Maryland Form Help
The following information has been provided to assist in the preparation of Maryland returns.
Form 500 is to be filed by all corporations subject to Maryland tax and S corporations with federal taxable income subject to federal tax. Form 510 is to be filed by all partnerships, S corporations, limited liability companies treated as partnerships for federal purposes, and business trusts subject to Maryland tax. A multistate corporation or pass-through entity not subject to Maryland tax law is not required to file a return, but a return reflecting an apportionment factor of zero may be filed for record purposes. Forms 500 and 510 must be filed electronically for the entity to claim or pass-through any credit from Form 500CR or Form 502S.
Please note that certain accommodations must be made in entering address information on the Client Data Screen for Maryland purposes; Maryland requires that “Saint”, “Mount”, and “Fort” must be spelled out rather than using abbreviations.
Every corporation organized or licensed in Maryland must file Form 500, even if the corporation is inactive or has no taxable income. Every other corporation subject to Maryland income tax law with income or losses attributable to sources within Maryland also must file Form 500. Multistate corporations are subject to Maryland income tax if their Maryland activity exceeds the provisions for federal protection from state taxation under U.S.C.A. Title 15, Section 381 of the Interstate Commerce Tax Act (P.L. 86-272).
S corporations subject to excess net passive income or built-in gains tax must file Form 500 in addition to Form 510. See the Form 510 Pass-Through Entity Income Tax Return Instructions for S corporation specific guidelines for Form 500. Electronic filing of Form 500 is not supported for S corporations. All credit information in a return with both Form 510 and Form 500 present will be directed to Form 510.
Form 500 is due by the fifteenth day of the third month following the end of the tax year.
Schedule A appears as a separate form in CrossLink. This schedule will not print separately, but will instead print as the applicable page of Form 500. This schedule may display a “Form Imported or Not Supported” error when attempting to print “Current Form Only”, but this is the expected behavior.
Worksheets are provided to list the type of transaction, name and FEIN of the related party receiving the income, and the amount for related party transactions. Disallowed deduction information should be entered on the worksheet provided for addition adjustments. Subtraction adjustment information should be reported on its respective worksheet for income reported as both an addition modification on this return and as an addition modification on the state return of the related party.
A worksheet is provided for recording the adjusted net operating loss carryforward and the net operating loss modification recapture. The federal taxable income shown on this worksheet should include adjustments for decoupling modifications found on Maryland Form 500DM for each respective year. The impact of decoupling related to the NOL deduction is not to be calculated on Form 500DM; the decoupling adjustment must be taken into account in the federal taxable income shown on this worksheet. The current tax year information will be provided. See Maryland Administrative Release No. 18 for more information on the purpose and use of this worksheet. If this worksheet is used, it will be automatically included in the electronically filed return as a binary attachment.
A worksheet for state and local income tax paid is provided based on the information found in the State Estimated Tax Payments worksheet attached to the Financials – Income Statement. A worksheet for dividends and interest from another state, local, or federal tax exempt obligation is provided based on the information found in the Tax Exempt Interest Income worksheet attached to the Financials – Income Statement. A worksheet is provided for the other additions listed in the Maryland instructions. If any of these worksheets are used, they will be automatically included in the electronically filed return as a binary attachment.
A worksheet is provided for the other subtractions listed in the Maryland instructions.
Payments of estimated tax, amounts paid with an extension, and prior year overpayment credited to the state of Maryland will flow from the State Taxes Paid Worksheet on the Income Statement when the state ID entered is “MD”. Nonrefundable and refundable credits from Form 500CR will flow if Form EL101B is present in the return, since these credits can only be claimed by electronic filers. Payments made by pass-through entities on behalf of the corporation will flow from any Form 510 Schedule K-1 received present in the return.
This schedule will appear in the return and calculate from the data provided in the Multistate Allocation and Apportionment Information worksheet in the General section of the return. Note that only the gross proceeds and receipts from lines 17, 18, and 19 of the Multistate Allocation and Apportionment Information worksheet will be used on this Schedule. If the Multistate Allocation and Apportionment Information worksheet is not used, the allocation factor will be assumed to be 1.00000 throughout the return.
Use Form 500X to correct items on a previously filed Form 500. If the IRS issues a final determination of adjustments that would increase Maryland taxable income, this form must be filed within 90 days after the final determination. A claim for refund must be filed within three years of the due date of the original return, including extensions. When this form is added to the return, the amounts on Form 500 will show in both the original amount column and the corrected amount column. Make changes as necessary throughout the rest of the return and the new amounts will flow to the corrected amount column. This amended return may be filed electronically by selecting it in the transmission screen (Ctrl+T).
Use the Form 500D Worksheet to calculate the estimated tax payments to be made for the following tax year. Estimated tax payments are required if the corporation expects to have a Maryland tax liability for the year in excess of $1,000. Estimated payments of at least 90% of the current year tax or 110% of the prior year tax must be paid to avoid interest and or penalty. Four payments of 25% of the estimated tax are due on the fifteenth day of the fourth, sixth, ninth, and twelfth months of the tax year. CrossLink calculates the due date and payments based on the tax year beginning date of the tax year provided on the Client Data screen and the estimated taxable income provided. Estimated tax payments may be made electronically by selecting the desired payment on the transmit screen (Ctrl+T).
Use Form 500E to request an automatic extension of up to seven months from the original due date to file Form 500. This form must be filed by the due date of the original return. If no payment is due with this extension, it must be filed electronically thorough CrossLink by selecting it in the transmit screen (Ctrl+T), online at www.marylandtaxes.com, or by Telefile by calling 410-260-7829 in central Maryland or 1-800-260-3664 elsewhere. If a payment of $10,000 or more is due, this extension must be filed electronically through CrossLink, or by electronic funds transfer (register at www.marylandtaxes.com).
Every partnership, limited liability company treated as a partnership for federal purposes, and S corporation organized or licensed in Maryland must file Form 510, even if it is inactive or has no taxable income. Every other pass-through entity subject to Maryland income tax law with income or losses attributable to sources within Maryland also must file Form 510. Multistate pass-through entities operating in Maryland but not subject to Maryland income tax law are not required to file Form 510.
Form 510 is due by the fifteenth day of the third month following the end of the tax year for S corporations, or by the fifteenth day of the fourth month for all other pass-through entities.
An amended Form 510 can be filed electronically by checking the amended box and selecting the amended return in the transmit window (Ctrl+T).
Schedule A appears as a separate form in CrossLink. This schedule will not print separately, but will instead print as the applicable page of Form 510. This schedule may display a “Form Imported or Not Supported” error when attempting to print “Current Form Only”, but this is the expected behavior.
Worksheets are provided to list the type of transaction, name and FEIN of the related party receiving the income, and the amount for related party transactions. Disallowed deduction information should be entered on the worksheet provided for addition adjustments. Subtraction adjustment information should be reported on its respective worksheet for income reported as both an addition modification on this return and as an addition modification on the state return of the related party.
A worksheet is provided for recording the addition and subtraction information that will be allocated to the members on their respective Form 510 Schedule K-1 worksheets. These adjustments are calculated from the federal return and the Financials - Income Statement in the general section of the return. Space is provided for other additions and subtractions, if necessary.
A worksheet is provided for pass-through entities electing to use the distributable cash flow method to limit the nonresident tax payable. Check the box and enter the requested information on the worksheet. When the box is checked, the limitation shown will be compared to the total resident tax, and the lesser of the two will be recorded as the nonresident tax due. If the box is checked, the worksheet will be automatically included in the electronically filed return as a binary attachment.
Payments of estimated tax, amounts paid with an extension, and prior year overpayment credited to the state of Maryland will flow from the State Taxes Paid Worksheet on the Financials - Income Statement when the state ID entered is “MD”. Payments made by pass-through entities on behalf of the corporation will flow from any Form 510 Schedule K-1 received present in the return.
This schedule will appear in the return and calculate from the data provided in the Multistate Allocation and Apportionment Information worksheet in the General section of the return. If the Multistate Allocation and Apportionment Information worksheet is not used, the allocation factor will be assumed to be 1.00000 throughout the return.
These tables will calculate based on the member information provided on the federal K-1s and found on the Form 510 Schedule K-1 worksheet for each member. These tables are used to calculate the member counts shown at the top of Form 510.
The Form 510 Schedule K-1 worksheet shows information for each member. This worksheet will be completed based on the federal K-1, Form 510, and Form 500CR information. If a non-resident individual member has elected to be included on the Form 510C composite return, check the box and complete the requested information.
Use the Form 510D Worksheet to calculate the estimated tax payments to be made for the following tax year. Estimated tax payments are required if the pass-through entity expects to have a Maryland tax liability for the year in excess of $1,000. Estimated payments of at least 90% of the current year tax or 110% of the prior year tax must be paid to avoid interest and or penalty. Four payments of 25% of the estimated tax are due the fifteenth day of the fourth, sixth, ninth, and twelfth months of the tax year for S corporations; the due dates for all other pass-through entities are the fifteenth day of the fourth, sixth, ninth, and thirteenth months. CrossLink calculates the due date and payments based on the tax year beginning date of the tax year provided on the Client Data screen and the estimated taxable income provided. Estimated tax payments may be made electronically by selecting the desired payment on the transmit screen (Ctrl+T).
Use Form 510E to request an automatic extension of up to seven months for S corporations or six months for all other pass-through entities from the original due date to file Form 510. This form must be filed by the due date of the original return. If no payment is due with this extension, it must be filed electronically thorough CrossLink by selecting it in the transmit screen (Ctrl+T), online at www.marylandtaxes.com, or by Telefile by calling 410-260-7829 in central Maryland or 1-800-260-3664 elsewhere.
Use Form 500CR to claim or pass through Maryland business tax credits. This form may only be filed electronically. The credits in Parts A, B, D, E, J, K, L, N, O, P, Q, R, S, T, U, and V all require certification forms that must be attached as a PDF to the return when filed. This form is maintained in the Maryland individual module, so the most current version of that module is required.
Form 500DM is used to calculate income differences due to federal provisions with which Maryland has decoupled. Bonus depreciation and Section 179 expense in excess of $25,000 are not allowed for Maryland purposes. Line 2 of this form is not to be completed by corporate taxpayers, as the net operating loss must be recalculated including the decoupling adjustments on a worksheet for Form 500. This form is maintained in the Maryland individual module, so the most current version of that module is required.
Form 500MC must be filed by all multistate manufacturing corporations with more than 25 employees. This form compares the single-factor apportionment formula currently required on Schedule A for these corporations with the three-factor formula previously required.
Form 500UP is used to calculate the interest and penalty due for failure to pay the required estimated tax when due. Payments of estimated tax and prior year overpayment credited to the state of Maryland will flow from the State Taxes Paid Worksheet on the Financials - Income Statement when the state ID entered is “MD”. A detailed worksheet that accommodates multiple payments for a single installment is provided.
Use Form 502S to claim or pass through a Sustainable Communities Tax Credit. A copy of the approved Certification Application must accompany any return on which this credit is claimed. This form must be electronically filed for a corporation to claim the credit or for a pass-through entity to pass it to its members. This form is maintained in the Maryland individual module, so the most current version of that module is required.
Use Form 510C to file on behalf of nonresident individual members who elect to be included. This composite return may be used in lieu of individual nonresident Maryland returns. Use the Schedule 510 K-1 Worksheet to indicate which members are to be included in this filing and to provide information required to calculate each member’s tax. This return must be mailed to the state; the filing must include Form 510, Schedule B, Part I for individuals, and a copy of the Form 510 Schedule K-1 worksheet issued to each included member by the pass-through entity.
Use this schedule to record information on a Form 510 Schedule K-1 received by the filing entity. This form is required to claim nonresident tax paid by a pass-through entity on behalf of the entity filing the return, and is included in the electronic return. This form is maintained in the Maryland individual module, so the most current version of that module is required.
The Maryland Declaration for Business Electronic Filing is used to initiate electronic filing of the tax return and to schedule an electronic funds withdrawal of the balance due for all filers or direct deposit of the refund for corporate filers, if desired. Complete this form, including signatures, and retain it for a period of three years along with your filing record. DO NOT MAIL this form to the state unless specifically requested to do so.