refundable portion is limited to the amount of Maryland income
years, and any refundable tax year amounts.
tax withheld during this tax year from the wages of qualified
employees (line 5).
The amount on line 15 is the amount of remaining excess eligible
project costs that are available to be claimed by the qualified
Section B - Start-up Costs The refundable portion of the startup
business entity as a project credit for this tax year. The project
credit is calculated after the nonrefundable portion of this credit
credit that may be claimed in Part P-II is limited up to the amount
is claimed. The tentative refund is the amount of the remaining
of your Maryland tax liability on the project taxable income.
excess start-up credit. The refundable portion of the start-up credit
is limited to the amount of Maryland income tax withheld during
Enter on line 16 the amount of the Maryland liability attributable
this tax year from the wages of qualified employees (line 5).
to income from the project (line 7b). Line 17, the lesser of line 15
or line 16, is the “Credit against tax on income from the project.”
PART P - IV SUMMARY
Section B - Start-up Costs Tax Credit
Complete the summary of credit amounts claimed for the project
credits and start-up credit for the One Maryland Economic
On line 18 enter the sum of the amount of the start-up credits
Development Tax Credit.
allowed in the initial tax year, prior carryover tax years, and
any refunds (these are the amounts claimed as refunds for the
Enter on line 35 the nonrefundable portions of the project and
start-up credit during the tax years when this credit becomes a
start-up costs credits from lines 33 and 34. This is the total
refundable credit). The amount calculated on line 19 is the excess
nonrefundable One Maryland Economic Development Tax Credit.
amount available to be claimed by the qualified business entity
as a start-up credit.
This amount should also be entered on line 16 of Part W.
The start-up credit is equal to the lesser of the amount on line
Add lines 36 and 37 and enter this amount on line 38. This is the
19 or line 13 (qualified employees multiplied by $10,000). The
total refundable One Maryland Economic Development Tax Credit.
start-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
This amount should also be entered on line 1 of Part Y.
was claimed in Part P-II, then the amount of the start-up credit
NOTE: A copy of the final credit certification from the Department
on line 22 is limited to the remaining Maryland state tax liability
of Business and Economic Development must be included with
after taking the nonrefundable project credit (line 21).
Form 500CR.
12-49
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