What's New for the 2020 Tax Filing Season (2019 Tax Year)

Here are some of the most important changes and benefits affecting the approximately 3.5 million taxpayers working on their 2019 Maryland income tax returns.

Note: For forms, visit the 2019 Individual Tax Forms pages.

2019 Individual Income Tax Instruction Booklets

Booklet Title Description
Resident Maryland State and Local Tax Forms and Instructions Instructions for filing personal state and local income taxes for full- or part-year Maryland residents.
Nonresident Maryland Tax Forms for Nonresidents Instructions for filing personal income tax returns for nonresident individuals.
Fiduciary Maryland Instructions for Fiduciaries Instructions for filing fiduciary income tax returns.

Opening of the 2020 Tax Filing Season

The IRS began accepting all Business tax returns on January 7, 2020.

Maryland started accepting all Business tax returns on January 7, 2020.

The IRS began accepting all Individual tax returns on January 27, 2020.

Maryland started accepting all Individual tax returns on January 27, 2020.

Claiming Business Income Tax Credits

For tax years beginning after December 31, 2012, you must file your tax return electronically in order to claim a business tax credit unless you submit a waiver from the electronic filing requirement. To request a waiver from filing the Form 500CR electronically, you must submit a completed Form 500CRW Waiver Request For Electronic Filing of Form 500CR and it must be attached to Form 500CR in the filing of your return.

Beginning with Tax Year 2015 certain individual taxpayers may elect to claim the Community Investment Tax Credit and/or the Endow Maryland Tax Credit on Maryland Form 502CR, and thus avoid the electronic filing requirement. Read instructions to Form 502CR to see if you qualify for this election.

Filing Deadline

Personal income tax returns are due by April 15, 2020.
Business income tax return dates vary. See Filing Extensions and Deadlines for Corporations

Local Taxpayer Service Offices

Taxpayer Service Offices will be open from 8:30 a.m. to 4:30 p.m., Monday through Friday to help taxpayers fill out and electronically file Maryland income tax forms for free. Please bring any W-2 statements or other withholding statements, such as 1099s, that you have, along with your completed federal income tax return.

New Tax Rates

  • Local Tax Rate Changes -   There have been 7 local tax rate changes for tax year 2020. Anne Arundel County to 2.81%, Washington County to 3.2%, Baltimore County to 3.2%, Dorchester County to 3.2%, Kent County to 3.2%, St. Maryís County to 3.17%, and Worcester County to 2.25%. The special nonresident income tax has increased to 2.25%.

Exemptions and Deductions

There have been no changes affecting personal exemptions on the Maryland returns.

Personal Exemption Amount - The exemption amount of $3,200 begins to be phased out if your federal adjusted gross income is more than $100,000 ($150,000 for joint taxpayers). The $3,200 exemption is phased out entirely when the income exceeds $150,000 ($200,000 for joint taxpayers). See Instruction 10 in the Resident tax booklet for the reduced amounts, or review the page, Determine Your Personal Income Tax Exemptions. The additional exemption of $1,000 remains the same for age and blindness.

Dependent Form 502B - will be required to be attached to Form 502, Form 505 and Form 515 to determine what exemptions you are entitled to claim. 

Standard Deduction - The tax year 2019 standard deduction is a maximum value of $2,250 for single taxpayers and to $4,550 for head of household, a surviving spouse, and taxpayers filing jointly.

Itemized Deduction Limitation - The State of Maryland follows the new federal tax law treatment to suspend the itemized deduction limitation threshold (Pease Limitation). This means that high-income taxpayers are not required to reduce their itemized deductions using the itemized deduction worksheet used in prior years.

Should I take the standard deduction or itemize? - The federal tax reform of 2017 significantly raised the federal standard deduction. Under current Maryland law, if you take the standard deduction the federal level, you cannot itemize at the Maryland level. You may take the federal standard deduction, while this may reduce your federal tax liability, it may result in an increase to your Maryland income tax liability. The Comptroller's Office encourages you to run your income tax returns under both deduction methods, and to compare the results of taking the standard deduction versus itemizing your deductions, to see which method causes the lowest overall tax liability.

Limitation on deduction for state and local tax - Federal tax reform limited the amount you can deduct for state and local taxes. You cannot claim more than $10,000 ($5,000 for married filing separately) for state and local taxes you paid. The new federal limitation impacts your Maryland return because you must addback the amount of state income taxes you claimed as federal itemized deductions. The addback is limited to $10,000 ($5,000 for married filing separately) and is reported on line 17b of the Maryland Form 502. Maryland will accept any reasonable interpretation of the limitation reported on line 17b. A reasonable interpretation of the law includes the following example: you, a single filer, paid $8,000 in real property taxes and $4,000 in Maryland state income taxes, Maryland will accept an addback of state income tax of $2,000 on Line 17b. In this example, the real estate taxes make up $8,000 of your $10,000 limitation and only $2,000 are required to be added back as state income taxes.

Tax Forms, Instructions & Booklets

The resident tax booklets contain both the tax forms and the instructions for each major form. The tax forms on the Web site are available separately from the resident and nonresident instruction booklets.

All of our tax forms have been reformatted to ensure enhanced readability when paper forms are filed. This  format has increased the number of pages of some of the tax returns. Make sure that you attach all pages of your return to ensure that your return is processed correctly. 

  • Tax Forms and Instructions Online - Tax forms and instructions for Individual and Business taxpayers are available here online at Maryland Tax Forms and Instructions (business and individuals). 
  • Tax Booklets at Libraries - We have provided a limited supply of tax booklets to a number of libraries throughout the State that have requested them.
  • Tax Booklets at Comptroller's Taxpayer Service Offices -  Tax booklets are available at all of our local taxpayer service offices.
  • Request a Tax Booklet - Taxpayers may request a resident or nonresident tax booklet by calling (410) 260-7951, or by e-mail at taxforms@marylandtaxes.gov.

Subtractions

Increased pension exclusion - Maryland's maximum pension exclusion, which is available to qualifying taxpayers who are age 65 or older; are totally and permanently disabled; or have a spouse who is totally and permanently disabled, increased to $31,100 for tax year 2019.

Pension exclusion for qualifying retired correctional officer, law enforcement officer or fire, rescue, or emergency services personnel - Pursuant to House Bill 296 (Acts of 2018), the pension exclusion for Retired Law Enforcement Officer or Fire, Rescue, or Emergency Services Personnel has expanded eligibility to include retirement income of correctional officers. Up to a $15,000 subtraction for resident retired law enforcement officers, fire, rescue and emergency personnel who are at least 55 years old and (1) were employed by the State, a political subdivision of the State, or the federal government, and (2) receive pension income related to their above employment. An individual may not claim both this subtraction and the standard pension exclusion.

Subtraction modification updates for tax year 2019:

There were no new subtractions for tax year 2019. However, there have been modifications to a few.

  • Increase to the existing Honorable Louis L. Goldstein Volunteer Fire, Rescue and Emergency Medical Services Personnel Subtraction Modification Program maximum amount to $5,000.
  • The mileage rate for certain qualifying charitable use of a car on Form 502V has increased to 58 cents.
  • 502B
  • In addition to a subtraction for Child Care Expenses taxpayers may also be entitled to a credit for the taxable expenses. See instructions for Part B and Part CC of Form 502CR.
  • Code letter U now includes $5,000 of military retirement income including death benefits received by a qualifying individual under the age of 55; or up to $15,000 of military retirement income including death benefits received by a qualifying individual over the age of 55.
  • Code letter OO now includes Maryland Transportation Authority Police.

Individual Taxpayer Changes

  • A new checkbox on the Form 502 has been added for taxpayers to indicate they are claiming the Maryland Earned Income Credit, but do not qualify for the federal Earned Income Credit. This is a result of House Bill 856 (Acts of 2018) amending the Maryland earned income tax credit to allow an individual without a qualifying child to claim the credit without regard to the minimum age requirement under the Internal Revenue Code.
  • The Form 502 includes a new section on Maryland Health Care Coverage for individuals to indicate whether an individual is interested in obtaining minimum essential health coverage. For purposes of determining health care coverage eligibility, the Form 502B contains new check-boxes and date of birth fields. The changes are a result of House Bill 814 (Chapter 423, Acts of 2019) passed by the Maryland General Assembly.
  • Interest Rate Decrease: Interest is due at the rate of 10.5% annually or 0.8750% per month for any month or part of a month that a tax is paid after the original due date of the 2019 return but before January 1, 2021. For assistance in calculating interest for tax paid on or after January 1, 2021, see the Comptrollerís website. Enter any interest due on the appropriate line of your tax return.
  • Updated Form 502CR, Part CC: Reflects the possibility of being eligible for a refundable tax credit for Child and Dependent Care expenses.
  • Form 502CR, New Part L: Endowments of Maryland Historically Black Colleges and Universities. Donations to a permanent endowment fund may be eligible for a credit up to 25% of the donation amount.
  • Many state revenue agencies, including Maryland, are requesting additional information in an effort to combat stolen-identity tax fraud and to protect you and your tax refund. If you and your spouse have a driver's license or state issued identification card, please provide the requested information from it. The return will not be rejected if you do not provide a driver's license or state-issued identification. If you provide this information, it may help to identify you as the taxpayer.

Business Taxpayer Changes

Single Sales Factor Apportionment: For apportioning income to the state for corporate income tax purposes, a single sales factor apportionment formula has been updated for tax year 2019.

Changes to business tax credits

  • New Credit: ENDOWMENTS OF MARYLAND HISTORICALLY BLACK COLLEGES AND UNIVERSITIES TAX CREDIT. A taxpayer may claim the Endowments of Maryland Historically Black Colleges and Universities Tax Credit against the State income tax in the amount stated on the tax credit certificate issued by the Comptroller. If the credit exceeds the State income tax for the taxable year, the excess credit is non-refundable, but it may be carried forward and applied to succeeding taxable years until fully utilized.
  • A qualified film production entity that has been incorporated in Maryland for at least 3 months and meet the requirements set forth in TG section 10-730, may claim a credit against the State income tax for film production activities in the State. If there is any excess of this credit, the entity may claim a refund in the amount of the excess.

Tax Professional Changes

Please see the latest updated list of approved eFile software vendors for individuals and businesses.

New business tax credit: There is one new credit Endowments of Maryland Historically Black Colleges and Universities Income tax Credit