Maryland Underpayment of Estimated Maryland Income Tax by Individuals

Underpayment of Estimated Maryland Income Tax by Individuals
Tax Year 2023 502UP Underpayment of Estimated Income Tax by Individuals
MARYLAND
FORM

502UP

2023

UNDERPAYMENT OF
ESTIMATED INCOME
TAX BY INDIVIDUALS

ATTACH THIS FORM TO FORM 502, 505 or 515.
IMPORTANT: REVIEW THE INSTRUCTIONS BEFORE COMPLETING THIS FORM.
SEE SPECIAL INSTRUCTIONS FOR FARMERS AND FISHERMEN OR IF YOUR INCOME IS TAXABLE BY ANOTHER STATE.

First Name	

MI	

Last Name	

Social Security Number	

Spouse's First Name	

MI	

Spouse's Last Name	

Spouse's Social Security Number

EXCEPTIONS WHICH AVOID THE UNDERPAYMENT INTEREST
No interest is due and this form should not be filed if:
A. The tax liability on gross income after deducting Maryland withholding is $500 or less, or,
B. You have made four quarterly payments as required, each equal to or more than one-fourth of 110% of last year’s taxes.
COMPUTATION OF UNDERPAYMENT – LINES 1 THROUGH 15
1. 		Total Maryland income (from line 16 of Form 502 or line 8 of Form 505NR). . . . . . . . . . . . . . . . . 1.
2. 2023 Maryland and local tax (from line 34 of Form 502 or line 37 of Form 505). . . . . . . . . . . . . . 2.
00
3. 		Refundable earned income credit (from line 42 of Form 502) . . . . . . . . 3.
4. Refundable income tax credits
00
(from line 43 of Form 502 or line 46 of Form 505). . . . . . . . . . . . . . . . 4.	
00
5. 		Total tax developed on tax preference items. . . . . . . . . . . . . . . . . . . . 5.
	6. Total (Add lines 3, 4 and 5.) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 6.
	7. Balance (Subtract line 6 from line 2.). . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 7.
	8. Multiply line 7 by 90% (.90) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 8.
	9. a. 2022 tax: Enter line 34 of 2022 Form 502
or line 37 of 2022 Form 505 (see Instructions).. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 9a.
b. Multiply line 9a by 110% (1.10) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 9b.
	10. Minimum withholding and/or estimated tax required (Enter the lesser of line 8 or 9b.
If first-time filer, enter line 8.). . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 10.

DUE DATES OF INSTALLMENTS	
INSTALLMENT PERIODS	
11. Divide total Maryland income on line 1 into
earnings per period (See instructions.). . 11.
12. Divide earnings per period on line 11 by
the amount on line 1 to
determine the percent per period.
If less than zero, enter zero.. . . . . . . . . 12.
13. 	Payments required. Multiply the amount
on line 10 by the percent on line 12 for
each period.. . . . . . . . . . . . . . . . . . . . . 13.
14. Estimated tax paid and tax withheld
per period (See instructions.) . . . . . . . . 14.
15. Underpayment per period (line 13 less
line 14) If less than zero, enter zero . . . 15.
COMPUTATION OF INTEREST
16. Interest factor . . . . . . . . . . . . . . . . . . . 16.
Multiply underpayment on line 15 by the

1st Period 	
April 15, 2023	
Jan 1 to Mar 31	

0.0150

2nd Period	
June 15, 2023	
Jan 1 to May 31	

3rd Period	
Sept 15, 2023	
Jan 1 to Aug 31	

00
00
00
00
00
00

4th Period
Jan 15, 2024
Jan 1 to Dec 31

00

00

00

00

00

00

00

00

00

00

00

00

00

00

00

00

0.0227

0.0305

00
00
factor on line 16 for each period . . . . . . 17.
18. Interest. Add amounts on line 17. Place
total in appropriate box on line 49 of Form
502 or line 52 of Form 505 and include
amount in your total payment with return . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 18.

COM/RAD 017

00
00

0.0249	

00

00

00

MARYLAND
FORM

502UP
GENERAL INSTRUCTIONS

If your estimated tax payment was not timely, but was paid
earlier than the due date of the next quarter, adjust the factor
as follows:
1st Period - For payments due by April 15, 2023 that were
not paid by April 15, 2023 but paid earlier than June 15, 2023,
count the number of months from the due date of April 15,
2023 that the payment was late. Treat a partial month as one
month. Divide that number by twelve and multiply it by the
9% annual rate. Apply this adjusted factor to the underpaid
amount on line 15.
2nd Period - For payments due by June 15, 2023 that were
not paid by June 15, but paid earlier than September 15,
2023 count the number of months from the due date of June
15, 2023 that the payment was late. Treat a partial month as
one month. Divide that number by twelve and multiply it by
the 9% annual rate. Apply this adjusted factor to the
underpaid amount on line 15.

WHO MUST FILE
If you believe you are liable for interest for one of the reasons outlined
above, or if you believe you are not liable for interest due to an unequal
distribution of income, complete and submit this form with your tax return.
If you meet one of the exceptions shown on page 1, you are not required
to file this form.
If you want us to figure the interest for you, complete your return as
usual. Do not file Form 502UP. You will be notified of any interest due.

3rd Period – For payments due by September 15, 2023 that
were not paid by September 15, 2023 but paid earlier than
December 15, 2023, count the number of months from the
due date of September 15, 2023 that the payment was late.
Treat a partial month as one month. Divide that number by
twelve and multiply it by the 9% annual rate. Apply this
adjusted factor to the underpaid amount on line 15. For
payments made on or later than December 15, 2023, apply
the interest factor of 0.0305 to the underpaid amount on line
15.

SPECIFIC INSTRUCTIONS
Lines 1 through 10 are used to determine the minimum amount required
to be paid by estimated or withholding tax to avoid interest.
Line 1

Enter your Maryland adjusted gross income from line 16 of
Form 502 or line 8 of Form 505NR. Alternatively, if you
itemize deductions, you may elect to enter taxable net income
from line 20 of Form 502 or net income from line 11 of Form
505NR.

Lines 2-4

Enter the amount specified from your 2023 Form 502 or 505.

Line 5

Multiply the amount
state rate used on
amount on line 5 of
special nonresident)

Line 9a

2022 tax: Enter line 34 of 2022 Form 502 (reduced by any
credits on line 9 of Part CC of 2022 Form 502CR); or line 37
of 2022 Form 505 (reduced by any credits on line 45 of 2022
Form 505 and any credits on line 9 of Part CC of 2022 Form
502CR).

Lines 11 through 15 will determine which periods are
underpaid and the amount of underpayment.
Enter in each column the income received for the period of
the year covered by that column. If your income was received
evenly throughout the year, enter one-fourth of line 1 in
column 1, one-half of line 1 in column 2, three-fourths of line
1 in column 3 and an amount equal to line 1 in column 4. You
may elect to report your income based on the actual dates of
receipt. If so, enter income received between January 1 and
March 31 in the first column; enter income received between
January 1 and May 31 in the second column; enter income
received between January 1 and August 31 in the third
column and 100% of your income in the fourth column.
NOTE: Regardless of whether you use an even distribution or
base your entries on the actual receipt dates, each successive
column will include the amount from the prior columns. See
the example in the instructions for line 14.
Line 14

Line 16

4th Period - For payments due by January 15, 2024 that
were not paid by January 15, 2024 but paid earlier than April
15, 2024, count the number of months from the due date of
January 15, 2024 that the payment was late. Treat a partial
month as one month. Divide that number by twelve and
multiply it by the 10.0075% annual rate. Apply this adjusted
factor to the underpaid amount on line 15.

on line 5 of Form 502TP by the highest
your tax return. Add to this result the
Form 502TP multiplied by your local (or
tax rate.

If your 2022 tax was corrected or amended, be sure to
include any additional tax when calculating your total tax for
the year.

Enter in each column the sum of any estimated payments you
have made and any Maryland tax withheld from the beginning
of the year to the due date at the top of that column. Include
any nonresident tax paid by S corporations, partnerships or
limited liability companies on your behalf.

Page 2

Interest is computed at a rate of 0.8339% per month after
D e c e m b e r 31, 2 0 2 3 . F o r m o r e i n f o r m a t i o n , v i s i t
marylandtaxes.gov.

Section 10-815 of the Tax-General Article of the Annotated Code of
Maryland requires every individual, or individuals filing jointly, who
receives taxable income which is not subject to Maryland withholding, or
from which not enough Maryland tax is withheld to file a Declaration of
Estimated Tax, if the income can be expected to develop a tax of more
than $500 in excess of the Maryland withholding. Furthermore, Sections
13-602 and 13-702 stipulate that any individual so required to file, who
either (1) fails to file on the date or dates prescribed; (2) fails to pay the
installment or installments when due or (3) estimates a tax less than
ninety (90) percent of the developed tax shown on the return for the
current tax year and less than 110% of the tax that was developed for the
prior year, shall be subject to penalty and interest.

Line 11

2023

UNDERPAYMENT OF ESTIMATED
INCOME TAX BY INDIVIDUALS
INSTRUCTIONS

Line 17

Using the factors on line 16 or the adjusted factor described
above, determine the amount of interest due for each quarter
and enter the amounts in the appropriate columns.

Line 18

Add all interest amounts in columns 1 through 4 on line 17.
Enter the total interest on the appropriate line of your tax
return.

If the interest calculated on line 18 is zero because your income
was not received evenly throughout the year, enter code number
301 on one of the lines marked “code numbers” on the Form 502,
505, or 515 and attach this form to your return.
FARMERS AND FISHERMEN
If your gross income from farming or fishing is at least two-thirds of your
total estimated gross income for the year, the 2023 declaration and full
payment of the estimated tax is due on or before January 15, 2024. In
lieu of filing the declaration, you may elect to file your full and complete
annual return on or before March 1, 2024 and make full payment of the
developed tax at that time.
If you fail to do either of the above, and the income not subject to
withholding or from which not enough Maryland tax is withheld would be
expected to develop a tax of more than $500, then you are subject to
interest. To compute the applicable interest charge, complete lines 1
through 10 of this form. Enter the amount from line 10 on line 13, column
4 and complete the rest of the form. Only column 4 will have entries.
To claim exemption from this interest charge or to use the special
calculation, enter code number 300 on one of the lines marked
“code numbers” on the Form 502, 505, or 515. Attach this form to
your return if you used the special calculation.
INCOME TAXABLE BY ANOTHER STATE

NOTE: Just as in line 11, each successive entry will include
the amount from the prior columns. For example, if you paid
$500 in estimated payments each quarter, the first column
will contain $500, the second $1,000, the third $1,500 and the
fourth $2,000. Overpayments in later quarters may not be
used to offset underpayments in previous quarters.

If at least 90% of your taxable income is taxable by another state, and
the underpayment is not greater than the local tax, no interest is due and
you are not required to file this form.

Lines 16 through 18 determine the amount of interest due for
each underpaid quarter.

For more information, visit marylandtaxes.gov or email your question to
[email protected]. You may also call 1-800-638-2937 or from
Central Maryland 410-260-7980.

The factors represent the interest rate for the portion of the
year between the due date of each quarter and the due date
of the next quar ter. Interest is computed at a rate of
0.7500% per month for due dates prior to January 1, 2024.
COM/RAD 017

To claim exemption from this interest charge, enter code number
302 on one of the lines marked “code numbers” on the Form 502,
505, or 515.