Maryland Maryland Subtraction for Income Derived within an Entertainment District

Maryland Subtraction for Income Derived within an Entertainment District
Tax Year 2023 502AE Subtraction For Income Derived Within Arts and Entertainment District(s)
MARYLAND
FORM

502AE

2023

SUBTRACTION FOR
INCOME DERIVED
WITHIN ARTS AND
ENTERTAINMENT
DISTRICT(S)

Print using blue or black ink only.

ATTACH TO FORM 502 OR FORM
505.

First name	

MI	

Last name	

Social Security Number

Spouse’s first name	

MI

Last name	

Social Security Number

Street address

City or Town	

State	

ZIP code + 4

PART A - Qualifying Residing Artist
1. Name of qualifying residing artist
2. Name of arts and entertainment district(s)
3. Address of residential real property owned or rented in Maryland
4. Trade name and business address in arts and entertainment district(s)
5. Nature of business conducted in arts and entertainment district(s)

PART B - Income Derived Within Arts and Entertainment District(s)
6. Source of income derived within arts and entertainment district(s) for which subtraction is being claimed
7. Amount of subtraction claimed for income derived within arts and entertainment district(s)
(Include this amount on line dd of Form 502SU or line dd of Form 505SU.). . . . . . . . . . . . . . . 7.

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00

MARYLAND
FORM

502AE

2023

SUBTRACTION FOR INCOME
DERIVED WITHIN ARTS AND
ENTERTAINMENT DISTRICT(S)
INSTRUCTIONS
not qualify for the subtraction; or

GENERAL INSTRUCTIONS
Who May File
A qualifying residing artist may claim a subtraction for income
derived from the sale, publication, production or performance of an
artistic work within an arts and entertainment district, if the artist
created that artistic work within any arts and entertainment district.
The subtraction is only available to individuals. The subtraction
is available to a single-member limited liability company whose
member is an individual.
Required Attachments
You must attach to your Maryland return a completed Form 502AE.
Qualifying Guidelines
To qualify for the subtraction, you must be a qualifying residing
artist. A qualifying residing artist means an individual who:
1. 	 Owns or rents residential real property in Maryland;
2. 	 Conducts a business in any arts and entertainment district;
and,
3. 	 Derives income from the sale, publication, production or
performance within any arts and entertainment district of an
artistic work that the individual created, wrote, composed or
executed, either solely or with one or more other individuals,
in any arts and entertainment district.
Artistic work - means an original and creative work, whether created,
written, composed, or executed, that falls into one of the following
categories:
1.	 A book or other writing;
2.	 A play or performance of a play;
3.	 A musical composition or the performance of a musical 		
composition;
4.	 A painting or other picture;
5.	 A sculpture;
6.	 Traditional or fine crafts;
7.	 The creation of a film or the acting within a film;
8.	 The creation of a dance or the performance of a dance;
9.	 The creation of original jewelry, clothing, or design; or
	10.	 Any product generated as a result of any of the categories 		
		 listed above.
Artistic work does not include any piece or performance created or
executed for industry-oriented or industry-related production such
as a commercial or advertising copy.
Artistic work does not include tailoring services, clothing alterations
or jewelry repair.
Arts and Entertainment District - means an area designated by
the Secretary of the Maryland Department of Commerce as an arts
and entertainment district.

	•		 Sold outside any arts and entertainment district does not
qualify for the subtraction.
B.	 Income received by an artist from internet, mail order and
catalog sales of artistic work shipped from within a district
qualifies for the subtraction, if the artist created the artistic
work within any district.
C.	 Income in the nature of royalties, licenses or other future
revenues from the sale of reproduction or publishing rights
does not qualify for the subtraction.
Production and Performance of Artistic Work
A.	 Income that an artist earns from a musical performance, the
performance of a play or dance, the showing of a film produced
within the district by the artist, or acting in a film within the
district qualifies for the subtraction.
B.	 Income that an artist earns from a musical performance,
the performance of a play or dance, the showing of a film, or
acting in a film outside the district does not qualify for the
subtraction.
C.	 Income that an artist earns from the creation, choreography,
composition, or production of a play, dance, music, or film
within the district qualifies for the subtraction.
D.	 Income that an artist earns from the creation, choreography,
composition, or production of a play, dance, music, or film
outside the district does not qualify for the subtraction.
E.

Income received by an artist from the internet broadcast
of an artistic work from within the district qualifies for the
subtraction.

F.

Income in the nature of royalties, licenses, or other future
revenues from the creation or choreography of a play or dance,
the composition of music, or the production of a film does not
qualify for the subtraction.

Part A - Qualifying Residing Artist
Line 1 -	 Enter the individual’s name who is the qualifying residing
artist.
Line 2 -	 Enter the official name(s) of the arts and entertainment
district(s) in which the qualifying artist conducts a
business.
Line 3 -	 Enter the Maryland address of the residential real property
owned or rented by the qualifying residing artist. Do not
enter a mailing address, such as a post office box
or rural box number.
Line 4 -	 Enter the trade or business name, if any, and the business
address in the arts and entertainment district(s). Do not
enter a mailing address, such as a post office box
or rural box number.
Line 5 -	 Provide a brief description of the artistic work and the
business activities conducted in the arts and entertainment
district(s).

SPECIFIC INSTRUCTIONS

Part B -	Income Derived within Arts and Entertainment
District(s)

In determining the amount of income allowed as a subtraction, the
following rules shall apply:

Line 6 -	 Provide a brief description of the business transactions
generating the income that qualifies for the subtraction.

Sale and Publication of Artistic Work
A.	 Income that an artist earns from the sale or publication of
artistic work:
	•		 Created within any arts and entertainment district and
sold within any arts and entertainment district qualifies
for the subtraction;
	•		 Created outside any arts and entertainment district does
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Line 7 -	 Enter the amount of the income, to the extent included
in federal adjusted gross income, derived within arts and
entertainment district(s) that qualifies for the subtraction.
Include this amount on line dd of Form 502SU or line dd
of Form 505SU.
For more information, visit marylandtaxes.gov or email your
question to [email protected]. You may also call 1-800638-2937 or from Central Maryland 410-260-7980.