Maryland Maryland Income Tax Form Instructions for Corporations

Maryland Income Tax Form Instructions for Corporations
Tax Year 2023 Corporate Booklet
MARYLAND

2023

Instructions for filing corporation income tax returns

for calendar year or any other tax year or period beginning in 2023.

Brooke E. Lierman, Comptroller

Maryland Corporation Taxpayers

NON- REFUNDABLE TAX CREDITS

This booklet contains the necessary instructions for a
corporation to file a Maryland corporation income tax return for
tax year 2023. Read the instructions carefully.
Use blue or black ink when completing your forms and checks.
To avoid delays in the processing of your return:
•	

Do not use pencil or ink of any other color.

•	

Do not print returns on colored paper.

•	

Do not write on, staple or punch holes in the barcode.

S corporation instructions are not included in this booklet. S
corporations, partnerships, limited liability companies and
business trusts must use the Pass-Through Entity tax return,
Form 510, or Pass-Through Entity Election Income Tax Return,
Form 511.

PART

Enterprise Zone Tax Credit**

A

Maryland Disability Employment Tax Credit**

C

Job Creation Tax Credit**

D

Community Investment Tax Credit**

E

Businesses That Create New Jobs Tax Credit

F

Cybersecurity Incentive Tax Credit for Buyers
of Cybersecurity Technology or Cybersecurity
Services**

H-II

Employer-Provided Long-Term Care Insurance
Tax Credit

I

FEDERAL Security Clearance Costs Tax Credit

Manufacturing corporations are subject to a special single
factor formula of receipts. The rules for calculating this single
factor can be found in Maryland Tax Regulation 03.04.03.10.

Maryland Employer Security Clearance Costs Tax
Credit**

J-I

Direct Deposit of refunds is available for all corporations.

First Year Leasing Costs Tax Credit for Qualified
Small Businesses**

J-II

New for 2023

Research and Development Tax Credits for
Businesses Not Certified as a “Small Business”**

K-I

Addition Modifications:

Commuter Tax Credit**

M

Work Opportunity Tax Credit

O

Subtraction Modifications: There are no new subtraction
modifications.

Non-Refundable One Maryland Economic
Development Tax Credit** See 500CR Instructions

P

Tax Credits:

RESERVED

Q

Senate Bill 721, Acts of 2023: This bill restarts the Federal
Security Clearance Costs tax credit for tax years beginning
after Dec. 31, 2022, but only for individuals or corporations
that employ 500 or fewer employees.

Energy Storage Systems Tax Credit**

R

Automated External Defibrillator Tax Credit For
Restaurants

T

Senate Bill 968, Acts of 2023: This bill alters the definition
of "captive REIT" for the purpose of the dividend addback.

House Bill 584, Acts of 2023: This bill indefinitely extends
the Food Donations by Qualified Farms tax credit. The credit
amount is increased: 100% of the value of donated fresh farm
products (increased from 50%), and 100% of the value of
donated certified organic produce (increased from 75%).

Endow Maryland Tax Credit**

V

Preservation and Conservation Easements Tax
Credit**

X

Apprentice Employee Tax Credit**

Y

Qualified Farms Tax Credit**

Z

House Bill 1074 / Senate Bill 624, Acts of 2023: This new
nonrefundable income tax credit is available to an individual
or business entity that owns a restaurant in Maryland with
annual gross income of at least $400,000 and purchases one
or more FDA-approved automated external defibrillator.

RESERVED

AA

Endowments of Maryland Historically Black Colleges
and Universities Tax Credit**

BB

Senate Bill 968, Acts of 2023: This bill alters the definition
of "captive REIT" for the purpose of the dividend addback.

REFUNDABLE TAX CREDITS

Form 500CR

Small Business Relief Tax Credit**

B

Catalytic Revitalization Projects and Historic Revitalization Tax Credit**

G

Electronic Format In accordance with SB 36 of the Acts of
2018 of the Maryland General Assembly, the Comptroller of
Maryland may grant a taxpayer a waiver of the requirement to
file for certain tax credit(s) by electronic means. Form
500CRW, Request for a Waiver, must be submitted with
the Form 500CR that establishes a reasonable cause for not
filing by electronic means or that there is no feasible means of
filing electronically creating an undue hardship.
Tax-exempt organizations Organizations that are tax
exempt under Internal Revenue Code 501(c)3 may be eligible
to claim certain business tax credits against their withholding
taxes. These qualified organizations no longer use Form
500CR, but will use Form MW508CR as an attachment to Form
MW508 (Annual Employer Withholding Reconciliation Return).
See Administrative Release 34.

Innovation Incentive Tax Credit for Investors
in Innovation**

H-I

Research and Development Tax Credits for
Businesses Certified as a “Small Business”**

K-II

Biotechnology Investment Incentive Tax Credit**

L

RESERVED

N

Refundable One Maryland Economic Development
Tax Credit** See 500CR Instructions

P

More Jobs for Marylanders Tax Credit **

S

Film Production Activity Tax Credit**

U

Theatrical Production Tax Credit**

W

Heritage Structure Rehabilitation Tax Credit from
Form 502S

Form 500CR is used to claim the following business tax credits
against corporation and individual income tax. See the
instructions for more information about these tax credits.

PART

DDD

**Required Certification must be included with Form
500CR or 502S.

i

Tax exempt organizations which qualify for business tax credits
against their withholding tax should use Form MW508CR to
claim the tax credit on Form MW508.
Credits that have expired:
•	

Clean Energy Incentive Tax Credit**

•	

Oyster Shell Recycling Tax Credit

Filing electronically
The State of Maryland participates in the Federal/State
Modernized e-File program to file Maryland Corporation and
Pass-Through Entity returns electronically. For the list of
Software Vendors approved for e-filing Maryland returns or
for additional program information, visit marylandtaxes.gov.
You may also contact our e-File Helpdesk by emailing efil@
marylandtaxes.gov or calling 410-260-7753.
Forms and help
For online business registration, tax forms, instructions,
publications, and Maryland Tax Regulations, visit
marylandtaxes.gov.
E-mail your tax questions to: [email protected].
For assistance, call: 410-260-7980 in Central Maryland, or
1-800-MDTAXES (1-800-638-2937) from elsewhere.

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MARYLAND
FORM

500

2023

CORPORATION INCOME TAX
RETURN INSTRUCTIONS

GENERAL INSTRUCTIONS

•	 Nonprofit organizations that are exempt from taxation
under IRC Section 501, except those with taxable income for
federal purposes, such as unrelated business taxable income
or exempt function income under IRC Section 527.

FILING FORM 500
Form 500 must be filed electronically if the corporation plans
to claim a business income tax credit from Form 500CR or the
Heritage Structure Rehabilitation Tax Credit from Form 502S.

	 Under Section 501, a variety of organizations, generally
nonprofit groups organized for charitable or mutual benefit
purposes, are exempt from income taxation. However, it may
be subject to income tax if it has income from the operation of
a business not related to the purpose for which they received
their exemption.

PURPOSE OF FORM Form 500 is used by a corporation and
certain other organizations to file or to amend an income tax
return for a specific tax year or period.
NOTE: S corporations must use Form 510 — Maryland PassThrough Entity Income Tax Return, or Form 511 - Pass-Through
Entity Election Income Tax Return.

1

	 The same tax treatment afforded for federal income tax
purposes is afforded for Maryland income tax purposes.
Income that is taxable for federal purposes also is taxable for
Maryland purposes. Exempt corporations with federal taxable
income must file Form 500 to report the income and pay the
tax.

WHO MUST FILE?

TAXPAYERS REQUIRED TO FILE Every Maryland corporation
must file an income tax return on Form 500, even if it has no
taxable income or if the corporation is inactive. Every other
corporation that is subject to Maryland income tax law and has
income or losses attributable to sources within Maryland also
must file Form 500.

	 Whether or not required to file Form 500, nonprofit
organizations operating in Maryland that are subject to federal
exempt-status notification requirements must register with
the Maryland Revenue Administration Division. To register, an
authorized official must submit a letter of request accompanied
by a copy of the Internal Revenue Service (IRS) determination
of tax-exempt status.

Corporations operating in Maryland and in one or more other
states are subject to Maryland income tax if their Maryland activity
exceeds the provisions for federal protection from state taxation.
U.S.C.A. Title 15, Section 381 of the Interstate Commerce Tax
Act (P.L. 86-272) prescribes the extent of business activity
required before states may impose income taxes.

	 Other agencies such as the State Executive Department Secretary of State, State Department of Assessments and
Taxation and Attorney General’s Office each has its own
specific requirements for nonprofit organizations.
•	Investment conduits such as a Regulated Investment
Company (RIC), and a Real Estate Mortgage Investment
Conduit (REMIC), except those with taxable income for federal
purposes. Investment conduits with such taxable income
must file Form 500 reporting the taxable income. Real Estate
Investment Trust should see Special Requirements For Certain
Organizations.

A multistate corporation that operates in Maryland but is not
subject to the Maryland income tax law is not required to file,
although a return reflecting an apportionment factor of zero may
be filed for record purposes. Letters in lieu of filing will not be
accepted.
All financial institutions are subject to corporation income tax
and have special apportionment rules. See Code of Maryland
Regulations (COMAR) Chapter 03.04.08.

•	Individual retirement account (IRA) trusts that are
exempt from taxation under IRC Section 408 (e)(1), except
those with taxable income for federal purposes. IRA trusts
with such taxable income must file Form 504 reporting the
taxable income.

ORGANIZATIONS EXEMPT FROM FILING The following
organizations are not subject to the Maryland corporation income
tax and are exempt from filing an income tax return on Form
500, except as specified:
•	 Pass-through entities defined as partnerships in IRC
Section 761, S corporations in IRC Sections 1361 and 1362,
Limited Liability Companies (LLC) in Maryland Corporations
and Associations Article Section 4A-101 and business trusts in
Maryland Corporation and Associations Article Section 12-101.

•	Insurance companies within the meaning of the Insurance
Article, Annotated Code of Maryland, Managed Care
Organizations and Health Maintenance Organizations are
subject to the insurance company premium tax. Insurance
companies must contact the Maryland Insurance Administration
regarding filing requirements and taxation.

	 LLCs and Business Trusts are treated as partnerships for
Maryland income tax purposes, unless they are treated as
corporations for federal income tax purposes.

•	Common trust funds as defined in the Maryland Financial
Institutions Article Section 3-501(b).
•	Fiduciary taxpayers must file an income tax return on Form
504. Fiduciaries who are an Electing Small Business Trust
(ESBT) are taxable by Maryland. See Form 504 Instructions
for more information.

	 Pass-through entities must file an income tax return on Form
510 or Form 511. Additionally, each member must file an
income tax return.
	 An S corporation that is subject to federal income tax at the
corporate level, also is subject to Maryland corporation income
tax and Form 500 must be filed.

SPECIAL REQUIREMENTS FOR CERTAIN ORGANIZATIONS
•	Affiliated corporations that file consolidated federal
returns must file separate Maryland returns for each member
corporation. Each member corporation must file and report
the taxable income or loss on a separate basis, without
regard to the consolidation for federal income tax purposes.
Consolidation adjustments reported for federal purposes are
not allowed for Maryland purposes.

	 Maryland will follow the IRS rules for a single member LLC
that is disregarded as a separate entity (“check-the-box”) and
certain partnerships that do not actively conduct a business
and have elected not to be treated as a partnership.
	 For additional information regarding the taxation and filing
requirements of pass-through entities, see the instructions
provided with Form 510 and Form 511.

•	Qualified Sub-S Subsidiaries are treated as divisions by the
IRC and are not considered as separate entities for Maryland
purposes. These divisions will be included on the parent
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MARYLAND
FORM

500

2023

CORPORATION INCOME TAX
RETURN INSTRUCTIONS

company’s annual Maryland return.

filed within three years from the date the original return was filed
or within two years from the date the tax was paid, whichever is
later. An original return filed before the due date is considered to
have been filed on the date it was due. The following exceptions
apply:

•	A Real Estate Investment Trust (REIT) is subject to the
Maryland income tax when the REIT has taxable income at
the federal level, as computed on Federal Form 1120-REIT. A
Captive REIT may also have a Maryland income tax liability
even if that entity does not have a federal income tax liability
on its federal return.

•	 A claim for refund filed within 3 years after the date of filing
the original return is limited to the amount paid within the
3 years plus any extension of time for filing the return,
immediately preceding the filing of the claim.

A Captive REIT is a corporation, trust, or association that:
•	Is considered a REIT for the taxable year under IRC Section
856;

•	 A claim for refund filed after 3 years, but within 2 years from
the date the tax was paid is limited to the amount paid within
the 2 years immediately before filing the claim.

•	Is not regularly traded on an established securities market;
and

•	 A claim for refund based on a federal NOL carryback must be
filed within 3 years after the due date (including extensions)
of the return for the tax year of the NOL.

•	More than 50% of the voting power or value of the beneficial
interests or shares of which, at any time during the last half of
the taxable year, are owned or controlled (directly or indirectly)
by a single entity that is a C corporation.

•	 If the Internal Revenue Service (IRS) issues a final
determination of adjustments that would result in an increase
to Maryland taxable income, file the amended return within
90 days after the final determination.

A Captive REIT does not include:
• A real estate investment trust that is intended to become
regularly traded on an established securities market; or

•	 If the IRS issues a final report of adjustments that would
result in a decrease to Maryland taxable income, file the
amended return within 1 year after the final adjustment
report or the final court decision, if appealed.

• A corporation, trust, or association of which more than 50% of
the voting power or value of the beneficial interests are owned
directly or indirectly by:

•	If the claim for refund or credit for overpayment resulted
from a final determination made by an administrative board
or an appeal of a decision of an administrative board, that is
more than 3 years from the date of filing the return or more
than 2 years from the time the tax was paid, the claim for
refund must be filed within 1 year of the date of the final
decision of the administrative board or final decision of the
highest court to which an appeal of the administrative board
is taken.

• Another non-captive REIT;
• A nonprofit entity;
• A listed Australian property trust, or an entity organized as
a trust in which a listed Australian property trust owns or
controls, directly or indirectly, 75% or more of the voting
power or value of the beneficial interests or share of the trust;
or
• A qualified foreign entity. A qualified foreign entity is a
corporation, trust, association, or partnership that is organized
under the laws of a foreign government with which the United
States government has a treaty, and:

Note: Changes made as part of an amended return are subject
to audit for up to three years from the date the amended return
is filed. For more information regarding refund limitations, see
Administrative Release 20. The returns must be filed with the

• At least 75% of the total assets of the entity at the close of
the entity’s taxable year are represented by real estate assets,
cash and cash equivalents;

Comptroller of Maryland
Revenue Administration Division
110 Carroll Street
Annapolis, MD 21411-0001

• Is not subject to tax on amounts distributed to the entities
beneficial owners or is exempt from entity-level taxation;
• Distributes at least 85% of the taxable income of the entity
annually; and

Corporations and organizations that are afforded a later due date
for federal returns under the Internal Revenue Code (IRC) are
afforded the same due date for Maryland income tax returns.

• Of which not more than 10% of the voting power of the entity
is owned or controlled directly or indirectly by a single entity or
individual or the shares are regularly traded on an established
securities market.

3

Form 500 must be signed by a duly authorized corporate officer.
Preparers, other than corporate employees, also must print
name and sign the return.

A Captive REIT is required to report a Maryland addition
modification for the amount of its federal dividends paid
deduction.

If a return is filed by a fiduciary, the fiduciary must print name
and sign the return and attach verification of the authority to do
so. See Instruction 9 - Signatures and Verification

Manufacturing Corporations are subject to a special single
factor formula of receipts. The rules for calculating the single
factor can be found in Code of Maryland Regulations (COMAR)
03.04.03.10.

2

SIGNATURES REQUIRED

4

WHEN AND WHERE TO FILE

GENERAL INFORMATION FOR FORM 500

Accounting Periods The tax year or period used for the federal
return must be used for the Maryland return. Accordingly,
calendar tax years, fiscal tax years, 52-53 week tax years, and
short tax periods may be necessary for Maryland filing purposes.

File the original Form 500 by the 15th day of the 4th month
following the close of the tax year or period, or by the original
due date required for filing the federal return.

A Maryland return must be filed for each reporting period for
which a federal return is filed or required. The form used for filing

Generally, a claim for a refund or overpayment credit must be
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500

2023

CORPORATION INCOME TAX
RETURN INSTRUCTIONS

must reflect the preprinted tax year in which the corporation’s
tax year begins.

carryback year.
The federal provisions for carryback and carryforward apply
for purposes of the Maryland return unless you are following
certain provisions of the Internal Revenue Code (IRC) from
which the State of Maryland has decoupled, including certain
special depreciation allowances and 2-year carryback provisions
(farming loss only). If an election to forgo a carryback is made,
a copy of the federal election must have been included with the
Maryland return for the loss year.

In a 52-53 week tax year, Maryland follows federal treatment as
to effective dates or the applicability of any provision expressed in
terms of tax years beginning, including or ending with reference
to a specified date.
Use of Federal Figures In preparing Form 500, all items
reported for federal purposes must be reported on the Maryland
return in the same manner. The character of an item cannot be
changed from that required or elected for federal purposes.

An addition modification may be required in a carryback or
carryforward year if the total Maryland addition modifications
exceed the total Maryland subtraction modifications in the loss
year (NAM or net operating loss modification recapture).

Copy of Federal Return Required A copy of the actual federal
income tax return through Schedule M2 as filed with the IRS for
the corresponding tax period must be attached to Form 500. The
Maryland filing will not be complete unless the required federal
copy is attached.

The required addition modification represents a recapture of
the excess additions over subtractions and generally is equal
to the lesser of the NOL deduction in the carryback year or the
net addition modification in the loss year. For more information
regarding net addition modification, refer to Administrative
Release 18.

Corporations included in a consolidated filing for federal income
tax purposes must file separate returns for Maryland purposes
and attach a copy of the actual consolidated federal return
through Schedule M2 to each Maryland filing. Each Maryland
filing also must include a copy of the columnar schedules of
income and expense and of balance sheet items (which are
required for the federal filing), reconciling the separate items of
each member corporation to the consolidated totals.

NET CAPITAL LOSSES. If a net capital loss carryback is used
to reduce federal taxable income, an addition modification is
required for the amount of the income reduction.
The federal special deduction for dividends is treated as
a current year deduction. It is deducted from federal taxable
income before application of the net operating loss deduction.
The deduction reduces taxable income and may create a net
operating loss.

Taxable Income The starting point for Form 500 is taxable
income as developed for the federal income tax return after
special deductions for dividends. (See “Specific Instructions” for
line 1a and 1b.) No modification of the federal net operating
loss or special deductions is allowed under Maryland income
tax law except in the case of a Foreign Dividend Subtraction
Carryforward (FDSC), decoupling modifications, and Section 10306.1 related party transactions.

If an affiliated group of corporations files a consolidated
return for federal purposes, each member corporation must
calculate any net operating loss and special deductions based
on its separate federal taxable income and loss. The deductions
must be calculated in strict accordance with federal income tax
provisions, as if the member corporation is not involved in a
consolidated filing and files a separate return with the IRS.

The federal net operating loss deduction effectively is allowed
for the Maryland filing by using federal taxable income. The
federal provisions for carryback and carryforward also apply
for purposes of the Maryland return unless you are following
certain provisions of the Job Creation, Worker Assistance Act of
2002, the American Recovery and Reinvestment Act of 2009. If
an election to forgo a carryback is made, a copy of the federal
election must have been included with the Maryland return for
the loss year.

Maryland modified income is federal taxable income
after statutory addition and subtraction adjustments and/or
modifications. For a list of the statutory addition and subtraction
adjustments and modifications, see Specific Instructions.
Maryland apportioned income is applicable only for multistate
corporations and is developed by applying the apportionment
factor to Maryland modified income. For an explanation of
apportionment provisions, see Instructions for Schedule A –
Computation of Apportionment Factor.

For the tax year in which a net operating loss occurs, that
current operating loss is used to offset Maryland modifications.
If the total of addition modifications exceeds the total
subtraction modifications in the tax year of the net operating
loss, a modification to recapture the excess of additions over
subtractions is required when claiming the corresponding net
operating loss deduction. For more information, see Section 10205 of the Maryland Tax-General Article.

Maryland taxable income is federal taxable income
after statutory adjustments, modifications, and applicable
apportionment.
Maryland Business Income Tax Credits For information
about credits against the tax, see Specific Instructions for lines
15c and 15d or the instructions provided for Form 500CR Maryland Business Income Tax Credits. Form 500CR Instructions
are available online at marylandtaxes.gov. You must file Form
500CR electronically to claim a business income tax credit.

NET OPERATING LOSS DEDUCTIONS. The NOL for Maryland
purposes is the federal net operating loss. No modification of
the federal NOL is allowed under Maryland income tax law except
in the case of a foreign source dividend subtraction. For more
information about foreign source dividend subtractions, refer to
Administrative Release 18.

Tax, Interest and Penalty The tax rate is 8.25%. The
annual rate of interest charged for taxes owed to the State is
9.0% from 01/01/23 through 12/31/23. The annual interest
rate after 12/31/23 is 10.0075%. For more information, visit
marylandtaxes.gov.

A corporation included in a consolidated federal filing must use
its separate federal NOL. An NOL should be entered on line 5 on
Form 500 but may not be used to reduce line 6 to less than zero.
Note: For 2020, Maryland has decoupled certain provisions
from the CARES Act. For more information, see Tax Alert
7-24 at marylandtaxes.gov.

A penalty is applicable for late filing of tax returns and/or late
payment of any taxes due. Additional penalties are applicable for
the filing of false, fraudulent or frivolous returns and civil and/or
criminal fines and imprisonment may apply.

Generally, the carryback of an NOL does not change the
previously reported addition or subtraction modifications in a
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FORM

500

2023

CORPORATION INCOME TAX
RETURN INSTRUCTIONS

In the case of delinquent taxes, the State will record a lien and
judgment and proceed with legal action as necessary to effect
collection of the balance due.

5

the assessment or denial of the refund.
Failure to file a written request or attend the informal hearing
will result in the assessment or denial of refund becoming final
and non-appealable.

OTHER MATTERS

You may file an appeal with the Maryland Tax Court within 30
days of a final determination by the Compliance Division hearing
officer.

Extension of Time to File If unable to file Form 500 by the
due date, a corporation must submit Form 500E - Maryland
Application for Extension to File Corporation Income Tax Return.
Maryland law provides for an extension of time to file, but in no
case can an extension be granted for more than seven months
beyond the original due date.

Amended Return Form 500X has been combined with
Form 500. To correct an error in previously filed returns, check
the amended return box on page 1 and complete the entire
return (where applicable) including the amended figures. Attach
copies of the documents required and filed with the IRS. If the
corrections affect only the Maryland return and not items of
federal taxable income, include a thorough explanation of the
changes.

The request for extension of time to file will be granted for seven
months, provided that:
1) The application is properly filed and submitted by the 15th
day of the 4th month following the close of the tax year or
period, or by the original due date required for filing of the
federal return; and

Each affected member of a consolidated federal filing also must
include a schedule reconciling the amendments of each member
corporation to the consolidated totals.

2)	Full payment of any balance due is submitted with the
application.

Federal income tax law provides for certain capital loss carryback
and carryforward. Any carryforward effectively is allowed when
reporting federal taxable income on the Maryland return.
Except as specifically decoupled from the CARES Act. For more
information, see Tax Alert 7-24 at marylandtaxes.gov. Do not
attach amended returns to an original corporation income tax
filing.

The application extends only the time allowed to file the annual
income tax return and not the time allowed to pay the tax.
For additional information regarding extensions of time to file,
see the instructions provided with Form 500E.
Estimated Income Tax Every corporation that reasonably
expects its Maryland taxable income to develop a tax in excess
of $1,000 for the tax year or period must make estimated
income tax payments with Form 500D - Maryland Declaration
of Estimated Corporation Income Tax. If the corporation is
required to make multiple payments it will use a Form 500D
for each of the additional payments. This form is available at
marylandtaxes.gov.

Amended return(s) must be filed electronically if the change is
related to a business income tax credit from Form 500CR.
NOTE: Changes made as part of an amended return are subject
to audit for up to three years from the date that the amended
return is filed.
Federal Adjustments If the items of federal taxable income
reported for any tax year or period are adjusted by the IRS
and will increase Maryland taxable income, an amended return
together with a copy of the final IRS adjustment report must be
submitted within 90 days.

Declaration of estimated income tax payments are due by the
15th day of the 4th, 6th, 9th and 12th months following the
beginning of the tax year or period. The total estimated tax
payments for the year must be at least 90% of the tax developed
for the current tax year or 110% of the tax that was developed
for the prior tax year. At least 25% of the total estimated tax
must be remitted by each of the four installment due dates.

Each affected member of a consolidated federal filing also must
include a schedule reconciling the separate adjustments of each
member corporation to the consolidated totals.
Refund Claims Generally, a claim for a refund (amended
return) must be filed within 3 years from the date the original
return was filed or within 2 years from the date the tax was paid,
whichever is later. A return filed early is considered filed on the
date it was due.

In the case of a short tax period, the total estimated tax required
is the same as for a regular tax year: 90% of the tax developed
for the current (short) tax year or 110% of the tax that was
developed for the prior tax year. The minimum estimated tax
for each of the installment due dates is the total estimated
tax required divided by the number of installment due dates
occurring during the short tax year.

If the claim for refund resulted from an IRS adjustment or final
decision of a federal court which is more than 3 years from the
date of filing the return or more than 2 years from the time the
tax was paid, a claim for refund must be filed within 1 year from
the date of the adjustment or final decision.

For additional information regarding estimated income tax, see
the instructions provided with Form 500D.
Audits and Appeals All items reported on Form 500 are subject
to audit, verification and revision, including items reported for
federal purposes. Returns and amendments are subject to audit
and adjustment for a period of 3 years from the date the return
was due (including extensions) or the date the return was filed,
whichever is later.

A claim for refund based on a federal net operating loss carryback
must be filed within 3 years after the due date of the return for
the tax year of the net operating loss.
Taxpayer Identification Required for Returns and Other
Documents All returns, correspondence, payments or other
documents must indicate the corporation name, Federal
Employer Identification Number (FEIN), type of tax and tax
year(s) to which the document relates.

In the event of revision and assessment or reduced refund, the
Comptroller will notify the corporation. If in disagreement with
the assessment or denial of the refund, the corporation may file
with the Compliance Division a written request for revision of the
assessment or reconsideration of the refund denial. The request,
in either case, must be made by submitting an application for an
informal hearing with the Compliance Division within 30 days of

All corporations are required to secure a FEIN from the IRS. The
FEIN is the number used by the IRS for processing purposes
and also is the primary number used by the Maryland Revenue
Administration Division.
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MARYLAND
FORM

500

2023

CORPORATION INCOME TAX
RETURN INSTRUCTIONS

The type of tax and tax year(s) are necessary to identify the
subject of the document and the intention of payments. This
information ensures that documents and payments are applied
to the correct account.

Complete the federal income tax return first and use it in
preparation of the Maryland return. After completing the Maryland
return, assemble your return in the following order: Form 500,
any required Maryland forms and their related attachments, any
Maryland Schedule K-1 (510/511) or other statements showing
credits claimed on corporation return, and the federal income tax
return through Schedule M2.

Use of Paid Preparers The Corporation is responsible for the
timely filing of returns, payment of tax, responding to requests
and all other requirements, even if a paid preparer is used.

NAME, ADDRESS AND OTHER INFORMATION

Substitute Forms You may file your Maryland income tax return
on a computer-prepared or computer-generated substitute
form provided the form is approved in advance by the Revenue
Administration Division. The fact that a software package is
available for retail purchase does not guarantee that it has been
approved for use.

Type or print the correct name and address in the designated
area. Enter the corporation name exactly as specified in the
Articles of Incorporation, or as amended, and continue with any
“Trading As” (T/A) name if applicable.
Enter the FEIN. If a FEIN has not been secured, enter “APPLIED
FOR” followed by the date of application. If a FEIN has not been
applied for, do so immediately.

For additional information or to see a list of Approved
Software Vendors for Maryland Substitute Tax Forms, visit
marylandtaxes.gov.

Enter the date of incorporation and the federal business
code number. The date of incorporation must be expressed
numerically, using two digits each for the month, the day and
the year. The Business Code is a six-digit number available from
the federal return which identifies the principal business activity.

Employer Withholding of Income Tax Employers that make
payments to individuals of salaries, wages, or compensation
for personal services must withhold income tax as prescribed
in published tables and remit the withholding to the Maryland
Revenue Administration Division with Form MW506 or MW506M
- Employer’s Return of Income Tax Withheld.

Check the applicable box if:
(1)	 The name or address has changed;

An annual reconciliation is required to be filed on Form MW508
- Annual Employer Withholding Reconciliation Return and
submitted with the state copy of the wage and tax statements
issued to the employees as required by law.

(2)	 This is an inactive corporation (in Maryland and elsewhere
– Do not check the box for inactive if the corporation is
inactive in Maryland but active elsewhere.);
(3)	 This is the first filing of the corporation;

For additional information regarding employer withholding tax,
contact the Taxpayer Services Division at 1-800-638-2937 or
from Central Maryland at 410-260-7980.

(4)	 This is the final return of a corporation that has dissolved,
liquidated or withdrawn from Maryland; or,

Privacy Notice The Maryland Revenue Administration Division
requests tax return information to administer the income tax
laws of Maryland, including the determination and collection of
the correct taxes and other amounts. Failure to provide all or
part of the requested information may result in the disallowance
of claimed amounts and an increased tax liability. In addition,
the law makes provision for securing information from taxpayers
that fail to supply required information, and a penalty may apply.

(5)	 This tax year’s beginning and ending dates are different
from last year’s due to an acquisition or consolidation.

8

LINE 1a - TAXABLE INCOME PER FEDERAL RETURN
Enter the taxable income before net operating loss and special
deductions from the federal return. This amount can be found on
line 28 of federal Form 1120, or line 25c of federal Form 1120-C.
Use a minus sign (-) in front of the number to indicate a loss.

Taxpayers have a right to access their tax records maintained
by the Revenue Administration Division, and may inspect,
amend or otherwise correct them. To obtain a copy, submit a
written request containing the corporation name, address and
identification number and specify the information needed. The
request must be signed by an authorized corporation officer.

Federal taxable income should include any add-back for any
charitable contribution from Line 19 of the federal Form 1120
that is over the federal charitable contribution limitation.

As authorized by law, information furnished to the Revenue
Administration Division may be given to the IRS, a proper official
of any state that exchanges tax information with Maryland, and
to an officer of this State having a right to the information in that
officer’s official capacity. Also, the information may be obtained
in accordance with a proper judicial or legislative order.

6

SPECIFIC INSTRUCTIONS

A corporation included in a consolidated filing for federal income
tax purposes must enter its separate federal taxable income,
calculated using federal law as if the corporation had filed
separately for federal purposes. Attach a copy of the actual
consolidated federal income tax return through Schedule M2 and
a schedule reconciling the income and expenses of each member
of the consolidated filing.

TAX YEAR OR PERIOD

LINE 1b – SPECIAL DEDUCTION PER FEDERAL RETURN

ENTER THE BEGINNING AND ENDING DATES IN THE SPACE
PROVIDED AT THE TOP OF FORM 500. The form used in filing
must reflect the preprinted tax year in which the corporation’s
tax year begins.

Enter the Special Deductions from federal Form 1120, line 29b or
Form 1120-C, line 26b. A corporation included in a consolidated
federal filing and claiming the special deductions must attach a
schedule detailing the deduction(s) on a separate return basis.

The same tax year or period used for the federal return must be
used for Form 500.

LINE 1c – FEDERAL TAXABLE INCOME BEFORE NET
OPERATING LOSS DEDUCTION

7

Subtract line 1b from line 1a. Enter the result in whole dollars.

ASSEMBLING AND COMPLETING YOUR RETURN

ADDITION ADJUSTMENTS
5

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CORPORATION INCOME TAX
RETURN INSTRUCTIONS

All entries must be entered as positive amounts.

CORPORATION

LINE 2a - SECTION 10-306.1 RELATED PARTY
TRANSACTIONS

Enter dividends received from a corporation if the receiving
corporation owns, directly or indirectly, 50% or more of the
paying corporation’s outstanding shares of capital stock and
the paying corporation is organized under the laws of a foreign
government.

Enter the amount of any disallowed deductions for related party
transactions in accordance with Section 10-306.1 of the Maryland
Tax-General Article.

This subtraction is limited to the amount of dividends included in
federal taxable income.

Attach a schedule listing the type of transaction, the name and
FEIN of the related party receiving the income, and the amount
of the transaction.

LINE 3d – DECOUPLING MODIFICATION SUBTRACTION
ADJUSTMENT

LINE 2b – DECOUPLING MODIFICATION ADDITION
ADJUSTMENT

If one or more of these apply, enter the total amount on line 3d
and identify each item using the code letter.

If one or more of these apply, enter the total amount on line 2b
and identify each item using the code letter.
	

	

CODE LETTER

J.	

E.	 Net addition modification to Maryland taxable income when
claiming the federal depreciation allowances from which the
State of Maryland has decoupled. Complete and attach Form
500DM. See Administrative Release 38.

K.	 Net subtraction modification to Maryland taxable income
when the federal special 2-year carryback (farming loss
only) period was used for a net operating loss under federal
law compared to Maryland taxable income without regard to
the federal provisions. Complete and attach Form 500DM.

F.	 Net addition modification to Maryland taxable income when
the federal special 2-year carryback (farming loss only)
period was used for a net operating loss under federal law
compared to Maryland taxable income without regard to the
federal provisions. Complete and attach Form 500DM.

CD.	Net subtraction modification to Maryland taxable income
resulting from the federal ratable inclusion of deferred
income arising from business indebtedness discharged by
reacquisition of a debt instrument. See Form 500DM.

CD.	Net addition modification to Maryland taxable income
resulting from the federal deferral of income arising from
business indebtedness discharged by reacquisition of a debt
instrument. See Form 500DM.

DM.	Net subtraction modification from multiple decoupling
provisions. See the table at the bottom of Form 500DM for
the line numbers and code letters to use.

DM.	Net addition modification from multiple decoupling
provisions. See the table at the bottom of Form 500DM for
the line numbers and code letters to use.

DP.	 Net subtraction decoupling modification from a PassThrough Entity. See Form 500DM.

DP.	 Net addition decoupling modification from a Pass-Through
Entity. See Form 500DM.
	

LINE 3e – TOTAL MARYLAND SUBTRACTION
ADJUSTMENTS TO FEDERAL TAXABLE INCOME

NOTE: Maryland has decoupled certain provisions
from the CARES Act. For more information, see Tax
Alert 7-24 at marylandtaxes.gov.

Add lines 3a through 3d; enter the result in whole dollars.
LINE 4– MARYLAND ADJUSTED FEDERAL TAXABLE
INCOME BEFORE NOL DEDUCTION IS APPLIED

LINE 2c – TOTAL MARYLAND ADDITION ADJUSTMENTS
TO FEDERAL TAXABLE INCOME

Subtract line 3e from the sum of lines 1c and 2c; enter the result
in whole dollars.

Add lines 2a and 2b. Enter the result in whole dollars.
SUBTRACTION ADJUSTMENTS

LINE 5 – ADJUSTED FEDERAL NOL CARRYFORWARD
AVAILABLE FROM PREVIOUS YEARS

All entries on lines 3a through 3e must be entered as positive
amounts.

The impact of the decoupling on the NOL Deduction is
not calculated on Form 500DM with the other decoupling
modifications. Instead, a pro forma or adjusted federal taxable
income is first computed to include the effect of the other
decoupling modifications, and then the pro forma or adjusted
federal NOL is applied to reduce the pro forma or adjusted federal
taxable income, to no less than zero. In a carryforward year,
enter the pro forma or adjusted amount on line 5 (as a positive
figure), entitled Adjusted Federal NOL Carryforward available
from previous tax years (including FDSC). See Administrative
Release 18 and CARES Act Tax Alert 7-24.

LINE 3a - SECTION 10-306.1 RELATED PARTY
TRANSACTIONS
Enter the amount of income reported on this return to the extent
included in the addition for disallowed related party transactions
on the Maryland tax return of the related party (line 2a), or, if
a similar addition modification is made on the related party’s
return filed in another state.
Attach a schedule listing the type of transaction, the name
and FEIN of the related party adding back the income on their
Maryland tax return, and the amount of the transaction.

LINE 6– MARYLAND ADJUSTED FEDERAL TAXABLE
INCOME

LINE 3b – DIVIDENDS FOR DOMESTIC CORPORATION
CLAIMING FOREIGN TAX CREDIT

•	If line 4 is less than or equal to zero, enter the amount from
line 4 on line 6.

Enter the amount included in the income of a domestic corporation
claiming a foreign tax credit as dividends under IRC Section 78
(foreign dividend gross-up).
LINE

3c

–

DIVIDENDS

FROM

RELATED

CODE LETTER
Net subtraction modification to Maryland taxable income
when claiming the federal depreciation allowances from
which the State of Maryland has decoupled. Complete and
attach Form 500DM. See Administrative Release 38.

•	If line 4 is both greater than zero and the amount on line 5,
subtract line 5 from line 4. Enter result on line 6.

FOREIGN

•	If line 4 is less than or equal to the amount on line 5, enter
6

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CORPORATION INCOME TAX
RETURN INSTRUCTIONS

zero on line 6.
All entries must be entered as positive amounts.

The amount of the total deduction for dividends paid that is
claimed by a Captive REIT on federal Form 1120-REIT. For more
information, see Section 10-306.2 of the Maryland Tax-General
Article.

LINE 7a - STATE AND LOCAL INCOME TAX

LINE 7f - OTHER ADDITIONS

Enter the total of all net income taxes and all other taxes based on
income that is imposed by any state or by a political subdivision
of any state and deducted on the federal return.

If one or more of these apply, enter the total amount
on line 7f and identify each item using the code letter.

MARYLAND ADDITION ADJUSTMENTS

Attach a schedule listing the type and amount of all taxes
deducted on the federal return. The schedule of taxes must
reconcile to the amount of tax expense reported on the federal
return.

	

CODE LETTER

A. 	 The oil percentage depletion allowance as deducted on
the federal return, under IRC Sections 613 or 613A. Other
depletion allowances that are provided for in Sections 613 or
613A are not required as an addition modification.

LINE 7b - DIVIDENDS AND INTEREST FROM ANOTHER
STATE, LOCAL OR FEDERAL TAX-EXEMPT OBLIGATION

B. 	 Total amount of credit(s) claimed in the current tax year to
the extent allowed on Form 500CR for the following Business
Tax Credits: Enterprise Zone Tax Credit, Maryland Disability
Employment Tax Credit, Research and Development Tax
Credit, Security Clearance Costs Tax Credit, Small Businesses
Research & Development Tax Credit, Endowments of
Maryland Historically Black Colleges and Universities Tax
Credit. In addition, include any amount deducted as a
donation to the extent that the amount of the donation is
included in an application for the Endow Maryland Tax Credit
on Form 500CR.

Enter dividends and interest (less related expenses) attributable
to any obligation or security of another state, a political
subdivision or authority of another state. Also include interest
and dividends that are exempted by federal law or treaty from
federal but not state income tax, and attributable to the United
States or a foreign government or an authority, commission,
instrumentality or territory.
Attach a schedule listing the source and amount of all dividends
and interest reported on line 7b and any related expenses. Also
include in the schedule any interest and dividends exempt by
federal law or treaty from federal but not state income tax.

C. 	 The amount allowed in a prior tax year for reforestation or
timber stand improvement if the commercial forest land
was decertified in the previous year. See the corresponding
subtraction modification listed under line 8b for more
information.

LINE 7c - NET OPERATING LOSS MODIFICATION
RECAPTURE
If claiming a net operating loss deduction (line 5) for this tax
year, and if, in the tax year of the corresponding net operating
loss, total addition modifications exceed total subtraction
modifications, enter the smaller of:

D. 	 The amount of federal income tax expenses attributable to
a child care center or family day care home, if the center or
home is not licensed or registered as required by Maryland
law.

Net operating loss deduction attributable to the loss year (tax
year in which the net operating loss occurred)

G. 	 Amount as required to nullify the impact of federal tax
changes as determined by the Comptroller.

OR
Cumulative net operating loss deductions attributable to the loss
year that are allowed for this tax year and all prior tax years

H.	 Members of pass-through entities that elected to make
payments attributable to members’ share of the passthrough entity taxable income. If you received a credit for
tax paid by the pass-through entity on your distributive
or pro rata share of income on Maryland Schedule K-1
(510/511), Part D enter the amount of the credit claimed on
Form 500CR.

+ net addition modification (amount that addition modifications
exceed subtraction modifications) for the loss year
– total net operating loss for the loss year.
These items are each considered to be a positive amount for
purposes of this calculation. If the result of combining amounts
is negative, use zero.

Attach a schedule of all items and amounts reported on line 7f in
the same categories as specified above.

If the total net operating loss deduction for this tax year consists
of net operating losses from more than one tax year, calculate
the modification separately for each loss and enter the total.

LINE 7g - TOTAL ADDITION MODIFICATION
Add the amounts on lines 7a through 7f; enter the result in
whole dollars.

Attach a schedule of the calculation if, in the tax year of the
net operating loss, total addition modifications exceed total
subtraction modifications.

SUBTRACTION MODIFICATIONS
All entries on lines 8a through 8c must be entered as positive
amounts.

NOTE: This entry is a modification and not the net operating loss.
For more information, see Section 10-205(e) of the Maryland
Tax-General Article and Administrative Release 18 and CARES
Act Tax Alert 7-24.

LINE 8a - INCOME FROM UNITED STATES OBLIGATIONS
Income attributable to an obligation of the United States or an
instrumentality of the United States. (This includes dividends
from mutual funds that invest in U.S. Government obligations.
Only that portion of dividends attributable to interest from U.S.
obligations can be subtracted. Income from Government National
Mortgage Association securities may not be subtracted.)

LINE 7d - DOMESTIC PRODUCTION ACTIVITIES
DEDUCTION
Enter the amount of any deduction allowable under IRC Section
199 for income from domestic production activities claimed on
the corporation’s federal income tax return.

LINE 8b - OTHER SUBTRACTIONS

LINE 7e - CAPTIVE REIT

If one or more of these apply, enter the total amount on line 8b
7

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CORPORATION INCOME TAX
RETURN INSTRUCTIONS

and identify each item using the code letter.

expenditures.
S.	 Amount of donations up to $1,000 of certain disposable
diapers, certain hygiene products, and certain monetary
gifts made by a taxpayer during the taxable year to certain
qualified charitable entities that are registered with the
Comptroller. To qualify for this subtraction, you must enter
the value of the donation and the name of each qualified
charitable entity (list the name(s) on Schedule C on form
500) to which a donation was made. The Comptroller may
verify the donation with the qualified charitable entity.

	 CODE LETTER
A.	 The percentage of the dividends received from an affiliated
domestic international sales corporation equal to the
percentage that would be excluded if the corporation did not
qualify under IRC Section 992(a).
B.	 Profit (without regard to losses) realized from the sale
or exchange of bonds issued by Maryland or a political
subdivision of Maryland.

Attach a schedule identifying all items and amounts claimed on
line 8b in the same categories as specified above. Additionally,
(1) list by source and amount the interest attributable to U.S.
obligations and profit from the sale or exchange of bonds issued
by Maryland or its political subdivisions, and (2) reconcile the
income tax refunds to the federal return.

C.	 The amount of payment for relocation and assistance under
the Maryland Real Property Article, Title 12, Subtitle 2.
D.	 Refunds of income tax received from a state or a political
subdivision of a state.
E.	 Purchase and installation costs of certain enhanced
agricultural management equipment as certified by the
Maryland Department of Agriculture. Attach a copy of the
certification.

LINE 8c - TOTAL SUBTRACTION MODIFICATION
Add the amounts on lines 8a and 8b. Enter the result in whole
dollars.

F. 	 The amount of expenses for reforestation or timber stand
improvement activity on 3 to 1,000 acres of commercial
forest land, exclusive of federal funds. For information
regarding qualification and a computation of expenses,
contact the Maryland Department of Natural Resources.

LINE 9 – TOTAL MARYLAND MODIFICATIONS

G. 	For a Regulated Investment Company, the amount of
the addition for interest and dividends from state or local
obligations of another state.

Add lines 6 and 9. Enter the result in whole dollars. THIS LINE
MUST BE COMPLETED.

Subtract line 8c from 7g. Enter the result in whole dollars. If
negative, enter as a negative number.
LINE 10 - MARYLAND MODIFIED INCOME

Note: For additional information regarding the impact
of the CARES act of 2020 for any addition or subtraction
modifications, visit marylandtaxes.gov.

H.	 Amount of ordinary and necessary expenses, including a
reasonable allowance for salaries or compensation, paid
or incurred during the taxable year in carrying on a trade
or business as a State licensed medical cannabis grower,
processor, dispensary, or any other cannabis establishment
licensed by the State, if the deduction for ordinary and
necessary expenses is disallowed on the federal return
under Section 280E of the Internal Revenue Code. You
must include your Maryland cannabis business license
number in the field provided. All cannabis businesses
are required to provide proof of these expenses to the
Comptroller upon request.

APPORTIONMENT OF INCOME
NOTE: To be completed by multistate corporations
- unistate corporations skip to line 13. For unistate
corporations, all income is allocable to Maryland.
LINE 11 - MARYLAND APPORTIONMENT FACTOR
Enter the apportionment factor as calculated on Page 4 of Form
500. (The factor must be rounded to six decimal places.)
For detailed instructions, see instructions for Schedule A Computation of Apportionment Factor.

I. 	 Expenses incurred to buy and install handrails in an existing
elevator in a healthcare facility (as defined in Section 19114 of the Health-General Article) or other building in which
at least 50% of the space is used for medical purposes.

LINE 12 - MARYLAND APPORTIONED INCOME
Multiply the amount on line 10 by the factor shown on line 11.
Enter the result in whole dollars.

L. 	 The amount of wages for which a deduction is not allowed
under IRC Section 280C(a), not exceeding the credit allowed
for targeted jobs (Work Opportunity Tax Credit) under IRC
Section 51.

LINE 13 - MARYLAND TAXABLE INCOME
Enter the amount from line 10 or line 12, whichever is applicable.
LINE 14 - TAX

M. 	Amount as required to nullify the impact of federal tax
changes as determined by the Comptroller.

Multiply the amount on line 13 by 8.25%. Enter the result in
whole dollars.

N. 	 The difference between the adjusted basis of certain
disposed or transferred assets as recorded in the books of
the public service company and the adjusted basis of the
assets for federal purposes calculated as of January 1, 2000.
Add to this the amount of any carryover from a previous
year.

LINE 15 - PAYMENTS AND CREDITS
15a.	

Enter the total of amounts paid during the tax year
with Form 500D - Maryland Corporation Declaration of
Estimated Income Tax. Include any overpayment carried
forward from the prior year Form 500. Also include
amounts paid by the corporation using Form MW506NRS
- Return of Income Tax Withheld for Nonresident Sale of
Real Property.

15b.	

Enter any amount paid with Form 500E - Maryland
Application for Extension to File Corporation Income Tax
Return.

P. 	 Interest on Build America Bonds that is included in your
federal taxable income. See Administrative Release 13.
Q.	 Under the Racing and Community Development of the SB
987, Act of 2020, this bill allows a subtraction modification
for the gain on the transfer of property within the Laurel
Park and Pimlico sites or Bowie Race Course Training Center
Property and income realized as result of governmental
8

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2023

CORPORATION INCOME TAX
RETURN INSTRUCTIONS

Enter the total of the nonrefundable business tax credits
from Form 500CR. You must file Form 500 electronically
to claim the following nonrefundable business tax credits
from Form 500CR.

tax credits based on the number of qualified positions created
or wages paid for these positions.
•	COMMUNITY INVESTMENT TAX CREDIT. Businesses that
contribute $500 or more to approved neighborhood and
community assistance programs may be eligible for a tax
credit of 50% of approved contributions with a maximum
credit of $250,000.

•	ENTERPRISE ZONE TAX CREDIT. Businesses located in an
enterprise zone may be eligible for tax credits based upon
wages paid to qualifying employees.

•	BUSINESSES THAT CREATE NEW JOBS TAX CREDIT.
Certain businesses located in Maryland that create new
positions or establish or expand business facilities in the state
may be entitled to an income tax credit if a property tax
credit is granted by Baltimore City or any county or municipal
corporation of Maryland.

•	MARYLAND DISABILITY EMPLOYMENT TAX CREDIT.
Businesses that employ persons with disabilities may be
eligible for tax credits based upon wages paid to the qualified
employees and the child care expenses and transportation
expenses paid on behalf of the qualified employees.
•	MARYLAND RESEARCH AND DEVELOPMENT TAX CREDIT.
Businesses may claim a credit for certain qualified research and
development expenses.

•	EMPLOYER-PROVIDED LONG-TERM CARE INSURANCE
TAX CREDIT. A credit may be claimed for costs incurred by
an employer that provides long-term care insurance as part
of an employee benefit package.

•	ENDOW MARYLAND TAX CREDIT. Businesses that make
a donation to a qualified permanent endowment fund may
be eligible for a tax credit of 25% of the approved donation
amount.

•	ONE MARYLAND ECONOMIC DEVELOPMENT TAX CREDIT. Businesses may claim credits for project costs to establish, relocate or expand a business in a Tier I county in Maryland. A portion of this credit may be refundable.

•	ENDOWMENTS OF MARYLAND HISTORICALLY BLACK
COLLEGES AND UNIVERSITIES TAX CREDIT. A taxpayer
may claim the Endowments of Maryland Historically Black
Colleges and Universities Tax Credit against the State income
tax in the amount stated on the tax credit certificate issued
by the Comptroller. If the credit exceeds the State income tax
for the taxable year, the excess credit is non-refundable, but
it may be carried forward and applied to succeeding taxable
years until fully utilized.

•	COMMUTER TAX CREDIT. Businesses may claim a credit for
the cost of providing qualifying commuter benefits to the
business entities’ employees.
•	ENERGY STORAGE SYSTEMS TAX CREDIT. Businesses
and individuals may claim a credit for certain costs to install
an energy storage system paid or incurred during the taxable
year.
•	PRESERVATION AND CONSERVATION EASEMENTS TAX
CREDIT. Certain businesses donating an easement to the
Maryland Environmental Trust, the Maryland Agricultural
Land Preservation Foundation, or the Maryland Department
of Natural Resources to preserve open space, natural resources, agriculture, forest land, watersheds, significant ecosystems, view sheds or historic properties, may be eligible for a
credit.

•	FEDERAL SECURITY CLEARANCE COSTS TAX CREDIT. A
business may be eligible to claim credits against the
NEW
State income tax for certain costs related to federalbased security contracting. For a business to be eligible,
it must apply to and be certified by the Maryland Department
of Commerce. This credit is limited to employers with 500 or
fewer employees.
NOTE: If you claim a business tax credit for any of the
above items, an addition to income must be included on
line 7f.

•	WORK OPPORTUNITY TAX CREDIT. This bill creates a
nonrefundable credit against the State income tax for up to
50% of the federal Work Opportunity Tax Credit claimed by
an employer with respect to a qualified individual who is
employed in the State. Any unused amount of the credit may
not be carried forward to any other tax year.

•	CYBERSECURITY
INCENTIVE
TAX
CREDIT.
A
nonrefundable credit may be claimed by a buyer of cybersecurity
technology and/or cybersecurity services subject to certain
maximum amounts.

•	AUTOMATED EXTERNAL DEFIBRILLATOR TAX CREDIT FOR RESTAURANTS. An individual or business entity
that operates a qualifying restaurant in Maryland may
NEW
claim a nonrefundable credit to cover up to the first
$500 of the cost of an automated external defibrillator
purchased for use at a restaurant during the taxable year.
See Form 500CR, Part T for additional information.

•		APPRENTICE EMPLOYEE TAX CREDIT. This credit is not
refundable and is applied against only the Maryland State
income tax. Excess credit may be carried forward until the
excess amount is fully used. The excess credit amount is
applied against the Maryland State income tax after the
application of all other business income tax credits on the
Form 500CR.

•	FIRST YEAR LEASING COSTS TAX CREDIT FOR QUALIFIED SMALL BUSINESSES. Certain small businesses performing security-based contracting which incur expenses for
rental payments owed during the first year of a rentNEW
al agreement for spaces leased in Maryland costs may
be eligible to claim a credit for security costs certified
by the Maryland Department of Commerce.

•		QUALIFIED FARMS TAX CREDIT. Qualified farms that make
an eligible food donation may be eligible for an income tax
credit. A qualified farm that makes an eligible food donation
is eligible for a tax credit amount equal to 100% of the value
of the eligible food donation. A qualified farm that makes a
donation of certified organic produce is eligible for tax credit
amount equal to 100% of the value of the donated certified
organic produce. Certification of the tax credit is issued by an
individual or organization authorized by the State Department
of Agriculture to receive eligible food donations from a qualified
farm and issue the qualified farm a tax credit certificate.

NOTE: It is the taxpayer responsibility to maintain record
of each qualified employee. Documentation needs to be
provided upon request.
15d.	
Enter the total of the refundable business tax credits
from Form 500CR. You must file Form 500 electronically to claim
the following refundable business tax credits from Form 500CR.

•	JOB CREATION TAX CREDIT. Certain businesses that
create new qualified positions in Maryland may be eligible for
9

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•	BIOTECHNOLOGY INVESTMENT INCENTIVE TAX CREDIT. A credit may be claimed based on the amount contributed during the tax year to a qualified Maryland biotechnology
company, subject to certain maximum amounts.

amount stated in the final tax credit certificate issued by the
Secretary of this subtitle for 5 consecutive taxable years
beginning with the taxable years in which the Catalytic
Revitalization Projects is completed.

•	SMALL BUSINESS RELIEF TAX CREDIT. An individual or
small business that pays earned sick and safe leave to a
qualified employee may be entitled to claim a state income
tax credit. The amount of credit is granted and certified by
the Maryland Department of Commerce.

	 If the tax credit allowed in any taxable year exceeds the total
tax otherwise payable by business entity or nonprofit
organization, a refund in the amount of the excess may be
claimed.
	 PTE members who are eligible for this credit must claim the
credit on Form 500CR.

•	MORE JOBS FOR MARYLANDERS TAX CREDIT. A
manufacturing business that is located within Maryland may
be entitled to a 10-year income tax credit on the total amount
of wages paid for each qualified position at an eligible facility.

	NOTE: A copy of the required certification from the Maryland
Department of Housing and Community Development must
be included.

•	ONE MARYLAND ECONOMIC DEVELOPMENT TAX CREDIT. Businesses may claim credits for project costs to establish, relocate or expand a business in a Tier I county in Maryland. A portion of this credit may be refundable.

For additional information regarding any of the Business
income tax credits, see the Form 500CR Instructions available
at marylandtaxes.gov.

•	FILM PRODUCTION ACTIVITY TAX CREDIT. Businesses
may claim a tax credit for film production activities that meet
certain qualifications and estimated total direct costs incurred
in Maryland.

15e.	

•	SMALL BUSINESS RESEARCH AND DEVELOPMENT TAX
CREDIT. A business which is eligible to claim the Maryland
Research and Development Tax Credit, may be eligible for a
refund of the amount that exceeds the state tax if it is a
qualified "small business."

Enter the total tax credits from Form 502S to line 1 of
Part DDD of Form 500CR. Check the box on line 15e if
you are a non-profit corporation. Complete and submit
Form 502S with Form 500CR.

•	HERITAGE STRUCTURE REHABILITATION TAX CREDIT.
A credit is allowed for 20% or 25% of certain rehabilitation
expenditures as certified by the Maryland Historical Trust.

•	THEATRICAL PRODUCTION TAX CREDIT. A qualified
theatrical production entity may claim a credit against state
income tax for theatrical production activities in the State in
an amount equal t