Instructions For Form 502cr - Income Tax Credits For Individuals

If the Maryland resident must file an individual nonresident return

you may be entitled to a credit on your Maryland state income tax

reporting the partnership, S corporation, LLC or business trust

return. The credit starts at 32.5% of the federal credit allowed, but

income, a separate Form 502CR must be completed for each state

is phased out for taxpayers with federal adjusted gross incomes

and submitted with a copy of the return filed with the other state.

above $41,000 ($20,500 for individuals who are married, but file

For both composite returns and individual returns, no credit is avail-

separate income tax returns). No credit is allowed for an individual

able for taxes paid to states in Group III, or for taxes paid to cities

whose federal adjusted gross income exceeds $50,000 ($25,000 for

or local jurisdictions.

married filing separately). Use the chart below to determine the

decimal amount to be entered on line 3 of Part B.

Shareholders of S Corporations - Maryland resident shareholders

can claim a credit for taxes paid by an S corporation to a state

PART C - QUALITY TEACHER INCENTIVE CREDIT

which does not recognize federal S corporation treatment. A copy

If you are a qualified teacher, you may be able to claim a credit

of the corporation return filed in the other state is required to be

against your State tax liability for tuition paid to take graduate-level

attached to the Maryland return. A separate Form 502CR should be

courses required to maintain certification. This credit applies to

completed for each state showing the following information:

individuals who:

a. currently hold a standard professional certificate or advanced

_______________% x_______________ =________________________

professional certificate;

Stock ownership

Corporation taxable Line 2, Part A, Form 502CR

b. are employed by a county/city board of education in Maryland, a

percentage

income

state or local correctional facility, or a juvenile correctional facility

as listed below in the note;

_______________% x_______________ =________________________

c. teach in a public school or qualified facility and receive a satis-

factory performance;

Stock ownership

Corporation tax

Line 7, Part A, Form 502CR

percentage

d. successfully complete the courses with a grade of B or better;

and

NOTE: A preliminary calculation using Form 502 must be made

e. have not been fully reimbursed by the state/county/city for these

before calculating the credit on Form 502CR. Complete lines 1

expenses. Only the unreimbursed portion qualifies for the credit.

through 22 on Form 502 to determine the amounts to be used for

the 502CR computation.

Each spouse that qualifies may claim this credit. Complete a sepa-

rate column in the worksheet for each spouse.

The credit amount shown on line 8 of Part A, Form 502CR must

then be included as an addition to income on line 5 of the Form 502

NOTE: Qualified juvenile facilities are: the Alfred D. Noyes Children's

you will file.

Center; the Baltimore City Juvenile Justice Center; the Charles H.

Hickey, Jr. School; the Cheltenham Youth Facility; the J. DeWeese

D.C. Unincorporated Business Franchise Tax - Self-employed

Carter Center; the Lower Eastern Shore Children's Center; the

individuals and partners in a partnership that are subject to D.C.

Thomas J. S. Waxter Children's Center; the Victor Cullen Center;

unincorporated business franchise tax may claim a credit on Form

the Western Maryland Children's Center; and the youth centers.

502CR. A copy of the D.C. return is required for self-employed

individuals and for partners, a K-1 or other statement from the part-

INSTRUCTIONS

nership showing the partner’s share of income and the partner’s

Line 1. Enter the name of the Maryland public school system or

share of the D.C. tax.

State or local correctional facility or qualified juvenile facility

Installment Sales in Another State - You may be eligible for

in which you are employed and teach.

credit for taxes paid to another state for gain recognized on installment,

Line 2. Enter the amount of tuition paid for graduate-level courses

sales proceeds, even if the other state required the total be recognized

for each qualifying teacher and the name of the institution(s)

in an earlier tax year. Credit is allowed against the state income tax

it was paid.

only. The gain must have been deferred for federal tax purposes, but

fully taxed in the year of the sale by another state that does not recog-

Line 3. Enter the amount received as a reimbursement for tuition

nize the deferral. The credit allowed is the amount of the gain taxed in

from your employer.

Maryland in the current year multiplied by the lesser of:

Line 5. The maximum amount of credit allowed is $1,500 for each

• the highest state tax rate used on your Maryland tax return or

qualifying individual.

• the tax rate imposed by the other state on the gain.

Line 6. The credit is limited to the amount paid less any reimburse-

PART B - CREDIT FOR CHILD AND DEPENDENT CARE

ment up to the maximum amount allowed for each qualify-

EXPENSES

ing individual. Enter the lesser of line 4 or line 5.

If you were eligible for a Child and Dependent Care Credit on your

Line 7. Enter the total of line 6, for Taxpayers A and B. Also enter

federal income tax return, Form 1040 or 1040A for tax year 2011,

this amount on line 3, Part G.

Credit for Child and

dependent Care expenses Chart

If your filing status is Married Filing Separately

Decimal Amount

For all other filing statuses, if your federal

and your federal adjusted gross income is:

adjusted gross income is:

At Least

But less than

At least

But less than

$0-

$20,501

.3250

$41,001

$20,501

$21,001

.2925

$41,001

$42,001

$21,001

$21,501

.2600

$42,001

$43,001

$21,501

$22,001

.2275

$43,001

$44,001

$22,001

$22,501

.1950

$44,001

$45,001

$22,501

$23,001

.1625

$45,001

$46,001

$23,001

$23,501

.1300

$46,001

$47,001

$23,501

$24,001

.0975

$47,001

$48,001

$24,001

$24,501

.0650

$48,001

$49,001

$24,501

$25,001

.0325

$49,001

$50,001

$25,001

or over

.0000

$50,001

or over

Instructions For Form 502cr - Income Tax Credits For Individuals - 2011 Page 2

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