Maryland Credit for Tax Paid to Other States
The Maryland Credit for Tax Paid to Other States allows residents who file joint federal returns but separate Maryland returns, or who have income taxed in another state, to claim a credit for income taxes paid to another state. This credit helps prevent double taxation on the same income.
How to Claim the Credit
- Complete Line 17 on Form 502CR (Income Tax Credits for Individuals) to claim the state credit for income tax paid to another state. The amount claimed is the lesser of Line 10 or Line 16.
- Enter the credit amount on Line 1, Part AA of Form 502CR.
- For local credits, subtract Line 17 from Line 16 and enter the result on Line 1, Part BB.
Important Notes
- There is an addback requirement for the portion of the credit that represents tax paid by an out-of-state pass-through entity on the member’s pro rata share of income, which is then passed through to the member.
- Individual taxpayers should refer to the Resident Booklet instructions for any necessary addition or modification.
- Fiduciary taxpayers should consult the Fiduciary Booklet Instruction 7 for guidance.
Eligibility and Limitations
- The credit is limited to the amount of Maryland state income tax liability.
- No carryover of unused credits to future tax years is allowed.
Source:
Form 502CR - Income Tax Credits for Individuals
Resident Booklet Instructions
Disclaimer: Always verify details with official Federal or State Department of Revenue Forms and Instructions.