Maryland Additions To Income
Maryland requires taxpayers to make certain additions to their federal adjusted gross income (AGI) when calculating their Maryland taxable income. These additions ensure that income sources not taxed at the federal level or subject to different treatment are appropriately included in Maryland’s tax base.
Key Additions to Income
- Federal Adjusted Gross Income (AGI): For Maryland residents, copy the federal AGI from Line 11a of Form 1040/1040SR to Line 1 of Form 502. Nonresidents use Line 17, Column 1 of Form 505.
- Non-Maryland Losses and Adjustments: Include non-Maryland losses or adjustments to federal income attributable to non-Maryland sources on Line 18 of Form 505.
- Capital Gain Income: Net capital gain income included in Maryland AGI must be reported. If federal AGI exceeds $350,000, a 2% additional tax applies on certain capital gains. Use Form 502CG to calculate this tax.
- Credits and Additions: Additions are required for credits from Parts A, C, J-I, K-I, K-II, V, and Part BB of Form 500CR. These additions are entered on line 7f of Form 500, line 5 of Form 502, or line 19 of Form 505.
When Are Additions Required?
Additions to income are necessary when:
- You have non-Maryland source losses or adjustments.
- Your federal AGI exceeds $350,000 and you have net capital gain income.
- You claim business income tax credits that require an addition to income (e.g., Form 500CR).
How to Report Additions
- Residents: Report additions on Line 19 of Form 502.
- Nonresidents: Report additions on Line 19 of Form 505 (for Maryland-source income) or Line 18 for non-Maryland losses.
- Attach Form 502CG if you meet the capital gain threshold and have net capital gains.
Source:
Form 502AC
Form 502CG
Form 502 Instructions
Form 505 Instructions
Disclaimer: Always verify information with official Federal or State Department of Revenue Forms and Instructions.