Tax Credits and Deductions for Individual Taxpayers

You may be eligible to claim some valuable personal income tax credits available on your Maryland tax return.

The following list contains general information about some of the most commonly used credits. You may want to consult with a tax professional to review specific requirements. Some of these credits contain carryover or recapture provisions and, in some cases, you may have to seek certification from another state agency. For more information, see Form 502CR



State Department of Assessments and Taxation Credits

Tax Credits for Homeowners and Renters

A credit is allowed for cost of new aquaculture oyster floats that are designed to grow oysters at or under an individual homeowner's pier. The devices must be buoyant and assist in the growth of oysters for the width of the pier. The credit amount is limited to the lesser of the individual's state tax liability for that year or the maximum allowable credit of $500.

If the credit is more than the tax liability, the unused credit may not be carried forward to another tax year.

To claim the credit, you must complete Part D of Form 502CR and attach to your Maryland income tax return. You must also report the credit on Maryland Form 502, 505 or 515.

If you contribute to the Maryland Prepaid College Trust, the Maryland College Investment Plan Maryland ABLE account.

Up to $2,500 per contract purchased for advanced tuition payments made to the Maryland Prepaid College Trust. See Administrative Release 32.

Up to $2,500 per contributor per beneficiary of the total of all amounts contributed to investment accounts under the Maryland College Investment Plan. This subtraction modification may not be claimed if the account holder received a State contribution under § 18-19A-04.1 of the Education Article during the taxable year.

Any amount included in federal adjusted gross income as a result of a distribution to a designated beneficiary from a Maryland ABLE account, unless it is a refund or nonqualified distribution. Designated beneficiary means a designated beneficiary as defined in § 18–19C–01 of the Education Article.

Up to $2,500 per ABLE account contributor per beneficiary of the total of all amounts contributed under the Maryland ABLE Program. Subject to the $2,500 annual limitation, any amount disallowed as a subtraction because it exceeds $2,500 may be carried over until used to the next 10 succeeding taxable years as a subtraction.

An amount included in federal adjusted gross income contributed by the State into an investment account under § 18-19A-04.1 of the Education Article during the taxable year. This includes amounts included in federal adjusted gross income contributed by the State into an investment account under the Maryland College Investment Plan. Note: Certain account holders who made contributions to an account in calendar year 2017, but failed to make contributions in accordance with § 18–19A–04.1(e)(1) of the Education Article as enacted by Chapters 689 and 690 of the Acts of the General Assembly of 2016 and were otherwise eligible for a State contribution, received a State contribution of $250 by June 30, 2018. If you are an account holder who receives this State match, you may be eligible for a subtraction. To claim the subtraction, you must file an amended 2017 income tax return

For more information, see Administrative Release 32 - Maryland Prepaid College Trust and Maryland College Investment Plan Tax Benefits and College Savings Plans of Maryland.

If your earned income and federal adjusted gross income plus additions are below the poverty level income for the number of exemptions on your federal tax return, you may be eligible for the poverty level credit. You are not eligible for this credit if you checked filing status 6 (dependent taxpayer) on your Maryland income tax return. 

Generally, if your Maryland state tax exceeds 50% of your federal earned income credit and your earned income and federal adjusted gross income are below the poverty income guidelines from the worksheet, you may claim a credit of 5% of your earned income. This is not a refundable credit.

The tax credit can be claimed on Maryland forms 502, 505 or 515.

State Poverty Level Credit Worksheet

If you checked filing status 6 on your Maryland return, you are not eligible for this credit.

1. Enter the amount from line 7 of Form 502. If you checked filing status 3 (married filing separately) and you filed a joint federal return enter your joint federal adjusted gross income plus any  Maryland additions 1.________________
2. Enter the total of your salary, wages, tips and other employee compensation and net profit from self-employment. (Do not include a farm or business loss). 2.________________
3. Find the number of exemptions in the chart that is the same as the number of exemptions entered on your federal tax return. Enter the income level that corresponds to the exemption number. 3.________________
4. Enter the amount from line 1 or 2, whichever is larger. Compare lines 3 and 4. If line 4 is greater than or equal to line 3, STOP HERE. You do not qualify for this credit. If line 3 is greater than line 4, continue to line 5. 4.________________
5. Multiply line 2 by 5% (.05). This is your State Poverty Level Credit. Enter that amount on line 23 of Form 502. 5.________________

 

Poverty Income Guidelines
Number of Exemptions on Federal Return Income Level
1 $12,490
2 $16,910
3 $21,330
4 $25,750
5 $30,170
6 $34,590
7 $39,010
8 $43,430
If you have more than 8 exemptions, add $4,420 to the last income level for each additional exemption.

 

Local Poverty Level Credit Worksheet

If the amount on line 3 is greater than the amount on line 4, you are eligible to claim the local poverty level credit. Complete this worksheet to calculate the amount of your credit.

A. ENTER the amount from line 2 of the State Poverty Level Credit Worksheet A.________________
B. ENTER your local tax rate based on where you live. See Local Tax Rate Chart. B. 0.0___ ___ ___
C. MULTIPLY line A by line B. Enter the amount on line 30 of Form 502. C.________________

To claim the credit:

  • Complete your Maryland return up to the line on the form labeled "Maryland tax."
  • Complete the State Poverty Level Credit Worksheet included in Instruction 18 of the tax booklet and the Local Poverty Level Credit Worksheet in Instruction 19.
  • Enter the state and local credit amounts on the appropriate lines of your Maryland return.

If you are a nonresident or a part-year resident, you must prorate the credits based on the ratio of your Maryland adjusted gross income to your federal adjusted gross income. See Instruction 26(o) in the Maryland tax booklet for more information.

If the credit exceeds your tax liability, the unused credit may not be carried forward to any other tax year.

If you donated an easement to the Maryland Environmental Trust or the Maryland Agricultural Land Preservation Foundation to preserve open space, natural resources, agriculture, forest land, watersheds, significant ecosystems, view sheds or historic properties, you may be eligible for a tax credit.

You may be eligible for the credit if:

  1. the easement is perpetual;
  2. the easement is accepted and approved by the Board of Public Works; and
  3. the fair market value of the property before and after the conveyance of the easement is substantiated by a certified real estate appraiser.

The credit is equal to the difference in the fair market values of the property reduced by payments received for the easement. The credit amount is limited to the lesser of the individual's state tax liability for that year of the maximum allowable credit of $5,000, per owner, who qualifies to claim the credit. The credit can be claimed on Maryland forms 502, 504, 505 or 515.

If the property is owned jointly by more than one individual such as a husband and wife, each individual owner is entitled to the credit based on their percentage of ownership. Individual members of a pass-through entity are not eligible for this credit.

In the case of a joint return, each spouse must calculate their own state tax liability for limitation purposes. Use the rules for filing separate returns in Instruction 8 of the Maryland resident tax booklet. In the case of a fiduciary return, the fiduciary will complete the column for Taxpayer B only.

If the individual's allowable credit amount exceeds the maximum of $5,000, the excess may be carried forward up to 15 years or until fully used. Complete lines 1-7 of Part F on Form 502CR. If you itemize deductions, see Instruction 14 in the Maryland resident tax booklet.

For more information, contact:

Maryland Environmental Trust
100 Community Place, 1st Floor
Crownsville, MD 21032
410-514-7900
dnr.maryland.gov/met/

Maryland Agricultural Land Preservation Foundation
50 Harry S. Truman Parkway
Annapolis, MD 21401
410-841-5860
mda.maryland.gov/malpf/
 

If you are a Maryland resident (including a resident fiduciary) and you paid income tax to another state, you may be eligible for a credit on your Maryland return. Nonresidents (filing Form 505, 515 or 504) are not eligible for this credit.

Find the state to which you paid a nonresident tax in the groups listed below. The instructions for that group will tell you if you are eligible for credit and should complete Part A of Form 502CR.

You must file your Maryland income tax return on:

  • Form 502 and complete lines 1 through 21 of that form; or
  • Form 504 and complete lines 1 through 11.

Then complete Form 502CR Parts A and AA and attach to Form 502 or 504. A completed, signed copy of the income tax return filed in the other state must also be attached to Form 502 or 504.

Group I - Maryland Residents

A Maryland resident (including a resident fiduciary) having income from one of these states must report the income on the Maryland return Form 502 or 504. To claim a credit for taxes paid to another state, complete Form 502CR and attach it and a copy of the other state's nonresident income tax return to your Maryland return.

Alabama - AL Massachusetts - MA Pennsylvania - PA (except wage income)
Arizona - AZ Michigan - MI Rhode Island - RI
Arkansas - AR Minnesota - MN South Carolina - SC
California - CA Mississippi - MS Tennessee - TN
Colorado - CO Missouri - MO Utah - UT
Connecticut - CT Montana - MT Vermont - VT
Delaware - DE Nebraska - NE Virginia - VA (except wage income)
Georgia - GA New Hampshire - NH Washington, DC - DC (except wage income)
Hawaii - HI New Jersey - NJ West Virginia- WV (except wage income)
Idaho - ID New Mexico - NM Wisconsin - WI
Illinois - IL New York - NY Territories and Possessions of the United States
Indiana - IN North Carolina -NC American Samoa - AS
Iowa - IA North Dakota - ND Guam - GU
Kansas - KS Ohio - OH Northern Mariana Island - MP
Kentucky - KY Oklahoma - OK Puerto Rico - PR
Louisiana - LA Oregon - OR U.S. Virgin Islands - VI
Maine - ME    

Group II - Reciprocal States

Maryland has a reciprocal agreement with the following states:

  • Pennsylvania - PA
  • Virginia - VA
  • Washington, DC - DC
  • West Virginia - WV

Group III - No state income tax

No state income tax - No credit allowed.

  • Alaska - AK
  • Florida - FL
  • Nevada - NV
  • South Dakota - SD
  • Texas - TX
  • Washington - WA
  • Wyoming - WY

Dual Residents

A person may be a resident of more than one state at the same time for income tax purposes. If you must file a resident return with both Maryland and another state, use the following rules to determine where the credit should be taken: 

  1. A person who is domiciled in Maryland and who is subject to tax as a resident of any of the states listed in Group I or II can claim a credit on the Maryland return (Form 502) using Part A of Form 502CR.
  2. A person domiciled in any state listed in Group I or II who must file a resident return with Maryland must take the credit in the state of domicile.

Capital gains installment sales

You may be allowed a credit for tax paid to another state when a capital gain is recognized in the current year on the federal return, but was taxed by another state in an earlier year. The gain must have resulted from the sale of a personal residence located in another state or from an installment sale. The credit equals the amount of the gain multiplied by the highest state tax rate used on your Maryland tax return or the personal income tax rate in the other state in the year in which the state taxes the gain, whichever is less.

If the credit exceeds your tax liability, the unused credit may not be carried forward to any other tax year.

As of June 1, 2010, the Sustainable Communities Tax Credit replaces the Heritage Structure Rehabilitation Credit.

A credit may be allowed for substantial expenditures incurred in a 24-month period to rehabilitate a certified heritage structure located in Maryland. The credit is available for owner-occupied residential property, as well as income-producing property. Credits may not be authorized after June 30, 2010.

How the credit is calculated:

The credit is 20% of the total expenditures incurred during the 24 month rehabilitation period. For the rehabilitation of commercial structures, the credit cannot be more than the maximum amount specified under the initial credit certificate, which is based on estimated expenditures. If the application was submitted to MHT before June 1, 2002, the credit based on actual expenditures can be up to $250,000 more than the amount shown on the initial credit certificate.

The credit is claimed in the year in which the rehabilitation is completed; however, it cannot be claimed until the Part 3 certification is approved.

For property certified before July 1, 2001, a business could have received a mortgage credit certificate. In lieu of taking the credit, the certificate may be transferred to the mortgage holder who may then take a credit against their income tax in an amount equal to the face value of the certificate.

For certifications received after June 30, 2001, the amount in excess of the state tax liability can be refunded.

Credits for tax years 2002 and later are limited to $3 million. For non-commercial properties, the credit is $50,000 per property for applications received by MHT after June 30, 2004.

The rehabilitation of a structure that received approval by the MHT on or before February 1, 2001, is subject to the provisions of the law in effect prior to the 2002 legislative changes.

The MHT will not accept applications for the approval of plans for commercial rehabilitations if a substantial part of the work has been completed if the applicant has already submitted three or more applications for a combined total of more than $500,000 in that year.

The total amount of credits approved by MHT for properties located in certain areas of the state during each fiscal year is subject to certain limitations.

A pro-rated percentage of the credit is subject to recapture if disqualifying work is performed during a five-year period, beginning with the year in which the certified rehabilitation was completed.

Contact:

Maryland Historical Trust
100 Community Place
Crownsville, MD 21032-2023
Phone: 410-514-7628

If you received a grant under Maryland's Residential Clean Energy Grant Program to install a qualifying solar energy system and the grant was reported to you on a 1099G form and included in your federal adjusted gross income, you may be able to subtract the grant amount from your taxable income on the Maryland income tax return. The subtraction amount cannot exceed your total income.

To claim the subtraction, enter the amount that was reported to you on a 1099G form on Maryland Form 502 and enter code letters "ee" in the code letter box.

The Residential Clean Energy Grant Program is administered by the Maryland Energy Administration and provides funding for a portion of the costs to install certain qualifying solar energy systems.

Grants are allocated on a first come/ first served basis across technologies and are subject to changes in amount and existence based on funding availability.

For more information on clean energy grants, contact:

Maryland Energy Administration
1800 Washington Blvd, Suite 755
Baltimore, MD 21230
Telephone: 410-537-4000
E-mail: cegp.mea@maryland.gov

If you and your spouse have taxable income and are filing a joint federal return, you may be able to subtract up to $1,200, or the income of the spouse with the lower income (whichever is less) on your Maryland income tax return.

The benefit is available only on the Maryland return and it applies to wages, pensions or business income.

You should enter the subtraction amount on line 14 of Form 502. The following worksheet from Instruction 13, Line 14 of the Maryland tax booklet will help you calculate the subtraction.

Two-Income Married Couple Subtraction Worksheet
  (a) You (b) Your Spouse
1. ENTER the portion of federal adjusted gross income from line 1 of Form 502 attributable to each spouse.    
2. ENTER the portion of additions to income from line 6 of Form 502 attributable to each spouse.    
3. ADD lines 1 and 2    
4. ENTER the portion of subtractions from income from lines 8-13 of Form 502 attributable to each spouse    
5. SUBTRACT line 4 from line 3    
6. COMPARE the amounts on lines 5 (a) and (b) and enter the smaller amount here but not less than zero.    
7. ENTER $1,200 or the amount on line 6, whichever is less. ENTER this amount on line 14 of Form 502.    

You may be eligible to claim some valuable personal income tax credits available on your Maryland tax return.

The following list contains general information about some of the most commonly used credits. You may want to consult with a tax professional to review specific requirements. Some of these credits contain carryover or recapture provisions and, in some cases, you may have to seek certification from another state agency. For more information, see Form 502CR

State Department of Assessments and Taxation Credits

Tax Credits for Homeowners and Renters

If you purchase a long-term care insurance contract for yourself or certain members of your family, you may be eligible for a one-time credit of up to $500 for each insured.

Qualifications

To qualify for the credit, the insured must be all of the following:

  • A spouse, parent, stepparent, child or stepchild.
  • A Maryland resident.
  • Not covered by long-term care insurance before July 1, 2000.
  • Not claimed the credit for the insured by another taxpayer this year.
  • Not claimed the credit for the insured by anyone in any other tax year.

For the current tax year, you can claim a credit equal to the premiums paid, up to a maximum of $420 for each insured person 40 years of age or younger, and up to a maximum of $500 for each insured person 41 or older.

This tax credit must not have been claimed for the insured by another taxpayer in this year or anyone else in any other tax year. If the credit exceeds the tax liability, the unused credit may not be carried forward to any other tax year.

Claiming the credit

To claim the credit, you must complete Part E of Form 502CR, and attach it with your Maryland Income Tax Return (Form 502, 505 or 515). 

If you are a qualified teacher, you may be able to claim a credit against your State tax liability for tuition paid to take graduate-level courses required to maintain certification. This credit applies to individuals who:

  • Currently hold a standard professional certificate or an advanced professional certificate;
  • Are employed by a county/city board of education in Maryland, a state or local correctional facility, or a juvenile correctional facility as listed below in the note;
  • Teach in a public school or qualified facility and receive a satisfactory performance;
  • Successfully complete the graduate courses with a grade of B or better; and
  • Have not been fully reimbursed by the state/county/city for these expenses.

Note: Qualified juvenile facilities are: the Alfred D. Noyes Children's Center; the Baltimore City Juvenile Justice Center; the Charles H. Hickey, Jr. School; the Cheltenham Youth Facility; the J. DeWeese Carter Center; the Lower Eastern Shore Children's Center; the Thomas J.S. Waxter Children's Center; the Victor Cullen Center; the Western Maryland's Children's Center; and the youth centers.

Only the unreimbursed portion qualified for the credit. The courses taken must be required to maintain certification and the cost of the courses must exceed any amount reimbursed by the county or Baltimore City.

The maximum amount of credit allowed is $1,500 for each qualifying individual. The credit is limited to the amount paid, less any reimbursement, up to the maximum allowed credit. See Page 3 of the Instructions for Form 502CR to learn how to calculate the credit. Each spouse that qualifies may claim this credit. Complete a separate column on Form 502CR Part C for each spouse.

The credit can be claimed on Maryland forms 502, 505 or 515

If the credit exceeds your tax liability, the unused credit may not be carried forward to any other tax year.

If you qualify for the federal earned income tax credit and claim it on your federal return, you may be entitled to a Maryland earned income tax credit on the state return equal to 50% of the federal tax credit. However, If you do not meet the minimum age requirement under the federal credit and are otherwise eligible for the federal credit for those without a qualifying child, you may claim the state earned income tax credit (calculate federal earned income credit disregarding the minimum age requirement). The Maryland earned income tax credit (EITC) will either reduce or eliminate the amount of the state and local income tax that you owe.

For tax year 2019, the earned income tax credit is allowed if you meet the following conditions:

  • You have three or more qualifying children and you earn less than $50,162 ($55,952 if married filing jointly).
  • You have two qualifying children and you earn less than $46,703 ($52,493 if married filing jointly).
  • You have one qualifying child and you earn less than $41,094 ($46,884 if married filing jointly).
  • You do not have a qualifying child and you earn less than $15,570 ($21,370 if married filing jointly).

To calculate the amount of your tax credit, complete the State Earned Income Credit Worksheet included in Instruction 18 of the Maryland tax booklet.

If you are a Maryland resident, you may qualify for the Maryland earned income tax credit even if you're not required to file a Maryland tax return. For tax years beginning after 12/31/2014, nonresidents may no longer claim any earned income credit.

Refundable Earned Income Tax Credit

If the earned income tax credit exceeds your Maryland tax liability, you may be entitled to a refund. Complete the Refundable Earned Income Credit Worksheet (21A) in Instruction 21 of the resident tax booklet.

For tax year 2019, the refundable earned income credit is calculated as 28% of your federal earned income credit, less your state income tax liability. If this amount is zero or less, no refund is due. The refundable amount of the credit may not be carried forward to any other tax year.

Local Earned Income Tax Credit

If you are a Maryland resident who qualifies for the state earned income credit, you may also qualify for a local earned income tax credit. Complete the Local Earned Income Credit Worksheet (19B) included in Instruction 19 of the tax booklet. The unused local income tax credit may not be refunded or carried forward to any other tax year.

Nonresidents, Part-Year Residents

Part-year residents must prorate their earned income credits on Form 502, based on the ratio of Maryland adjusted gross income to federal adjusted gross income. For tax years beginning after 12/31/2014, nonresidents may no longer claim any earned income credit.

Free Tax Preparation

Free tax preparation services are available at Volunteer Income Tax Assistance (VITA) sites to help low- and moderate-income taxpayers file their federal and Maryland income tax returns free of charge. Trained volunteers will prepare your returns, make sure you claim all the tax credits to which you are entitled, and even file your returns electronically - for free.

To find a VITA site in your area, call 410-685-0525 or 1-800-492-0618. Hearing impaired individuals can call TTY 410-685-2159. When calling, please indicate if you plan to file for a prior tax year.

Additionally, if you earned less than $56,000, you may qualify for free tax preparation through the CASH Campaign of Maryland. You can call 1-800-492-0618 for more information.

Maryland Taxpayer Service Offices

In addition, if you bring a completed copy of your federal return and all related documents to any of our taxpayer service offices, we will complete your Maryland income tax return and even file it electronically for you for free. Our offices are open Monday - Friday, 8:30 a.m. - 4:30 p.m.

Helpful Resources

Maryland provides two separate tax benefits for child or dependent care costs: a subtraction that reduces your taxable income and a tax credit that reduces the amount of tax you owe.

Subtraction

The state subtraction benefit, which is claimed on Form 502, reduces your taxable income. If you have eligible child or dependent care expenses, first determine your federal tax credit by completing the calculation on federal Form 2441. Transfer the amount of child or dependent care expenses (not the federal tax credit) claimed on line 6 of the federal form to line 9 of Maryland Form 502. You can subtract actual expenses up to the legal maximums of $3,000 for one child or $6,000 for two or more children.

Tax credit

The tax credit, which is claimed on Form 502CR, reduces the amount of tax you owe. If you were eligible for a child and dependent care credit on your federal income tax return, you may be entitled to a tax credit on your Maryland income tax return.

The tax credit does not affect the treatment or eligibility of the state tax subtraction for child care costs.

For more information about the tax credit, see Child and Dependent Care Tax Credit below

If you were eligible for a Child and Dependent Care Credit on your federal income tax return, Form 1040 or 1040A for the tax year, you may be entitled to a credit on your Maryland state income tax return. The credit starts at 32.5% of the federal credit allowed, but is phased out for taxpayers with federal adjusted gross incomes above $41,000 ($20,500 for individuals who are married, but file separate income tax returns). No credit is allowed for an individual whose federal adjusted gross income exceeds $50,000 ($25,000 for married filing separately). This credit is in addition to the subtraction modification available on the Maryland return for child and dependent care expenses.(See above)

To claim the credit, you must complete Part B of Form 502CR and submit with your Maryland income tax return. You must report the credit on Maryland Form 502, 505 or 515.

You can use the tables below to determine the percentage of the federal credit that can be claimed on your Maryland return:

  • Find the correct decimal amount that applies to your FAGI in the appropriate table.
  • Multiply your FAGI by the decimal amount.
  • Complete your Maryland return through the line labeled "Maryland Tax."
  • Complete Form 502CR, following the instructions provided.
  • Submit your completed Form 502CR with your Maryland return.

If the credit is more than your tax liability, the unused credit may not be carried forward to another tax year.

CREDIT FOR CHILD AND DEPENDENT CARE EXPENSES CHART

If your filing status is Married Filing Separately and your federal adjusted gross income is: Decimal Amount For all other filing statuses, if your federal adjusted gross income is:
At least But less than   At least But less than
$0 $20,501 .3250 $0 $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

The Student Loan Debt Relief Tax Credit may be claimed on Form 502CR by certain qualified taxpayers in the amount certified by the Maryland Higher Education Commission. Note: A copy of the required certification from the Maryland Higher Education Commission must be included with Form 502CR. "Qualified Taxpayer" means an individual who has incurred at least $20,000 in undergraduate student loan debt and has at least $5,000 in outstanding undergraduate student loan debt when submitting an application for certification to the Maryland Higher Education Commission. The amount of any tax credit approved by the Maryland Higher Education Commission may not exceed $5,000. The refundable tax credit must be claimed against the State income tax for the taxable year in which the Maryland Higher Education Commission certifies the tax credit. Individuals applying for certification should submit an application to the Maryland Higher Education Commission by September 15th of each year. The Maryland Higher Education Commission shall prioritize tax credit recipients and amounts based on qualified taxpayers who:

    (1)
  1. Have higher debt burden to income ratios;

  2. (2)
  3. Graduated from an institution of higher education located in Maryland;

  4. (3)
  5. Did not receive a tax credit in a prior year; or

  6. (4)
  7. Were eligible for in-state tuition.

The credit shall be recaptured if the individual does not use the credit approved under this section for the repayment of the individual's undergraduate or graduate student loan debt within 2 years from the close of the taxable year for which the credit is claimed. The individual who claimed the credit shall pay the total amount of the credit claimed as taxes payable to the State for the taxable year in which the event requiring recapture of the credit occurs.

For more information contact:

Maryland Higher Education Commission
6 North Liberty Street
Baltimore, MD 21201
Phone: (410) 767-4859 or (800) 974-0203
mhec.maryland.gov

Individuals who hunt and harvest an antlerless deer in compliance with State hunting laws and regulations, and donate the processed meat to a venison donation program administered by a qualified tax exempt organization, may claim a credit against their State personal income tax for up to $50 of qualified expenses to butcher and process an antlerless deer for human consumption. The total amount of the credits may not exceed $200 in any taxable year unless the individual harvested each deer in accordance with a deer management permit.

Any unused portion of the qualified expenses may not be carried over to another taxable year.

To claim the credit, you must complete Part G of Form 502CR and attach to your Maryland income tax return. You must also report the credit on Maryland Form 502, 505 or 515.

An individual may claim a credit against their Maryland State income tax equal to 50% of the qualified expenses incurred during a taxable year to install accessibility and universal visitability features to or within a home.

"Accessibility and universal visitability features" means components of renovation to an existing home that improves access to or within the home for individuals with disabilities. "Qualified expenses" means costs incurred to install accessibility and universal visitability features to or within a home.

For any taxable year, the credit may not exceed the lesser of: (i) $5,000; or (ii) the State income tax imposed for the taxable year calculated before the application of the credits allowed under §§ 10-701, 10-701.1, and 10-741 of the Tax-General Article but after the application of any other credit allowed. The unused amount of the credit may not be carried over to any other taxable year. The credit amount is limited to the lesser of the individual's state tax liability for that year or the maximum allowable credit of $5,000.

The qualified expenses incurred must be certified by the Maryland Department of Housing and Community Development. To claim the credit, an individual shall: (i) file an amended income tax return for the taxable year in which the qualified expenses were incurred; and (ii) attach a copy of the Maryland Department of Housing and Community Development's certification of the approved credit amount to the amended income tax return.

To claim the credit, you must complete Part K of Form 502CR and attach to your Maryland income tax return. You must also report the credit on Maryland Form 502, 505 or 515.

For more information, contact:

Maryland Department of Housing and Community Development
7800 Harkins Road
Lanham, Md. 20706
301-429-7400
dhcd.maryland.gov/Pages/Contact-Us.aspx
customerservice.dhcd@maryland.gov

If you are a qualified licensed physician or a qualified nurse practitioner who served without compensation as a preceptor, you may be eligible to claim a nonrefundable credit against your State tax liability. There are two credits for qualified preceptors. The first credit on line 1 of Part J on Form 502CR is only available for licensed physicians. The second credit on line 2 of Part J on Form 502CR is available for both licensed physicians and nurse practitioners.

A licensed physician who served as a physician preceptor in a preceptorship program authorized by an accredited medical school in Maryland may claim a credit on line 1 of Part J on Form 502CR in the amount of $1,000 for each student for whom the licensed physician served as a physician preceptor without compensation. For purposes of claiming the credit on line 1 of Part J on Form 502CR, "preceptorship program" means an organized system of clinical experience that, for the purpose of attaining specified learning objectives, pairs an enrolled student of a liaison committee on medical education-accredited medical school in Maryland or an individual in a postgraduate medical training program in Maryland with a licensed physician who meets the qualifications as a preceptor. To qualify for the credit, the licensed physician must have worked in an area of Maryland identified as having a health care workforce shortage by the Maryland Department of Health (MDH). The licensed physician must have worked a minimum of three rotations, each consisting of 160 hours of community-based clinical training. The amount of this credit may not exceed $10,000.

A nurse practitioner or licensed physician who served as a preceptor in a preceptorship program approved by the Maryland Board of Nursing may claim a credit on line 2 of Part J on Form 502CR in the amount of $1,000 for each nurse practitioner student for whom the nurse practitioner or licensed physician served as a preceptor without compensation. For purposes of claiming the credit on line 2 of Part J on Form 502CR, "preceptorship program" means an organized system of clinical experience that, for the purpose of attaining specified learning objectives, pairs a nurse practitioner student enrolled in a nursing education program that is recognized by the Maryland Board of Nursing with a nurse practitioner or licensed physician who meets the qualifications as a preceptor. To qualify for the credit, a nurse practitioner or licensed physician must have worked in an area of Maryland identified as having a health care workforce shortage by the Maryland Department of Health. The nurse practitioner or licensed physician must have worked a minimum of three rotations, each consisting of at least 100 hours of community-based clinical training. The amount of this credit may not exceed $10,000.

NOTE: A copy of the required certification from the Maryland Department of Health must be included with Form 502CR.

Eligibility for these credits is limited to funds budgeted. Applicants seeking certification will be approved on a first-come, first-served basis. Go to the Maryland Department of Health website at health.maryland.gov for more information.

A taxpayer who makes a donation to a qualified permanent endowment fund at an eligible community foundation may be eligible for a credit against the Maryland State income tax. The taxpayer must apply to the Maryland Department of Housing and Community Development (DHCD) for a certification for the donation. This certification must be attached to the Form 502CR at the time the Maryland income tax return is filed.

Individuals who are eligible to claim the Endow Maryland income tax credit, and who are not PTE members may elect to claim this credit on Part I of Form 502CR, instead of claiming the credit on Form 500CR. However, an individual may not claim this credit on both Form 500CR and Form 502CR. PTE members who are eligible for this credit must claim the credit on Business Income Tax Credit Form 500CR.

Individuals who anticipate having a carryover of the Endow Maryland income tax credit are advised to use Form 500CR, instead of Form 502CR.

The credit is limited to 25% of the approved donation (in cash or publicly traded securities) not to exceed $50,000.

NOTE: A copy of the required approval from the DHCD must be included with Form 502CR.

This credit is not refundable and is applied only against the Maryland State income tax. To the extent the credit is earned in any year and it exceeds the State income tax, you are entitled to an excess carryover of the credit until it is used, or it expires five years after the credit was earned, whichever comes first.

NOTE: The amount of donation shown on line 2 of Part I on Form 502CR requires an addition to income. See Instruction 12 in the Maryland Resident Instruction Booklet.

For more information contact:
Department of Housing and Community Development
Division of Neighborhood Revitalization
2 N. Charles St., Suite
Baltimore, MD 21202
410-209-5800

Email: endowmaryland.nr@maryland.gov

Donors that make a donation to a qualified permanent endowment fund held at an eligible institution of higher education may be eligible for a credit against the Maryland State income tax. The tax credit terminates December 31, 2023.

To qualify for the credit

Cash donations made by the taxpayer to a qualified permanent endowment fund that meet certain requirements are eligible for tax credits. Donations must be made to a qualifying fund at any of the following institutions: Bowie State University, Coppin State University, Morgan State University, or University of Maryland Eastern Shore. In each tax year, the Comptroller may award a maximum of $60,000 in tax credits to each of the four institutions.

How the credit is calculated

The credit is 25% of the value of a proposed donation to a qualified permanent endowment fund. The donor must apply to the Comptroller of Maryland for a certification of the donation.

Credit application procedure

Donors seeking the tax credit must apply to the Comptroller for a tax credit certificate in the calendar year that the donation is made.

Applications must be sent by e-mail and are approved on a first-come, first-serve basis until the maximum amount of authorized credits have been approved.

For tax year 2019, the HBCU Tax Credit Application will be accepted beginning July 1, 2019 at 8 a.m.

An acknowledgement letter is issued when an application for the proposed donation is received. Donors are required to submit documentation from the institution showing proof of donation within 30 days before a final tax credit certificate is issued.

Where to send applications

Applications are accepted by e-mail only; and should be sent to HBCUtaxinfo@marylandtaxes.gov

All fields on the application are required to be completed fully. Incomplete applications will not be processed.

How the credit is claimed

Donors claim the credit by including the certification at the time the Maryland income tax return is filed. Individuals that are eligible to claim the income tax credit and are not PTE members may elect to claim the credit using Form 502CR, instead of Form 500CR. However, a donor may not claim the credit on both Form 500CR and Form 502CR. PTE members that are eligible for the credit must claim it on the Business Income Tax Credit Form 500CR. Corporations and Fiduciaries that are eligible to claim the credit must use Form 500CR to do so.

A taxpayer claiming the credit is required to add back the amount of the credit claimed to Maryland adjusted gross income or Maryland modified income, to the extent excluded from federal adjusted gross income.

Contact

Comptroller of Maryland

HBCU Tax Credit Office

HBCUtaxinfo@marylandtaxes.gov

Businesses or individuals who contribute to approved Community Investment Programs may be eligible for a credit against the Maryland State income tax. Contributions must be made to a nonprofit organization approved by the Department of Housing and Community Development (DHCD). The taxpayer must apply to and receive approval by the DHCD for each contribution for which a credit is claimed.

Individuals who are eligible to claim the Community Investment Tax Credit (CITC), and who are not PTE members may elect to claim this credit on Part H of Form 502CR, instead of claiming the credit on Form 500CR. However, an individual may not claim this credit on both Form 500CR and Form 502CR. PTE members who are eligible for this credit must claim the credit on Business Income Tax Credit Form 500CR.

Individuals who anticipate having a carryover of the CITC are advised to use Form 500CR instead of Form 502CR. Individuals who have an existing carryover on their 2017 Form 500CR may elect to use Form 502CR if their Excess Carryover Credit is attributable only to the CITC.

The credit is limited to 50% of the approved contributions (including real property) not to exceed $250,000.

NOTE: A copy of the required approval from the DHCD must be included with Form 502CR.

This credit is not refundable and is applied only against the Maryland State income tax. To the extent the credit is earned in any year and it exceeds the State income tax, you are entitled to an excess carryover of the credit until it is used or it expires five years after the credit was earned, whichever comes first.

For more information contact:
Department of Housing and Community Development
Division of Neighborhood Revitalization
2 N. Charles St., Suite
Baltimore, MD 21202
410-209-5800
citc.nr@mdhousing.org

Business Tax Credits

Businesses in Maryland may be able to take advantage of several tax credits. At the bottom of the page are links to the details of each tax credit.

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.

Businesses or individuals who operate an Aerospace, Electronics, or Defense Contract Tax Credit Project may be eligible for an income tax credit. The income tax credit is based on the number of qualified positions created or retained for an Aerospace, Electronics, or Defense Contract Tax Credit Project. The maximum credit amount is $2,500,000 per Aerospace, Electronics, or Defense Contract Tax Credit Project.

To qualify for the tax credit, the individual or business must be a qualified business entity. A qualified business entity is an individual or business conducting or operating a for-profit trade or business in Maryland that is certified by the Maryland Department of Commerce as qualifying for the income tax credit. A government entity does not qualify for the Aerospace, Electronics, or Defense Contract Tax Credit.

A business entity operating a project must create or retain at least 10,000 qualified positions in Maryland and submit a budget evidencing the business entity will expend at least $25,000,000 in qualifying expenditures in Maryland during the credit year for the project to be certified by the Maryland Department of Commerce as an Aerospace, Electronics, or Defense Contract Tax Credit Project. A qualified business entity may receive up to three designations for Aerospace, Electronics, or Defense Contract Tax Credit Projects in a fiscal year.

A qualified position is a full-time position of indefinite duration with an annual salary of at least $85,000, including associated benefits, is located in Maryland, is created or retained as a result of the Aerospace, Electronics, or Defense Contract Tax Credit Project of the qualified business entity and is filled. A qualified position does not include a position that is filled for a period of less than 12 months.

Qualified expenditures are capital expenditures that have been expended or will be expended by a qualified business entity and that the Maryland Department of Commerce determines have met the requirements for an Aerospace, Electronics, or Defense Contract Tax Credit Project.

For questions on application and certification processes or for additional information on this credit program, contact:


Maryland Department of Commerce
Office of Finance Programs, Tax Incentives Group
401 E. Pratt St.
Baltimore, MD 21202
410-767-6438

Certain taxpayers may be eligible for an income tax credit for the first year of employment of eligible apprentices. The income tax credit is based on the number of eligible apprentices employed by the taxpayer.

"Eligible apprentice" means an individual who is enrolled in an apprenticeship program registered with the Maryland Apprenticeship and Training Council. Eligible apprentices must have been employed by the taxpayer for at least 7 full months of the taxable year.

General Requirements A credit is available for an investment in a qualified Maryland biotechnology company (QMBC). To qualify, a company can be any entity of any form (except a sole proprietorship) that is duly organized and existing under the laws of any jurisdiction for the purpose of conducting business for profit, and must be primarily engaged in, or within 2 months will be primarily engaged in, the research, development, or commercialization of innovative and proprietary technology that comprises, interacts with, or analyzes biological material including biomolecules (DNA, RNA, or protein), cells, tissues or organs.

See Form 500CR Instructions for requirements and recapture information.

Qualified investors must contribute at least $25,000 in cash or cash-equivalent to a QMBC that is certified by the Maryland Department of Commerce (DOC).

A QMBC must:

  • Have its headquarters and base of operations in Maryland;
  • Have fewer than 50 full-time employees;
  • Have been in active business for no longer than 10 years from the date it received its first qualified investment; and
  • Not have any securities publicly traded companion any exchange
A QMBC may include a company that has been an active business for up to 12 years, with DOC approval.

Qualified investors are also required to file an income tax return. Credits may be claimed for no more than $250,000 per investment in a qualified biotechnology company, or $500,000 if the company is located in Allegany, Dorchester, Garrett, or Somerset Counties. DOC may not certify tax credits for investments in a single qualified biotechnology company that are in the aggregate more than 15% of the total amount appropriated to the Maryland Biotechnology Investment Tax Credit Reserve Fund for that fiscal year. DOC may not issue initial credit certificates in excess of the amount appropriated to the Reserve Fund for that fiscal year in the state budget as approved by the General Assembly.

At least 30 days before making an investment, the business must submit an initial credit certificate application to DOC. Upon approval (within 30 days of DOC's receipt of the application), the applicant will receive an initial credit certificate stating the amount of the tax credit and will have 30 days to make the investment. Within the following 10 days, the investor must notify DOC that the investment has been made. A final credit certificate will be issued to the applicant stating the amount of the tax credit to which the applicant is entitled. A copy of the final credit certificate must be filed with the taxpayer's income tax return.

The credit allowed is 50% of an eligible investment contributed during the tax year, not to exceed $250,000 ,or 75% of an eligible investment in a company located in Allegany, Dorchester, Garrett, or Somerset Counties, not to exceed $500,000. The amount in excess of the state tax liability may be refunded. The total amount of final tax credit certificates issued by DOC each year is limited to the amount appropriated to the Reserve Fund in the State budget. Applications are reviewed and approved on a first come, first served basis.

For taxable years beginning after December 31, 2012, this credit is available only with an electronically filed return. A copy of the certification issued by DOC must be included with the electronic return, and the Form 500CR section of the return must be completed.

Exception: Should a fiduciary become eligible to claim this credit (the fiduciary may be a member of a pass-through entity eligible to pass on the Biotechnology Investment Incentive Tax Credit to its members), the fiduciary will use Business Tax Credit Form for a Fiduciary, Form 504CR, as an electronic version of Fiduciary Income Tax Form 504 does not currently exist. A fiduciary may distribute the tax credit to its beneficiaries using Maryland Schedule K-1(504). A copy of the certification issued by DOC must be included with any Form 504CR filed.

However, beneficiaries receiving this tax credit from a fiduciary, must file electronically to claim a business tax credit unless the beneficiary happens to be a fiduciary taxpayer.

Maryland Department of Commerce
Office of Finance Programs, Tax Incentives Group
401 E. Pratt Street
Baltimore, MD 21202
Phone: 410-767-6438 or 410-767-7234 or 1-877-821-0099
Businesses located in Maryland that create new positions and establish or expand business facilities in the state may be entitled to a tax credit. To be eligible for the tax credit, businesses must first have been granted a property tax credit by a local government of Maryland for creating the new jobs.

The credit may be taken against corporate income tax, personal income tax or insurance premiums tax. The credit may be applied to only one of these tax types in addition to the property tax.

Sole proprietorships, corporations and pass-through entities, such as partnerships, subchapter S corporations, limited liability companies and business trusts may claim the tax credit.

The business must create at least 25 new positions as part of the new or expanded business facility in Maryland (5,000 square feet or more). Businesses located in smaller counties (population of 30,000 or less) must create at least 10 new positions.

An enhanced credit is instead available for businesses that create or expand a new business facility in Maryland of 250,000 square feet or more and:

  1. Continue to employ 2,500 employees and create 500 new positions that pay at least 150% of the minimum wage; or
  2. Create 1,250 new positions that are paid at least 150% of the minimum wage.
In Montgomery County only, a business can:
  1. Spend at least $150 million to obtain at least 700,000 square feet of new or expanded business premises through the purchase, construction, or lease of a new premises; and
  2. Employ at least 1,100 individuals including at least 500 new, permanent full-time positions. All of the positions must receive employer-provided subsidized health care benefits, be paid at least 150% of the minimum wage, and be located in or neighboring the new, expanded or renovated premises.
The new positions must be:
  1. Located in Maryland
  2. Part of the new or expanded business facility in Maryland
  3. Permanent
  4. Full time of indefinite duration. In Montgomery County and Washington County for tax years 2007 and later, the position can be a contract position of definite duration lasting at least 12 months with an unlimited renewal option; and
  5. Filled for at least one year
The business must then apply for and receive certification for a property tax credit from the local government in which the facility is located.
The county or city government will notify the State Department of Assessments and Taxation (SDAT) that the property tax credit has been approved. SDAT will calculate and certify the amount of the allowable tax credit to the Comptroller.

The credits are calculated as a percentage of the local property tax liability on the new or expanded portion of the facility. Those percentages are as follows:

Property Tax Credit:

  • 1st and 2nd taxable years: 52%
  • 3rd and 4th taxable years: 39%
  • 5th and 6th taxable years: 26%
  • Remaining taxable years: 0%
Credit against the personal or corporate income tax, or the insurance premiums tax:
  • 1st and 2nd taxable years: 28%
  • 3rd and 4th taxable years: 21%
  • 5th and 6th taxable years: 14%
  • Remaining taxable years: 0%
The enhanced property tax credit is a flat percentage of 58.5% for the local property tax credit and 31.5% for the state tax credit in each of the first 24 tax years.

If the credit is more than the state tax liability, the unused credit may be carried forward for the next five (5) taxable years.

If, at any time during the three tax years after the year the credit was earned, the business fails to satisfy the thresholds to qualify for the credit, the credit must be recaptured. The income tax credit to be recaptured is reported on line 26, Part W in the Form 500CR section of the return and filed with the tax return for the tax year in which the business failed to satisfy the applicable thresholds.

For taxable years beginning after December 31, 2012, this credit is available only with an electronically filed return. A copy of the certification issued by the local government must be included with the electronic return and the Form 500CR section of the return must be completed.

Documentation of the credit shall be maintained by the taxpayer in their files and be made available to the Insurance Commissioner, on request, in accordance with COMAR 31.06.04.03. The documentation should include documents from the agency granting the credit, and a list of the names and telephone numbers for the taxpayer's staff who are directly involved in granting the credits. All information shall be retained for a minimum of three years from the date of the filing of the final tax return on which the credit is taken.

State Department of Assessments and Taxation
301 W. Preston Street
Baltimore, MD 21201-2395
Phone: 410-767-1191
E-mail: taxcredits@dat.state.md.us
Businesses that incur qualified research and development expenses for cellulosic ethanol technology in Maryland are entitled to a tax credit. The total credits for all businesses may not exceed $250,000 per year.

This credit is available for tax years beginning after December 31, 2007, but before January 1, 2017.

The credit may be taken against corporate income tax or personal income tax. Sole proprietorships, corporations and pass through entities, such as partnerships, subchapter S corporations, limited liability companies and business trusts may claim the tax credit.
The business must invest in research and development activities in Maryland related to cellulosic ethanol technology, which is technology that is used to develop cellulosic biomass for conversion to ethanol fuel. The business must also submit an application for the credit to the Maryland Department of Commerce (DOC) by September 15 of the calendar year following the end of the tax year in which the qualified research and development expenses were paid or incurred. DOC will certify the amount of the allowable credit to the business by December 15.
The amount of the tax credit is equal to 10% of the qualified research and development expenses paid or incurred during the tax year.

DOC may not approve more than $250,000 in credits for any calendar year. If the aggregate amount of credits applied for exceeds $250,000, each applicant will receive a prorated share of the total credit amount.

If the credit is more than the state tax liability, the unused credit may be carried forward for the next 15 years.
For taxable years beginning after December 31, 2012, this credit is available only with an electronically-filed amended income tax return for the tax year in which the qualified R&D expenses were paid or incurred. A copy of the certification issued by DOC must be included with the electronic return, and the Form 500CR section of the return must be completed.
Maryland Department of Commerce
Office of Finance Programs, Tax Incentives Group
401 East Pratt Street
Baltimore, MD 21202
Phone: 410-767-6438 or 410-767-7234 or 1-877-821-0099

Businesses that use a qualified energy resource to produce electricity that is sold to an unrelated person may be entitled to an income tax credit.

Sole proprietorships, corporations and pass-through entities, such as partnerships, subchapter S corporations, limited liability companies and business trusts may claim the tax credit.

This credit is allowed if a Maryland facility is originally placed in service or initially began co-firing, during the period of January 1, 2006 through December 31, 2018 and produces electricity during the tax year primarily using qualified energy resources derived from:

  • Wind
  • Open-Loop and Closed-Loop Biomass, including:
    • Any non-hazardous waste material that is segregated from other waste materials and is derived from any of the following forest-related resources:
      Mill residues, forest thinnings, slash, brush, waste pallets, crates, and dunnage and landscape or right-of-way trimmings
    • Agricultural sources, including but not limited to, orchard tree crops, vineyard grain, sugar, and other crop by-products and residues.
    • Methane gas or other combustible gases resulting from the decomposition of organic materials from an agricultural operation or from a landfill or a wastewater treatment plant using one, or a combination, of anaerobic decomposition or thermal decomposition.
    • Biomass facilities may NOT use old growth timber, or mill residues consisting of sawdust or wood shavings.
  • Geothermal Energy
  • Solar Energy
  • Small Irrigation Power
  • Municipal Solid Waste
  • Qualified Hydropower

The business must apply for and receive an initial credit certificate from the Maryland Energy Administration (MEA) before claiming this credit. The initial credit certificate must state the amount of electricity the taxpayer expects to produce in a qualified Maryland facility over a five-year period. The total amount of the credit specified in the initial credit certificate cannot exceed $2.5 million and must be a minimum of $1,000.

Note: MEA is prohibited from issuing initial credit certificates after December 31, 2018.

The credit is $0.0085 (85/100 of one cent) for each kilowatt hour (or 85 cents for every 100 kilowatt hours) of electricity produced at a Maryland facility using qualified energy resources during the five-year period specified in the initial credit certification.

The annual tax credit may not exceed one-fifth (1/5) of the maximum amount of credit stated in the initial credit certificate.If the credit is more than the state tax liability, the excess credit may be refunded.

The MEA cannot issue an initial credit certificates after December 31, 2015, and may not issue an initial credit certificate for a credit amount less than $1,000.

For taxable years beginning after December 31, 2012, this credit is available only on an electronically-filed income tax return for the tax year in which the credit is being claimed. A copy of the initial credit certificate issued by the MEA must be included with the electronic return, and the Form 500CR section of the return must be completed.

Maryland Energy Administration
1800 Washington Blvd, Suite 755
Baltimore, MD 21230
Phone: 410-260-7207
E-mail: meainfo@energy.state.md.us

Businesses or individuals who contribute to qualified organizations' Community Investment Programs can earn credits for a portion of the value of the money, goods or real property contribution.

Community Investment Tax Credits (CITC) support nonprofit organizations serving as incentives to attract contributions from individuals and businesses to benefit local projects and services.

The credit may be taken against corporate income tax, personal income tax, insurance premiums tax or public service company franchise tax. However, the same credit may not be applied to more than one tax type.

Contributions of money, goods or real property worth $500 or more are eligible for tax credits. Contributions of services or labor are not eligible. Individuals and businesses may claim a maximum of $250,000 in credits per year, representing a contribution of no more than $500,000.

Contributions must be made to a nonprofit organization approved by the Department of Housing and Community Development (DHCD). The taxpayer must apply to and receive approval by the DHCD for each contribution for which a credit is claimed.

For any tax year, the sum of all CITCs, including any carryover credits, may not exceed the lesser of $250,000 or the total amount of tax otherwise payable by the individual and/or business for the tax year. Excess credits may be carried over for five (5) years.

The credit is 50% of the value of the approved donation. Each business or individual may claim a credit of up to $250,000. Businesses and individuals claim the CITC by filing an electronic tax return supporting Business Income Tax Credit Form 500CR. An electronic return must be filed to claim this credit against the Maryland income tax, for tax years beginning after December 31, 2012. See exception below.

Important Note: While many individuals claim this credit on Form 502, this is still a business tax credit. Taxpayers must file electronically to use Form 500CR. Prior to Tax Year 2015, this credit did not appear on Form 502CR.

Exception: Beginning 2015, individuals who are eligible to claim the Community Investment Tax Credit (CITC), and who are not PTE members may elect to claim this credit on Part H of Form 502CR, instead of claiming the credit on Form 500CR. Taxpayers electing to use Form 502CR to claim the CITC are not required to file their return electronically. However, an individual may not claim this credit on both Form 500CR and Form 502CR. PTE members who are eligible for this credit must claim the credit on Business Income Tax Credit Form 500CR.

Individuals who anticipate having a carryover of the CITC are advised to use Form 500CR instead of Form 502CR. Individuals who have an existing carryover on Part X of their 2014 Form 500CR may elect to use Form 502CR if their Excess Carryover Credit is attributable only to the CITC.

See Form 500CR Instructions for specific line-by-line instructions. Form 500CR must still be filed electronically.

A copy of the required approval from the DHCD must be attached to the appropriate electronic Maryland Income Tax Return - Form 500 for Corporations, Form 510 and Form 510 Schedule K-1 for Pass-Through Entities, and Form 502 for individuals, electing to use Form 500CR. The Form 500CR section of the electronic return must also be completed.

A copy of the required approval from the DHCD must be attached to Form 502 for those individuals, electing to use Form 502CR. Insurance premiums tax

The contributor and the non-profit partner must complete the Certification of Contribution for Tax Credit and submit it to the Maryland Department of Housing and Community Development along with a copy of the check or documentation of the value of donated goods. Businesses claiming the credit against this tax must include their North American Industry Classification System (NAICS) number in the space provided on that form.

Public service company franchise tax

Form AT3-74 must be submitted with the franchise tax return (SDAT Forms 11 or 11T).

Department of Housing and Community Development
Division of Neighborhood Revitalization
2 N. Charles St., Suite 450
Baltimore, MD 21202
Phone: 410-209-5800
E-mail:citc@mdhousing.org

Maryland employers, including organizations exempt from taxation under §501(c)(3) or (4) of the Internal Revenue Code, may claim a tax credit for a portion of the eligible costs of providing commuter benefits to participating employees.

The credit may be taken against corporate income tax, personal income tax, state and local taxes withheld (for tax-exempt organizations) or insurance premiums tax. The same credit may not, however, be applied to more than one tax type.

Sole proprietorships, corporations, tax-exempt nonprofit organizations and pass-through entities, such as partnerships, subchapter S corporations, limited liability companies and business trusts may claim the tax credit.

The credit is applicable to the following transit instruments: MTA passes, fare cards, smart cards or vouchers used by employees to ride publicly or privately owned transit systems except taxi services, company Vanpool programs, company guaranteed Ride Home programs, and company Cash in Lieu of Parking programs.

The employer must pay a portion of the cost of an employee's travel between the employee's home and workplace, including the purchase of transit instruments (tickets, passes, vouchers, fare cards, smart cards and tokens). In addition, the workplace must be located in Maryland and travel must take place in either:

  • A mass transit vehicle such as an MTA Bus, MTA Commuter Bus, MTA Light Rail, MARC Train, WMATA Metrobus, WMATA Metrorail, or other qualified mass transit system; or
  • A vanpool which can seat at least eight adults, is used primarily to transport individuals between home and the workplace.

In addition, a business may also qualify for a credit for a portion of the amount paid to provide their employees a Guaranteed Ride Home and/or a parking "Cash-Out" program.

The business entity may claim a tax credit in an amount equal to 50% of the cost of providing commuter benefits to the business entity's employees and may not exceed $100 per individual employee per month.

If the credit is more than the state tax liability, the unused credit may not be carried forward to any other tax year.

A tax-exempt organization may estimate the amount of the tax credit for qualifying employees for the tax year. The total amount of the estimated credit should be divided evenly over the number of periods for filing withholding returns (Form MW506). For example, if quarterly returns are required, then the total estimated credit should be divided by four. Each payment to the Comptroller would be reduced by the pro rata amount of the credit.

Alternatively, the tax-exempt organization could apply the credit against the tax on unrelated business taxable income.

For taxable years beginning after December 31, 2012, the income tax credit is available only on an electronically-filed income tax return for the tax year in which the credit is being claimed. The Form 500CR section of the return must be completed.

Insurance premiums tax: Documentation of the credit shall be maintained by the taxpayer in their files and be made available to the Insurance Commissioner, on request, in accordance with COMAR 31.06.04.03. The documentation should include documents from the agency granting the credit and a list of the names and telephone numbers for the taxpayer's staff who are directly involved in granting the credits. All information shall be retained for a minimum of three years from the date of the filing of the final tax return on which the credit is taken.

State and local income taxes withheld: Form MW508CR must be submitted with Form MW508, the Maryland Annual Employer Withholding Reconciliation Report to claim this credit against Maryland income tax withheld. If the tax-exempt entity is required to file the MW508 electronically, then MW508CR must be filed with an amended MW508A as the MW508CR is not available electronically at this time.

Click Here to be taken to ONLINE REGISTRATION FORM

The online registration form must be completed each time a business applies for the Commuter Tax Credit. Businesses must re-register for this tax credit annually.

For more information call 410-865-1100 or email CommuterChoice@mdot.maryland.gov

Visit: CommuterChoiceMaryland.com for more information

Refundable Credit for Investors in Cybersecurity (Part H-1 of Form 500CR)

A credit is available for an investment in a qualified Maryland cybersecurity company (QMCC). The credit is claimed by a qualified investor. A qualified investor is an individual or entity that invests at least $25,000 in a QMCC that is required to file an income tax return in any jurisdiction. To qualify, a QMCC can be an entity of any form (except a sole proprietorship) that is duly organized and existing under the laws of any jurisdiction (or formed within 4 months of receiving the investment) for the purpose of conducting business for profit, and must be engaged primarily in the development of innovative and proprietary cybersecurity technology.

The QMCC must:

  • Have its headquarters and base of operations in Maryland;
  • Have not participated in the tax credit program for more than 1 prior fiscal year;
  • Have an aggregate capitalization of at least $100,000;
  • Own or have properly licensed any proprietary technology;
  • Have fewer than 50 full-time employees
  • Not have any securities publicly traded on any exchange
  • Be in good standing;
  • Be current in the payment of all tax obligations to Maryland or any unit or subdivision of Maryland;
  • Not be in default under the terms of any contract with, indebtedness to, or grant from Maryland or any unit or subdivision of Maryland;
  • Meet any other requirements of the Maryland Department of Commerce evidencing that the QMCC is a going concern primarily engaged in the development of innovative and proprietary cybersecurity technology; and
  • Provide any other information the Maryland Department of Commerce may require.

The amount of the credit is 33% of the investment in the QMCC, not to exceed $250,000. For a QMCC located in Allegany County, Dorchester County, Garrett County, or Somerset County, the amount of the credit is 50% of the investment in the QMCC, not to exceed $500,000. The investment cannot include debt unless it is convertible debt. The investment must be the contribution of money in cash or cash equivalents expressed in United States dollars, at risk of loss, to a QMCC in exchange for stock, a partnership or membership interest, or any other ownership interest in the equity of the QMCC, title to which the ownership interest shall vest in the qualified investor. "Qualified investor" means an individual or entity that is required to file an income tax return in any jurisdiction and invests at least $25,000 in a QMCC. However, the qualified investor may not, after making the investment, own or control more than 25% of the equity interest in the QMCC. See § 10-733 of the Tax-General Article.

At least 30 days prior to making an investment in a QMCC, a qualified investor must submit an application to the Maryland Department of Commerce for an initial tax credit certificate.

At least 30 days prior to receiving an investment the QMCC must submit an application to the Maryland Department of Commerce to evidence that the QMCC has satisfied the minimum requirements for consideration as a QMCC.

For questions on application and certification processes or for additional information on this credit program, contact:

Maryland Department of Commerce
Office of Finance Programs, Tax Incentives Group
401 E. Pratt St.
Baltimore, MD 21202
410-767-6438

Based on the actual amount of the investment made by a qualified investor, the Maryland Department of Commerce will issue a final tax credit certificate to the qualified investor. The qualified investor may claim the tax credit for the amount provided in the final certificate. If the credit exceeds the tax due, then a refund for the excess amount may be claimed. The credit cannot be claimed until the date of issuance of the final certificate. It must be claimed on the Maryland income tax return for the tax year in which the investment is made in the QMCC.

A copy of the final certificate received from the Maryland Department of Commerce is required to be included with your return for the tax credit to be allowed. Complete Part H-I using the information provided in the final certificate and enter the amount of the approved investment on line 1.

On line 2, Part H-I, enter 33% of the approved investment. For a QMCC located in Allegany County, Dorchester County, Garrett County or Somerset County, enter 50% of the approved investment.

Line 3, Part H-I, reflects the maximum dollar amount of credit per investment. Enter $250,000. For a QMCC located in Allegany County, Dorchester County, Garrett County or Somerset County, enter $500,000.

On line 4, Part H-I, enter the lesser of line 2 or line 3.

On line 5, Part H-I, enter any applicable recapture amount. See more information below about recapture amounts.

On line 6, Part H-I, subtract line 5 from line 4. If the amount is less than zero, enter a negative amount.

Enter the amount from line 6, Part H-I, on line 7, Part CCC.

Note: If you are claiming a credit for more than one investment, another separate Part H-I must be completed for each investment.

Total the amounts from line 6 from each separate Part H-I. Using only one summary section, combine the total on line 7, Part CCC. To claim the total credit, you must complete a second Part H-I at the time you electronically file your income tax return.

The credit is subject to recapture if within 2 years of the close of the taxable year in which the credit is claimed; 1) the qualified investor sells, transfers or otherwise disposes of the ownership interest in the QMCC that gave rise to the credit; 2) the QMCC ceases operating as an active business or distributes the equity investment; 3) the QMCC is not duly organized and existing within 4 months of receiving the qualified investment. The applicable recapture amount is calculated by multiplying the total amount of the credit claimed (or in the case of a sale, transfer, or other disposition of the ownership interest, the portion of the credit attributable to the ownership interest disposed of), by one of the following percentages:

100%, if the event requiring recapture of the credit occurs during the tax year for which the tax credit is claimed;

67%, if the event requiring recapture of the credit occurs during the first year after the close of the tax year for which the tax credit is claimed; or

33%, if the event requiring recapture of the credit occurs more than 1 year but not more than 2 years after the close of the tax year for which the tax credit is claimed. The amount of recapture is entered onto line 5, Part H-I.

The credit may also be subject to a recapture if the certificate is rescinded by the Maryland Department of Commerce due to the qualified investor failing to provide the required notice to the Maryland Department of Commerce of having made the investment, or if the Maryland Department of Commerce revokes the final certification due to false representations made in connection with the application for the certification.

If the credit is claimed by a qualified investor that is a PTE, the members of the PTE may claim the distributive or pro rata shares of the credit amount subject to the $250,000 limitation (or $500,000 for a QMCC located in Allegany County, Dorchester County, Garrett County or Somerset County). A PTE that earned the Cybersecurity Incentive Tax Credit must electronically file the Maryland Form 510, Form 500CR and all other required attachments for members to be permitted to claim the credit. See Form 510 instructions.

For a member of the PTE to be allowed the credit, the member must complete the Form 500CR section of their electronically-filed Maryland return and include a copy of the final certification from the Maryland Department of Commerce and Maryland Schedule K-1 (510) showing the allocated share of the credit amount.

Nonrefundable Credit for Buyers of Cybersecurity Technology and/or Cybersecurity Services (Part H-II of Form 500CR)

A qualified buyer may claim a credit in an amount equal to 50% of the cost incurred during the taxable year to purchase cybersecurity technology and/or cybersecurity services from one or more qualified sellers. For any taxable year, the credit allowed may not exceed $50,000 for each qualified buyer, and the aggregate credits claimed for cybersecurity technology and/or cybersecurity services purchased from a single qualified seller may not exceed $200,000.

A "Qualified Buyer" means any entity that has fewer than 50 employees in the State and that is required to file an income tax return in the State.

A qualified buyer eligible for the credit may apply to the Maryland Department of Commerce for a credit certificate that states the amount of the credit the qualified buyer may claim. A qualified buyer must attach a copy of the credit certificate to the income tax return on which the qualified buyer claims the credit. The Maryland Department of Commerce approves each application that qualifies for a credit certificate.

A "Qualified Seller" means a cybersecurity business that:

  • Has its headquarters and base of operations in the State;
  • (i) Has less than $5,000,000 in annual revenue; (ii) Is a minority-owned, woman-owned, veteran-owned, or service-disabled-veteran-owned business; or (iii) Is located in a historically underutilized business zone designated by the United States Small Business Administration;
  • Owns or has properly licensed any proprietary cybersecurity technology; or provides cybersecurity service;
  • Is in good standing;
  • Is current in the payment of all tax obligations to the State or any unit or subdivision of the State; and
  • Is not in default under the terms of any contract with, indebtedness to, or grant from the State or any unit or subdivision of the State.
A "Cybersecurity Business" means an entity organized for profit that is engaged primarily in the development of innovative and proprietary cybersecurity technology or the provision of cybersecurity service.

A "cybersecurity service" is an activity that is associated with a category or subcategory identified under the framework core established by the National Institute of Standards and Technology's Cybersecurity Framework.

"Cybersecurity technology" means products or goods intended to detect or prevent activity intended to result in unauthorized access to, exfiltration of, manipulation of, or impairment to the integrity, confidentiality, or availability of an information system or information stored on or transiting an information system.

The Maryland Department of Commerce may revoke its certification of a credit if any representation made in connection with the application for the certification is determined by the Maryland Department of Commerce to have been false. The revocation may be in full or in part as the Maryland Department of Commerce may determine.
Maryland Department of Commerce
Abigail McKnight
Tax Specialist
Office of Finance Programs
401 E. Pratt Street, 17th Floor
Baltimore, MD 21202
410-767-7234
Abigail.mcknight@maryland.gov

An employer, including organizations exempt from taxation under §501(c)(3) or (4) of the Internal Revenue Code, that provides long-term care insurance as part of an employee benefit package may claim a credit for costs incurred during the taxable year.

The credit may be taken against corporate income tax, personal income tax, insurance premiums tax or public service company franchise tax. The same credit may not, however, be applied to more than one tax type.

Sole proprietorships, corporations and pass-through entities, such as partnerships, subchapter S corporations, limited liability companies and business trusts may claim the tax credit.

The company must provide long-term care insurance benefits to one or more employees during the taxable year as part of an employee benefits package.

The credit allowed is 5% of employer's cost which may not exceed the lesser of $5,000, or $100 for each employee in the State covered by long-term care insurance provided under the employee benefits package.

If the credit is more than the tax liability, the unused credit may be carried forward for the next five (5) tax years.

For taxable year beginning after December 31, 2012, taxpayers must file their income tax return electronically (Form 500 for Corporations, Form 510 and Form 510 Schedule K-1 for Pass-Through Entities, and Form 502 or 505 for Individuals). They must complete the Business Tax Credit Form 500CR section of the electronic return to claim this tax credit.

Insurance premium tax

:

Documentation of the credit shall be maintained by the taxpayer in their files and be made available to the Insurance Commissioner, on request, in accordance with COMAR 31.06.04.03. The documentation should include documents from the agency granting the credit and a list of the names and telephone numbers for the taxpayer's staff who are directly involved in granting the credits. All information shall be retained for a minimum of three years from the date of the filing of the final tax return on which the credit is taken.

Public service company franchise tax

:
Form AT3-74 must be submitted with the franchise tax return (SDAT forms 11 or 11T).
Comptroller of Maryland
Revenue Administration Division
110 Carroll Street
Annapolis, MD 2141
Phone: 410-260-7980 from Central Maryland,
1-800-MD TAXES from elsewhere
E-mail: taxhelp@marylandtaxes.gov

or

State Department of Assessments and Taxation
301 West Preston Street
Baltimore, MD 21201-2395
Phone: 410-767-1191
E-mail: taxcredits@dat.state.md.us

Businesses or individuals who make a donation to a qualified permanent endowment fund at an eligible community foundation may be eligible for a credit against the Maryland State income tax.

The credit may be taken against corporate income tax, personal income tax, insurance premiums tax or public service company franchise tax. However, the same credit may not be applied to more than one tax type.

Donations of $500 or more of cash or publicly traded securities made by the taxpayer to a "qualified permanent endowment fund" at an "eligible community foundation" that meets certain requirements are eligible for tax credits. Individuals and businesses may claim a maximum of $50,000 in credits per year, representing a donation of no more than $200,000.

The taxpayer must apply to the Maryland Department of Housing and Community Development (DHCD) for a certification for the donation.

For any tax year, the sum of all Endow Maryland tax credits, including any carryover credits, may not exceed the lesser of $50,000 or the total amount of tax otherwise payable by the individual and/or business for the tax year. Excess credits may be carried over for five (5) years.

The credit is 25% of the value of the approved donation. Each business or individual may claim a credit of up to $50,000. Businesses and individuals claim the Endow Maryland Tax Credit by filing an electronic tax return supporting Business Income Tax Credit Form 500CR. An electronic return must be filed to claim this credit against the Maryland income tax. See exception below.

Exception: Individuals who are eligible to claim the Endow Maryland Tax Credit, and who are not PTE members may elect to claim this credit on Part I of Form 502CR, instead of claiming the credit on Part V of Form 500CR. Taxpayers electing to use Form 502CR to claim the Endow Maryland Tax Credit are not required to file their return electronically. However, an individual may not claim this credit on both Form 500CR and Form 502CR. PTE members who are eligible for this credit must claim the credit on Business Income Tax Credit Form 500CR.

Individuals who anticipate having a carryover of the Endow Maryland Tax Credit are advised to use Form 500CR instead of Form 502CR.

See Form 500CR Instructions for specific line-by-line instructions. Form 500CR must still be filed electronically.

Whenever the Endow Maryland Tax Credits are claimed against the income tax, an addition modification must be included for the amount deducted as a donation to the extent that the amount of donation is included in an application for the Endow Maryland Tax Credit.

A copy of the required approval from the Department of Housing and Community Development DHCD must be attached to the appropriate electronic Maryland Income Tax Return - Form 500 for Corporations, Form 510 and Form 510 Schedule K-1 for Pass-Through Entities, and Form 502 for individuals, electing to use Form 500CR. The Form 500CR section of the electronic return must also be completed.

A copy of the required approval from the DHCD must be attached to Form 502 for those individuals, electing to use Form 502CR.
Department of Housing and Community Development
Division of Neighborhood Revitalization
2 N. Charles St., Suite 450
Baltimore, MD 21202
Phone: 410-209-5800
E-mail: endowmaryland.nr@maryland.gov

Donors that make a donation to a qualified permanent endowment fund held at an eligible institution of higher education may be eligible for a credit against the Maryland State income tax. The tax credit terminates December 31, 2023.

To qualify for the credit

Cash donations made by the taxpayer to a qualified permanent endowment fund that meet certain requirements are eligible for tax credits. Donations must be made to a qualifying fund at any of the following institutions: Bowie State University, Coppin State University, Morgan State University, or University of Maryland Eastern Shore. In each tax year, the Comptroller may award a maximum of $60,000 in tax credits to each of the four institutions.

How the credit is calculated

The credit is 25% of the value of a proposed donation to a qualified permanent endowment fund. The donor must apply to the Comptroller of Maryland for a certification of the donation.

Credit application procedure

Donors seeking the tax credit must apply to the Comptroller for a tax credit certificate in the calendar year that the donation is made.

Applications must be sent by e-mail and are approved on a first-come, first-serve basis until the maximum amount of authorized credits have been approved.

For tax year 2019, the HBCU Tax Credit Application will be accepted beginning July 1, 2019 at 8 a.m.

An acknowledgement letter is issued when an application for the proposed donation is received. Donors are required to submit documentation from the institution showing proof of donation within 30 days before a final tax credit certificate is issued.

Where to send applications

Applications are accepted by e-mail only; and should be sent to HBCUtaxinfo@marylandtaxes.gov

All fields on the application are required to be completed fully. Incomplete applications will not be processed.

How the credit is claimed

Donors claim the credit by including the certification at the time the Maryland income tax return is filed. Individuals that are eligible to claim the income tax credit and are not PTE members may elect to claim the credit using Form 502CR, instead of Form 500CR. However, a donor may not claim the credit on both Form 500CR and Form 502CR. PTE members that are eligible for the credit must claim it on the Business Income Tax Credit Form 500CR. Corporations and Fiduciaries that are eligible to claim the credit must use Form 500CR to do so.

A taxpayer claiming the credit is required to add back the amount of the credit claimed to Maryland adjusted gross income or Maryland modified income, to the extent excluded from federal adjusted gross income.

Contact

Comptroller of Maryland

HBCU Tax Credit Office

HBCUtaxinfo@marylandtaxes.gov

Businesses located in a Maryland Enterprise Zone or in a Regional Institution Strategic Enterprise (RISE) zones, as defined in Section 5-1401(e) of the Economic Development Article, may be eligible for income tax credits based upon wages paid to qualifying employees.

Go to the Department of Commerce (DOC) to see the list of Maryland Enterprise Zones by region.

There are two types of income tax credits for firms in an enterprise zone; a general income tax credit and a larger income tax credit for hiring economically disadvantaged employees.

Sole proprietorships, corporations and pass-through entities, such as partnerships, subchapter S corporations, limited liability companies and business trusts may claim the tax credit.
The business must hire at least one employee who:
  • Is a new employee or an employee rehired after being laid off for more than one year;
  • Worked for the business for at least 35 hours per week for six months or more;
  • Earns at least 150% of the federal minimum wage;
  • Spends at least 50% of the workday either in the enterprise zone or on activities of the business resulting from its location in the enterprise zone or focus area;
  • Is hired after the date the enterprise zone was created or the date the business located in the enterprise zone or focus area, whichever is later; and
  • Is not hired to replace an individual employed by the business within the last four years.
If the individual is economically disadvantaged, the business must obtain certification from the Maryland Department of Labor, Licensing and Regulation.
The income tax credit is $1,000 for each qualified new employee filling a newly created position in an enterprise zone, or $1,500 for each qualified new employee in a focus area.

The tax credit for economically disadvantaged employees is for a three-year period for each qualified employee, earned at the following amounts:
Enterprise Zone Focus Area
First Year $3,000 $4,500
Second Year $2,000 $3,000
Third Year $1,000 $1,500
In order to receive the tax credit, an economically disadvantaged employee must remain in the position for three years. However, if the disadvantaged employee leaves the firm and is replaced by another employee who is also certified as disadvantaged, the firm may take the remainder of the credit as if the original employee had remained.

If the credit allowed in any tax year exceeds the State income tax for that tax year, a business entity may apply the excess as a credit against the State income tax for succeeding tax years until the earlier of the full amount of the excess is used or the expiration of the 5th tax year from the date on which the business entity hired the qualified employee to whom the credit first applies.
The business must include certification with the electronic return which shows the business is located in a Maryland enterprise zone. For Tax Years after December 31, 2012, this credit must be claimed in the Form 500CR section of an electronically filed Maryland return.

Maryland has more than 30 enterprise zones. Counties and municipalities are responsible for certifying a business as eligible for the tax credits. Contac the county or municipal enterprise zone administrator for more information. DOC has a list of jurisdictions with enterprise zones on its website.
Maryland Department of Commerce
Office of Finance Programs, Tax Incentives Group
401 E. Pratt Street
Baltimore, MD 21202
Phone: 410-767-6438 or 410-767-4041

Economically disadvantaged employees are those who are certified as such by:

Maryland Department of Labor, Licensing and Regulation
Division of Workforce Development and Adult Learning
1100 N. Eutaw St.
Baltimore, MD 21201
Phone: 410-767-2047
A qualified film production entity may be entitled to a refundable Maryland income tax credit for certain costs incurred in the State that are necessary to carry out a film production activity in the State. This credit is available for tax years beginning after December 31, 2010.
To claim the credit, before beginning a film production activity, a qualified film production entity shall apply with the Maryland Department of Commerce for an initial credit certificate for the estimated production costs. Generally to qualify as a film production entity, the estimated total direct costs incurred in Maryland must exceed $250,000. However, for a Maryland small or independent film entity to qualify as a film production entity, the estimated total direct costs incurred in Maryland must exceed $25,000 and at least 50% of the filming of the film production activity must occur within Maryland. The credit claimed cannot exceed the amount stated in the final certificate.

An initial application describing the anticipated film production activity must be submitted to the Maryland Film Office of the Department of Commerce (DOC) by the film production entity before beginning a film production activity. A Preliminary Tax Credit Certificate(s) for these credits cannot be issued until July 1st of the fiscal year from which the credits will be drawn. The Final Tax Credit Certificate(s) will be issued after DOC has reviewed all required closing documentation, including completion of the Agreed Upon Procedures process.
After the production activity is completed, the film production entity must apply to the DOC for a tax credit certificate, providing proof of the total direct costs that qualify for the credit and the number of employees hired and qualifying wages paid. DOC will determine the total direct costs that qualify for a refundable Maryland income tax credit and issue a tax credit certificate for 25% of the total direct costs that qualify for the refundable income tax credit (27% of the total qualified direct costs for a television series).

A film production entity will not receive more credit than the amount certified by DOC.

This tax credit is a refundable tax credit, i.e. if the tax credit allowed in any taxable year exceeds the total tax otherwise payable by the qualified film production entity for that taxable year, the qualified film production entity may claim a refund in the amount of the excess.
For taxable years beginning after December 31, 2012, this credit is available only with an electronically-filed return. A copy of the final certificate issued by DOC must be included with the electronic return, and the Form 500CR section of the return must be completed.
Catherine Batavick, Deputy Director
Maryland Film Office
Maryland Department of Commerce
World Trade Center
401 E. Pratt Street, 14th Floor
Baltimore, MD 21202
Phone: 410-767-6342 or 1-800-333-6632

Website: www.marylandfilm.org
E-mail: catherine.batavick@maryland.gov
This credit expired as of December 31, 2011 and no new applications are being accepted. Businesses that constructed or rehabilitated a building conforming to specific standards intended to save energy and to mitigate environmental impact may have been able to take a credit for a portion of the cost. The total amount of initial credits certified for all taxpayers each year were subject to statutory limitations.

The tax credit is limited to the State portion of the income tax. Excess credits can be carried over for up to 10 years beginning with the tax year in which the credit was earned.

The credit was taken against corporate income tax or personal income tax. Sole proprietorships, corporations and pass-through entities, such as partnerships, subchapter S corporations, limited liability companies and business trusts were eligible to claim or pass on the tax credit. Note: This tax credit is no longer applicable to pass-through entities because once the credit is earned and passed on to the members, the members (and not the pass-through entity) will track any carryover period. claim the tax credit.
For Tax Years beginning after December 31, 2012, the carryover of the excess Green Building income tax credit must be requested on an electronic return completing the Form 500CR section of the electronic return.
Comptroller of Maryland
Revenue Administration Division
110 Carroll Street
Annapolis, MD 21411-0001
Phone: 410-260-7980 from Central Maryland,
1-800-MD TAXES from elsewhere
E-mail: taxhelp@marylandtaxes.gov

During the 2016 Legislative Session, the legislative evaluation committee created by the Tax Credit Evaluation Act of 2012 was required to review the Sustainable Communities Tax Credit. The credit was amended and renamed the Heritage Structure Rehabilitation Tax Credit.

A refundable credit may be allowed to homeowners for renovating historic homes and to business taxpayers for a portion of substantial expenditures incurred to rehabilitate certified structures in Maryland on or after June 1, 2010, but before July 1, 2022. In addition, the Maryland Historical Trust certifies "Small Commercial Projects," which will help fund modest rehabilitation projects such as roof repair and façade restoration. Business taxpayers who begin their work prior to January 1, 2015 will not be eligible for certification.

Homeowners of single-family, owner-occupied residences may be eligible for a tax credit for up to 20 percent of eligible rehabilitation costs, including repairs such as:

  • Roof repair and replacement
  • Chimney repair and lining
  • Window restoration
  • New storm doors/windows
  • Masonry repointing
  • Floor refinishing
Owners of income-producing properties may be eligible for a state income tax credit for renovating historic buildings. The program offers property owners a tax credit up to 20 percent of eligible expenses, up to a total $3 million, for substantial rehabilitation projects. An additional 5 percent credit may be earned for high performance properties that achieve a LEED Gold certification or equivalent.

The credit may be taken against the corporate income, personal income or insurance premium tax.

Sole proprietorships, corporations, tax-exempt non-profit organizations and pass-through entities, such as partnerships, subchapter S corporations, limited liability companies and business trusts may claim the tax credit.

A homeowner must undertake the rehabilitation of a single-family, owner-occupied residential structure; and the rehabilitation expenses must exceed $5,000. The buildings that are being rehabilitated must be certified as historic, defined as having at least one of the following designations:

  • Individually listed in the National Register of Historic Places; or
  • A contributing resource within a National Register Historic District; or
  • A locally designated structure or contributing resource to a local historic district that the Maryland Historical Trust (MHT) determines to be eligible for the National Register
The credit for homeowners is capped at $50,000 in a 24-month period.

Businesses must undertake substantial rehabilitation of income-producing buildings. "Substantial rehabilitation" means the greater of the adjusted basis of the structure or $25,000. The same expenditures may not be used to qualify for a credit in any other tax year. In addition, these buildings must be certified as historic, defined as having at least one of the following designations:
  • Individually listed in the National Register of Historic Places; or
  • A contributing resource within a National Register Historic District; or
  • A locally designated structure or contributing resource to a local historic district that MHT determines to be eligible for the National Register; or
  • Located within and certified as contributing to the significance of a Certified Heritage Area.
Some businesses may qualify as a "small commercial project." Businesses must undertake the rehabilitation of income-producing buildings and contain no more than 75 percent residential rental use. A main street business with a top floor apartment is an example of a small commercial property. In addition these buildings must be certified as historic, defined as having at least one of the designations above for business taxpayers.

Small commercial rehabilitations cannot exceed $500,000 in expenses, and the credit is capped at $50,000 in a 24-month period.

The business must receive certification from the Maryland Historical Trust (MHT). A credit will not be approved if work has already begun on a project prior to submission of the application, or if the applicant for a commercial rehabilitation has previously submitted three or more applications for commercial rehabilitations exceeding a total of $500,000 in the same year.

An individual or business may claim a tax credit for:

  • 20% of the qualified rehabilitation expenditures; plus
  • 5% of the qualified rehabilitation expenditures if the certified rehabilitation is a certified historic structure and a high performance building
Small Commercial Projects do not qualify for the additional 5% credit for being a high performance building.

For certified commercial rehabilitation projects, the credit is limited to $3 million. For all other certified rehabilitation projects, the credit is limited to $50,000. The amount of the credit that exceeds tax liability in the year the credit is claimed may be refunded.

A pro-rated percentage of the credit is subject to recapture if disqualifying work is performed, or the certified rehabilitation is disposed of, during a five-year period that begins with the year in which the certified rehabilitation was completed.

Within 18 months of a credit certificate being issued, the business or individual undertaking the rehabilitation must notify the Maryland Historical Trust that work on the project has begun. In general, without additional approval by the MHT, commercial rehabilitations must be completed within 30 months of the issuance of the initial credit certificate.

Corporations: For Tax Years beginning after December 31, 2012 Maryland Corporations must file their Maryland corporation return electronically and complete the Heritage Structure Rehabilitation Credit Form 502S and Form 500CR sections of the electronic corporation return and submit a pdf of the Maryland Historical Trust certification to claim this refundable credit.

Pass-Through Entities: For Tax Years beginning after December 31, 2012 Maryland Pass-Through Entities(PTEs) must file their Maryland Form 510 electronically and complete the Heritage Structure Rehabilitation Credit Form 502S and Form 500CR sections. PTEs must submit a pdf of the Maryland Historical Trust certification to pass this credit on to its members. In addition the PTE must provide Form 510 Schedule K-1 which separately states each member's distributive or pro rata share of the credit, and the MHT certification to each member.

Individuals (including fiduciaries): Form 502S must be completed and submitted with the income tax return (Form 502, Form 505 or Form 504) along with the MHT certification. For Tax Year 2013 and 2014, individuals are not required to file electronically to claim the Heritage Structure Rehabilitation Credit if they have no other business tax credit. Individuals will also complete and attach Form 502CR when filing Form 502S.

Insurance premium tax: Documentation of the credit shall be maintained by the taxpayer in their files and be made available to the Insurance Commissioner, upon request, in accordance with COMAR 31.06.04.03. The documentation should include documents from the agency granting the credit, and a list of the names and telephone numbers for the taxpayer's staff who are directly involved in granting the credits. All information shall be retained for a minimum of three years from the date of the filing of the final tax return on which the credit is taken.

Maryland Historical Trust
100 Community Place
Crownsville, MD 21032-2023

For information about the Homeowner and Small Commercial Project Tax Credit:
Contact: Megan Klem, megan.klem@maryland.gov, 410-514-7688
mht.maryland.gov/taxcredits_homeowner.shtml
mht.maryland.gov/ taxcredits_small_commercial.shtml

For Commercial Rehabilitations:
Contact: Collin Ingraham, collin.ingraham@maryland.gov, 410-514-7671
mht.maryland.gov/taxcredits_competitive_commercial.shtml

Certain businesses that create new qualified positions in Maryland before January 1, 2020 may be eligible for tax credits based on the number of qualified positions created.

The credit may be taken against corporate income tax, personal income tax, insurance premium tax or public service company franchise tax. The same credit may not, however, be applied to more than one tax type. Sole proprietorships, corporations and pass-through entities, such as partnerships, subchapter S corporations, limited liability companies and business trusts may claim the tax credit.

The income tax credit is not refundable and is applied only against the Maryland State income tax.

The business facility must be certified as having created at least 60 qualified positions, 25 qualified positions if the business facility established or expanded is in a Maryland Priority Funding Area or 10 qualified positions in a county with an annual average employment that is less than 75,000 or a median household income that is less than two-thirds of the statewide median household income.

A qualified position is a full-time position which pays at least 120% of the State minimum wage, is located in Maryland, is newly created as a result of the establishment or expansion of a business facility in a single location in the state and is filled.

Qualified business entities are those that are certified as such by the Maryland Department of Commerce. A qualified employee is an employee filling a qualified position.

Before filling these new positions, the company must notify the Maryland Department of Commerce to seek certification.

The credit allowed depends on where in Maryland the facility is located:

  • If the facility is located in a revitalization area, as defined in the statute, the credit is $5,000 multiplied by the number of employees hired to fill the new positions.
  • If the facility is not located in a revitalization area, the credit is $3,000 multiplied by the number of employees hired to fill the new positions.
The total credit earned by any one company may not exceed $1 million for any credit year. If the credit is more than the State portion of the income tax liability, the unused credit may be carried forward for the next five (5) tax years, or until it is fully used, whichever comes first.

If, at any time during the three tax years after the year the credit was earned, the average number of qualified positions falls more than 5% below the average number of qualified positions during the year in which the credit was earned, a portion of the credit will be recaptured for the tax year in which this occurs.

The amount to be recaptured is the amount originally claimed as a tax credit multiplied by the percentage reduction in the number of qualified employees. The income tax credit to be recaptured is reported on the line specified for recaptures in the Business Tax Credit Summary of Form 500CR.

For taxable years beginning after December 31, 2012, the income tax credit is available only with an electronically-filed return. A copy of the certification issued by the Maryland Department of Commerce must be included with the electronic return, and the Form 500CR section of the return must be completed.

Insurance premium tax:
Documentation of the credit shall be maintained by the taxpayer in their files and be made available to the Insurance Commissioner, on request, in accordance with COMAR 31.06.04.03. The documentation should include documents from the agency granting the credit and a list of the names and telephone numbers for the taxpayer's staff who are directly involved in granting the credits. All information shall be retained for a minimum of three years from the date of the filing of the final tax return on which the credit is taken.

Public service company franchise tax:
Form AT3-74 must be submitted with the franchise tax return (SDAT forms 11 or 11T).

Maryland Department of Commerce
Office of Finance Programs, Tax Incentives Group
401 E. Pratt Street
Baltimore, MD 21202
Phone: 410-767-6438 or 410-767-4980
E-mail: taxincentives@choosemaryland.org

Businesses that employ persons with disabilities, as determined by the Division of Rehabilitation Services (DORS) in the Maryland State Department of Education and/or by the Maryland Department of Labor, may be eligible for a tax credit for wages paid to, and for childcare expenses and for transportation expenses paid on behalf of qualified employees.

The credit may be taken against corporate income tax, personal income tax, state and local taxes withheld (for certain tax-exempt organizations only), insurance premiums tax or public service company franchise tax. The same credit may not, however, be applied to more than one tax type.

Sole proprietorships, corporations, tax-exempt nonprofit organizations and pass-through entities, such as partnerships, subchapter S corporations, limited liability companies and business trusts may claim the tax credit.

The company must hire an individual with a disability and obtain a determination from the Division of Rehabilitation Services (DORS) in the Maryland State Department of Education, or the Maryland Department of Labor for a disabled veteran, that the individual is a qualified employee with a disability.
A "Qualified Employee" with a disability means an individual who:

  1. Meets the definition of an individual with a disability as defined by the Americans with Disability Act;
  2. Has a disability that presently constitutes an impediment to obtaining or maintaining employment or to transitioning from school to work; and,
  3. Is ready for employment; or,
  4. Is a veteran who has been discharged or released from active duty by the American Armed Forces for a service-connected disability.
An employee must not have been hired to replace a laid-off employee or to replace an employee who is on strike or for whom the business simultaneously receives federal or state employment training benefits. Qualifying child care expenses are those expenses incurred by a business to enable a qualified employee with a disability to be gainfully employed.

The credit is allowed for the first two years of employment of the disabled individual for both the wages paid and the child care or transportation expenses paid on behalf of the employee as follows:

First Year
  • Wages - 30% of the first $6,000 paid in the first year for a maximum allowable credit of $1,800
  • Child care or transportation expenses - up to $600 of expenses paid in the first year
Second Year
  • Wages - 20% of the first $6,000 of wages paid in the second year for a maximum allowable credit of $1,200
  • Child care or transportation expenses - up to $500 of expenses paid in the second year

If the credit is more than the tax liability, the unused credit may be carried forward for up to five (5) tax years.

For tax years prior to 2012, the credit may not be claimed if the Maryland Employment Opportunity Tax Credit was claimed for the same employee.

A 501( c)(3) tax-exempt organization may estimate the amount of the tax credit for qualifying employees for the tax year. The total amount of the estimated credit should be divided evenly over the number of periods for filing withholding returns (Form MW506). For example, if quarterly returns are required, then the total estimated credit should be divided by four. Each payment to the Comptroller would be reduced by the pro rata amount of the credit.

Alternatively, the tax-exempt organization could apply the credit against the tax on unrelated business taxable income.

Whenever this credit is claimed against the income tax, an addition modification must be made in the amount of the credit claimed.

For taxable years beginning after December 31, 2012, this credit is available only with an electronically-filed return. A copy of the determination from DORS or the Maryland Department of Labor must be included with the electronic return, and the Form 500CR section of the return must be completed.
State and local income taxes withheld:

Form MW508CR must be submitted with Form MW508, the Maryland Annual Employer Withholding Reconciliation Report. A copy of the determination from DORS or the Maryland Department of Labor must be included with the MW508CR. If the tax-exempt employer is required to file its MW508 electronically, then the employer should submit Form MW508CR and documentation with a paper Form MW508A after the electronic Form MW508 is transmitted.

Insurance premiums tax:
Documentation of the credit shall be maintained by the taxpayer in their files and be made available to the Insurance Commissioner, on request, in accordance with COMAR 31.06.04.03. The documentation should include documents from the agency granting the credit and a list of the names and telephone numbers for the taxpayer's staff who are directly involved in granting the credits. All information shall be retained for a minimum of three years from the date of the filing of the final tax return on which the credit is taken.

Public service company franchise tax:
Form AT3-74 must be submitted with the franchise tax return (SDAT forms 11 or 11T).

Maryland State Department of Education
Division of Rehabilitation Services
2301 Argonne Drive
Baltimore, MD 21218
Phone: 1-888-554-0334 or 410-554-9442 or
Maryland Department of Labor
Division of Employment and Training
1100 N. Eutaw Street, Room 201
Baltimore, MD 21201
Phone: 410-767-2047

Businesses may be eligible to claim a credit against the State income tax for a portion of the costs incurred to obtain federal security clearances and to construct or renovate certain sensitive compartmented information facilities.

Businesses must submit an application to the Maryland Department of Commerce (DOC) by September 15 of the calendar year following the end of the tax year for which the costs were incurred. DOC shall certify the amount of the approved credit by December 15 of the calendar year following the end of the tax year in which the costs were incurred.

The credit can be taken for tax years beginning after December 31, 2012, but before January 1, 2022.

The Department of Commerce may not exceed $2 million in credits for any calendar year. If the total amount of credits applied for by all businesses exceeds $2 million, the credits will be approved on a pro-rata basis.

The credit is the sum of:

  • Security clearance administrative expenses, not to exceed $200,000;
  • 50% of the construction and equipment costs to construct or renovate a single Sensitive Compartmented Information Facility (SCIF) not exceed $200,000 the total amount of construction and equipment costs incurred to construct or renovate multiple SCIFs for which a credit can be claimed may not exceed $500,000; and
  • Expenses incurred for rental payments owed during the first year of a rental agreement for spaces leased in the State if the individual or corporation is a Qualified Small Business that performs security-based contracting, not to exceed $200,000.
If the credit is more than the State tax liability, the unused credit may be carried forward for succeeding tax years until fully used.

Whenever a credit is claimed against the income tax for Security Administrative Expenses or the costs associated with a SCIF, an addition modification must be made in the amount of the credit claimed in Part J-I, line 3 of the Form 500CR. The add back requirement does not apply to a Qualified Small Business claiming the credit for First-Year Leasing Costs.

During the 2103 Legislative Session, the Maryland General Assembly amended certain provisions of the bill which authorized this tax credit that were effective for Tax Years beginning in 2013. As a result, there are some special provisions that apply when claiming the 2013 tax credit. Contact DOC, or go to their website, if you are claiming the 2013 credit and need more information.

To claim the ESCC tax credit, a business must submit an application to the Maryland Department of Commerce by September 15th following the tax year in which the related expenses and costs were incurred. By December 15th of that year, the Maryland Department of Commerce will certify the approved amount. To claim the credit, the applicant must: 1) file an electronic Maryland income tax return with the Comptroller of Maryland for any taxable year after the taxable year in which the costs were incurred; or 2) file an electronic amended Maryland income tax return with the Comptroller of Maryland. A copy of the Maryland Department of Commerce certification must be included with the return.

Maryland Department of Commerce (DOC)
Division of Business Development, Tax Incentives Group
World Trade Center
401 East Pratt Street, 17th Floor
Baltimore, MD 21202
Phone: 410-767-6438 or 410-767-4041

A qualified co-generator, a public service company, or an electricity supplier that purchases coal mined in Maryland on or before December 31, 2020, may be eligible for a tax credit.

The credit may be taken against corporate income tax or personal income tax, public service franchise tax. The same credit may not, however, be applied to more than one tax type.

Sole proprietorships, corporations and pass-through entities, such as partnerships, subchapter S corporations, limited liability companies and business trusts may claim the tax credit.

The business must purchase Maryland-mined coal during the tax year. To take the credit against the income tax, an application must be submitted to the State Department of Assessments and Taxation (SDAT).

An electricity supplier must not have been an electric company before July 1, 1999, and both co-generators and electricity suppliers must not be subject to the public service company franchise tax. The total amount of credits approved by SDAT for the tax years 2007 and later are limited. In addition, $2,250,000 of the credits must be reserved for Maryland-mined coal for use in a Maryland facility.

The credit is $3 per ton of Maryland-mined coal purchased during the tax year, but cannot exceed the credit amount approved by SDAT.

The co-generator or electricity supplier may only apply the credit against the State income tax for the tax year in which the credit was earned. The amount of the credit may not exceed the State income tax for that tax year.

An electronic tax return supporting Form 500CR must be filed to claim this credit against the Maryland income tax, for tax years beginning after December 31, 2012.

See Form 500CR Instructions for specific line-by-line instructions.

An electronic tax return supporting Form 500CR must be filed to claim this credit against the Maryland income tax, for tax years beginning after December 31, 2012. The appropriate electronic Maryland Income Tax Return - Form 500 for Corporations, Form 510 and 510 Schedule K-1 for Pass-Through Entities, and Form 502 or 505 for Individuals must be filed to claim this credit. A copy of the certification by the State Department of Assessments and Taxation (SDAT) must be included with the electronic return

Public service company franchise tax:

Computation and schedule must be submitted with the franchise tax return (SDAT Form 11 or 11T).

State Department of Assessments and Taxation
301 West Preston Street
Baltimore, MD 21201-2395
Phone: 410-767-1191
E-mail: taxcredits@dat.state.md.us

Credits may be claimed for eligible project costs incurred to establish, relocate or expand a business facility in a Tier I Maryland county. To qualify for the credit for project costs, a minimum of $500,000 must be spent on eligible project costs. At least 50 newly hired qualified employees must be employed for at least one year at the new or expanded facility for eligibility for the maximum credit of $5,000,000, or at least 25 but fewer than 50 for eligibility for a maximum credit of $2,500,000, or at least 10 but fewer than 25 for eligibility for a maximum credit of $1,000,000. This credit may also be claimed by tax-exempt nonprofit organizations that are qualified business entities against their unrelated business taxable income. If claiming a credit for multiple projects, complete a separate Part P of Form 500CR for each project.

For information on Tier I counties, qualified employees, eligible costs and other requirements businesses must satisfy to qualify for credit, contact:

Maryland Department of Commerce
Office of Finance Programs, Tax Incentives Group
401 E. Pratt St.
Baltimore, MD 21202
410-767-6438 or 410-767-4980

A business cannot be certified as a qualified business entity by the Secretary of the Maryland Department of Commerce unless the business notifies the Maryland Department of Commerce of its intent to seek certification before hiring any qualified employees to fill the qualified positions.

The qualified business entity must report to the Maryland Department of Commerce the amount of the project tax credit that the entity claims on the entity's tax return for each taxable year that the entity claims any portion of the project tax credit. Failure of the qualified business entity to report the amount claimed disqualifies the entity from claiming any unclaimed amount of the project tax credit.

For any taxable year, if a qualified business entity claims the project tax credit, the qualified business entity cannot also claim a Job Creation Tax Credit authorized under Section 6-304 of the Maryland Economic Development Article.

Pass-through entities (PTEs), filing Maryland Form 510 with eligible project costs must follow the additional instructions following Part P-IV Summary of Form 500CR.

Note: A qualified business entity, which has been certified for the tax credit, may claim a prorated share of this credit, if: (1) the number of qualified positions falls below the minimum number of qualified positions required to qualify for the project tax credit, but does not fall below 10, and (2) the qualified business entity has maintained at least the minimum number of qualified positions required to qualify for the project tax credit for at least five years.

Generally, at any time after the 4th taxable year in which the qualified business entity claims the project tax credit, the business may request a refund of any excess credit. For any taxable year, the total amount claimed as a refund must not exceed the amount of tax that the qualified business entity is required to withhold for the taxable year from the wages of qualified employees under Section 10-908 of the Maryland Tax- General Article.

Credits may be claimed for eligible project costs and for eligible start-up costs incurred to establish, relocate or expand a business facility in a distressed Maryland county. To qualify for the credit for project costs, a minimum of $500,000 must be spent on eligible project costs. At least 25 newly hired qualified employees must be employed for at least one year at the new or expanded facility.

This credit may also be claimed by tax-exempt nonprofit organizations that are qualified business entities against their unrelated business taxable income.

If claiming a credit for multiple projects, complete a separate Part P of Form 500CR for each project.

For information on distressed counties, qualified employees, eligible costs and other requirements, businesses must satisfy to qualify for credit, contact:

Maryland Department of Commerce
Office of Finance Programs, Tax Incentives Group
401 E. Pratt St.
Baltimore, MD 21202
410-767-6438 or 410-767-4980

Pass-through entities (PTEs), filing Maryland Form 510 with eligible project costs and eligible start-up costs must follow the additional instructions following Part P-IV Summary of Form 500CR.

Note: For tax years beginning after December 31, 2010, a qualified business entity, which has been certified for the tax credit, may claim a prorated share of this credit, if: (1) the number of qualified positions falls below 25, but does not fall below 10, and (2) the qualified business entity has maintained at least 25 qualified positions for at least five years.

Generally, at any time after the 4th tax year but before the expiration of the 15th tax year after the project was placed in service or the business locates to a qualified distressed county, the business may apply the excess to the entity's total Maryland State income tax liability and may request a refund of any excess credit. If the majority of the qualified positions are paid at least 250% of the federal minimum wage, then the refundable years will begin after the 2nd tax year rather than the 4th tax year.

An individual or corporation may claim a credit against the State income tax in an amount equal to $5 for each bushel of oyster shells recycled during the tax year. The credit may not exceed $1,500 per taxpayer.

The credit may be taken against corporate income tax, or the State portion of the personal income tax. A credit may not be allowed against more than one type of tax. Any unused credit amount for the tax year may not be carried forward to any other tax year.

No credit may be earned for any tax year beginning on or after January 1, 2023.

Sole proprietorships, corporations, and pass-through entities, such as partnerships, subchapter S corporations, limited liability companies and business trusts may claim the tax credit.

To claim the credit, an individual or corporation must submit certification from the Maryland Department of Natural Resources, which verifies the amount of oyster shells recycled during the year.

The Comptroller of Maryland will allow a Maryland income tax credit for the amount certified by the Department of Natural Resources, not to exceed the lesser of $1,500 per taxpayer or the amount of the State income tax liability. If the credit is more than the state tax liability, the unused credit may not be carried forward to any other tax year.

The Oyster Shell Recycling Tax Credit is available only on an electronically-filed income tax return for the tax year in which the credit is being claimed. The Form 500CR section of the electronic return must be completed and must include the certification from the Department of Natural Resources.

Maryland Department of Natural Resources
Tawes State Office Building
580 Taylor Avenue
Annapolis, MD 21401
410-260-8300

An individual or corporation may claim a credit against the State income tax for the expense of registering a qualified vehicle in Maryland. The credit may not exceed the lesser of $400 for each qualified vehicle or the State income tax for the tax year.

The credit may be taken against corporate income tax, or the State portion of the personal income tax. A credit may not be allowed against more than one type of tax. Any unused credit amount for the tax year may not be carried forward to any other tax year.

No credit may be earned for any tax year beginning on or after January 1, 2020.

Sole proprietorships, corporations, and pass-through entities, such as partnerships, subchapter S corporations, limited liability companies and business trusts may claim the tax credit.

"Qualified vehicle" means a Class F (Tractor) vehicle described under § 13-923(a) of the Transportation Article that is titled and registered in Maryland. These "tractors" are the ones which pull trailers, as opposed to farm tractors.

For each qualified Class F tractor registered by the taxpayer in Maryland, the Comptroller will allow a Maryland income tax credit for the lesser of:

  1. The expenses of registering a Class F tractor in Maryland during the tax year; or
  2. $400 for each qualified Class F tractor in Maryland; or
  3. The State portion of the Maryland income tax liability for the tax year.
If the credit is more than the state tax liability, the unused credit may not be carried forward to any other tax year.

A copy of the tax credit certificate from MVA must be included with your tax return when claiming this tax credit. However, the Qualified Vehicle Tax Credit is available only on an electronically-filed income tax return for the tax year in which the credit is being claimed. The Form 500CR section of the electronic return must be completed to claim the Maryland tax credit.

Businesses that invest in research and development in Maryland may be entitled to an income tax credit. The total credits for all businesses may not exceed $9 million a year.

This credit is available for tax years beginning after December 31, 1999, but before January 1, 2020.

The credit may be taken against corporate income tax or State portion of the personal income tax. Sole proprietorships, corporations and pass-through entities, such as partnerships, subchapter S corporations, limited liability companies and business trusts may claim the tax credit.

Research and Development tax credits certified after December 15, 2012 are refundable for a "small business" to the extent that the tax credits exceed the income tax liability for that taxable year. A "Small Business" is defined as a for-profit corporation, limited liability company, partnership or sole-proprietorship with net book value assets totaling at the beginning or the end of the tax year for which the Maryland qualified research and development expenses are incurred, as reported on the balance sheet, less than $5,000,000.

The business must invest in research and development activities in Maryland during the tax year. The business must also submit an application for the credit to the Maryland Department of Commerce (DOC) by September 15 of the year following the tax years in which the Maryland qualified expenses were incurred.

In addition to submitting the application to DOC, small businesses must submit documentation showing they had net book value assets, at the beginning or end of the tax year, as reported on the balance sheet, of less than $5 million.

If the total Basic tax credits applied for in a tax year exceed $4.5 million, the businesses' Basic tax credit will be prorated. If the total Growth tax credits applied for in a tax year exceed $4.5 million, the businesses' Growth tax credit will be prorated.

DOC will certify the amount of credit available to the business by December 15.

There are two types of research and development tax credits available to businesses:

  • Basic Research and Development Credit: 3% of the lesser of its Maryland qualified research and development expenses incurred during the tax year or the Maryland base amount, subject to statutory limits on the total amount of credits to all firms;
  • Growth Research and Development Credit: 10% of the Maryland qualified research and development expenses incurred during the year that exceeds the Maryland base amount, subject to statutory limits on the total amount of credits to all firms.
The Maryland base amount is the average annual gross receipts of the business for the four preceding tax years multiplied by the Maryland base percentage. For most businesses, the Maryland base percentage is the percentage that Maryland research and development expenses for the preceding four tax years is of total gross receipts for those years.

If the credit allowed in any tax year exceeds the State income tax for that tax year, a taxpayer may apply the excess as a credit against the State income tax for succeeding tax year until the earlier of:
  • The full amount of the excess is used;
  • The expiration of the 7th tax year in which the Maryland qualified research and development expense was incurred; and
  • The expiration of the 15th tax year in which the Maryland qualified research and development expense was incurred if the expense was incurred in a tax year prior to 2005.
An electronic tax return supporting Form 500CR must be filed to claim this credit against the Maryland income tax, for tax years beginning after December 31, 2012.

See Form 500CR Instructions for specific line-by-line instructions. For qualified small businesses, the amount in excess of the state tax liability may be refunded.

Whenever the Research & Development Tax Credits are claimed against the income tax, an addition modification must be made for the tax year in which the research and development expenses were paid.

A copy of the required certification from DOC must be included with the appropriate electronic return: Form 500X, the Maryland Amended Corporation Income Tax Return, or Form 502X, Maryland Amended Individual Income Tax Return or Pass-Through Entities Form 510. The Form 500CR section of the electronic amended return must also be completed.

Maryland Department of Commerce
Division of Business Development, Tax Incentives Group
World Trade Center
401 E. Pratt Street, 17th Floor
Phone: 410-767-6438 or 410-767-4980

Businesses may claim a credit against the State portion of the income tax for up to 25% of the qualified capital expenses made in connection with the establishment of new wineries or vineyards, or the capital improvements made to existing wineries or vineyards in Maryland.

The Wineries and Vineyards tax credit is available for tax years beginning after December 31, 2012, and no credit may be earned for any tax year beginning on or after January 1, 2021.

The credit may be taken against corporation income tax and the State portion of the personal income tax. Sole proprietorships, corporations and pass-through entities, such as partnerships, subchapter S corporations, limited liability companies and business trusts may claim the tax credit.

For a winery or a vineyard to claim a tax credit, an individual or corporation on behalf of the winery or vineyard must apply to and be certified by the Maryland Department of Commerce (DOC). The winery or vineyard must submit an application to DOC by September 15th following the tax year in which the qualified capital expenses were incurred.

A qualified winery is defined as an establishment licensed by the Comptroller of Maryland as either a Class 3 or Class 4 winery.

A qualified vineyard is defined as agricultural lands located in Maryland consisting of at least one contiguous acre used solely to grow grapes and other plants that will be used in the production of wine by a winery licensed by the Comptroller of Maryland.

Qualified capital expenses must be made in connection with the establishment of new wineries or vineyards, or capital improvements made to existing wineries or vineyards in Maryland.

"Qualified capital expenses" include expenditures made by the taxpayer for the purchase and installation of equipment or agricultural materials for use in the production of agricultural products at a vineyard or in a winery. Qualified capital expenses do NOT include the cost of construction or installation of buildings or structures, utilities, labor costs, service costs, repair costs, maintenance costs, and general supplies. "Qualified capital expenses" include expenditures made by the taxpayer for the purchase and installation of equipment or agricultural materials for use in the production of agricultural products at a vineyard or in a winery. Qualified capital expenses do NOT include the cost of construction or installation of buildings or structures, utilities, labor costs, service costs, repair costs, maintenance costs, and general supplies.

A list of expenses that are "qualified capital expenses" is posted on the Department of Commerce's Website
By December 15th of the year in which the application has been filed, DOC will certify the approved amount of credit. The total Maryland Wineries and Vineyards Tax Credit approved by DOC may not exceed $500,000 for any calendar year. If the total amount of credits applied for by all businesses exceeds $500,000, the credits will be approved on a pro-rata basis.

To claim the credit, the business must: 1) File an electronic Maryland income tax return with the Comptroller of Maryland for any taxable year after the taxable year in which the qualified capital expenses were incurred; or 2) File an electronic amended tax return with the Comptroller of Maryland for the year in which the expenses were incurred. A copy of the certification from the Maryland Department of Commerce must be included with the return.

DOC will certify up to 25% of the qualified capital expenses; however they may not approve more than $500,000 of tax credits in more than one calendar year. If the total amount of credits applied for by all businesses exceeds $500,000, the credits will be approved on a pro-rata basis.

If the approved credit is more than the state tax liability, the unused credit may be carried forward for up to fifteen tax years, or until used, whichever comes first.

A copy of the required certification from DOC must be included with the appropriate electronic amended return: Form 500X, the Maryland Amended Corporation Income Tax Return, or Form 502X(or Form 505X), Maryland Amended Individual Income Tax Return or Pass-Through Entities Form 510. The Form 500CR section of the electronic amended return must also be completed.

Maryland Department of Commerce
Office of Finance Programs, Tax Incentives Group
401 E. Pratt Street
Baltimore, MD 21202
Phone: 410-767-6438 or 410-767-4041 or (877) 821-0099