You can use the tables below to determine the percentage of the federal credit that can be claimed on your Maryland return:. If the credit is more than your tax liability, the unused credit may not be carried forward to another tax year. The refundable tax credit must be claimed against the State income tax for the taxable year in which the Maryland Higher Education Commission certifies the tax credit.
Individuals applying for certification should submit an application to the Maryland Higher Education Commission by September 15th of each year. The Maryland Higher Education Commission shall prioritize tax credit recipients and amounts based on qualified taxpayers who:.
The credit shall be recaptured if the individual does not use the credit approved under this section for the repayment of the individual's undergraduate or graduate student loan debt within 2 years from the close of the taxable year for which the credit is claimed. The individual who claimed the credit shall pay the total amount of the credit claimed as taxes payable to the State for the taxable year in which the event requiring recapture of the credit occurs.
The unused amount of the credit may not be carried over to any other taxable year. The qualified expenses incurred must be certified by the Maryland Department of Housing and Community Development. To claim the credit, an individual shall: i file an amended income tax return for the taxable year in which the qualified expenses were incurred; and ii attach a copy of the Maryland Department of Housing and Community Development's certification of the approved credit amount to the amended income tax return.
If you are a qualified licensed physician or a qualified nurse practitioner who served without compensation as a preceptor, you may be eligible to claim a nonrefundable credit against your State tax liability.
There are two credits for qualified preceptors. The second credit on line 2 of Part J on Form CR is available for both licensed physicians and nurse practitioners. For purposes of claiming the credit on line 1 of Part J on Form CR , "preceptorship program" means an organized system of clinical experience that, for the purpose of attaining specified learning objectives, pairs an enrolled student of a liaison committee on medical education-accredited medical school in Maryland or an individual in a postgraduate medical training program in Maryland with a licensed physician who meets the qualifications as a preceptor.
To qualify for the credit, the licensed physician must have worked in an area of Maryland identified as having a health care workforce shortage by the Maryland Department of Health MDH.
The licensed physician must have worked a minimum of three rotations, each consisting of hours of community-based clinical training. For purposes of claiming the credit on line 2 of Part J on Form CR , "preceptorship program" means an organized system of clinical experience that, for the purpose of attaining specified learning objectives, pairs a nurse practitioner student enrolled in a nursing education program that is recognized by the Maryland Board of Nursing with a nurse practitioner or licensed physician who meets the qualifications as a preceptor.
To qualify for the credit, a nurse practitioner or licensed physician must have worked in an area of Maryland identified as having a health care workforce shortage by the Maryland Department of Health.
The nurse practitioner or licensed physician must have worked a minimum of three rotations, each consisting of at least hours of community-based clinical training.
Eligibility for these credits is limited to funds budgeted. Applicants seeking certification will be approved on a first-come, first-served basis. Go to the Maryland Department of Health website at health. A taxpayer who makes a donation to a qualified permanent endowment fund at an eligible community foundation may be eligible for a credit against the Maryland State income tax.
This certification must be attached to the Form CR at the time the Maryland income tax return is filed. This credit is not refundable and is applied only against the Maryland State income tax. To the extent the credit is earned in any year and it exceeds the State income tax, you are entitled to an excess carryover of the credit until it is used, or it expires five years after the credit was earned, whichever comes first.
Charles St. Donors that make a donation to a qualified permanent endowment fund held at an eligible institution of higher education may be eligible for a credit against the Maryland State income tax. The tax credit terminates December 31, Cash donations made by the taxpayer to a qualified permanent endowment fund that meet certain requirements are eligible for tax credits. The donor must apply to the Comptroller of Maryland for a certification of the donation.
Donors seeking the tax credit must apply to the Comptroller for a tax credit certificate in the calendar year that the donation is made.
Applications must be sent by e-mail and are approved on a first-come, first-serve basis until the maximum amount of authorized credits have been approved. An acknowledgement letter is issued when an application for the proposed donation is received. Donors are required to submit documentation from the institution showing proof of donation within 30 days before a final tax credit certificate is issued.
Applications are accepted by e-mail only; and should be sent to HBCUtaxinfo marylandtaxes. All fields on the application are required to be completed fully. Incomplete applications will not be processed. Donors claim the credit by including the certification at the time the Maryland income tax return is filed. Corporations and Fiduciaries that are eligible to claim the credit must use Form CR to do so.
A taxpayer claiming the credit is required to add back the amount of the credit claimed to Maryland adjusted gross income or Maryland modified income, to the extent excluded from federal adjusted gross income.
Businesses or individuals who contribute to approved Community Investment Programs may be eligible for a credit against the Maryland State income tax. The taxpayer must apply to and receive approval by the DHCD for each contribution for which a credit is claimed.
To the extent the credit is earned in any year and it exceeds the State income tax, you are entitled to an excess carryover of the credit until it is used or it expires five years after the credit was earned, whichever comes first. Businesses in Maryland may be able to take advantage of several tax credits.
At the bottom of the page are links to the details of each tax credit. For tax years beginning after December 31, , you must file your tax return electronically in order to claim a business tax credit unless you submit a waiver from the electronic filing requirement. Businesses or individuals who operate an Aerospace, Electronics, or Defense Contract Tax Credit Project may be eligible for an income tax credit.
The income tax credit is based on the number of qualified positions created or retained for an Aerospace, Electronics, or Defense Contract Tax Credit Project. To qualify for the tax credit, the individual or business must be a qualified business entity. A qualified business entity is an individual or business conducting or operating a for-profit trade or business in Maryland that is certified by the Maryland Department of Commerce as qualifying for the income tax credit.
A qualified business entity may receive up to three designations for Aerospace, Electronics, or Defense Contract Tax Credit Projects in a fiscal year. A qualified position does not include a position that is filled for a period of less than 12 months.
Qualified expenditures are capital expenditures that have been expended or will be expended by a qualified business entity and that the Maryland Department of Commerce determines have met the requirements for an Aerospace, Electronics, or Defense Contract Tax Credit Project. For questions on application and certification processes or for additional information on this credit program, contact: Maryland Department of Commerce Office of Finance Programs, Tax Incentives Group E.
Pratt St. Baltimore, MD Certain taxpayers may be eligible for an income tax credit for the first year of employment of eligible apprentices. The income tax credit is based on the number of eligible apprentices employed by the taxpayer. Eligible apprentices must have been employed by the taxpayer for at least 7 full months of the taxable year. To qualify, a company can be any entity of any form except a sole proprietorship that is duly organized and existing under the laws of any jurisdiction for the purpose of conducting business for profit, and must be primarily engaged in, or within 2 months will be primarily engaged in, the research, development, or commercialization of innovative and proprietary technology that comprises, interacts with, or analyzes biological material including biomolecules DNA, RNA, or protein , cells, tissues or organs.
See Form CR instructions for requirements and recapture information. A QMBC must: Have its headquarters and base of operations in Maryland; Have fewer than 50 full-time employees; Have been in active business for no longer than 10 years from the date it received its first qualified investment; and Not have any securities publicly traded companion any exchange A QMBC may include a company that has been an active business for up to 12 years, with DOC approval. Qualified investors are also required to file an income tax return.
DOC may not issue initial credit certificates in excess of the amount appropriated to the Reserve Fund for that fiscal year in the state budget as approved by the General Assembly. At least 30 days before making an investment, the business must submit an initial credit certificate application to DOC. Upon approval within 30 days of DOC's receipt of the application , the applicant will receive an initial credit certificate stating the amount of the tax credit and will have 30 days to make the investment.
Within the following 10 days, the investor must notify DOC that the investment has been made. A final credit certificate will be issued to the applicant stating the amount of the tax credit to which the applicant is entitled.
A copy of the final credit certificate must be filed with the taxpayer's income tax return. The amount in excess of the state tax liability may be refunded. The total amount of final tax credit certificates issued by DOC each year is limited to the amount appropriated to the Reserve Fund in the State budget. Applications are reviewed and approved on a first come, first served basis. For taxable years beginning after December 31, , this credit is available only with an electronically filed return.
A copy of the certification issued by DOC must be included with the electronic return, and the Form CR section of the return must be completed. Exception : Should a fiduciary become eligible to claim this credit the fiduciary may be a member of a pass-through entity eligible to pass on the Biotechnology Investment Incentive Tax Credit to its members , the fiduciary will use Business Tax Credit Form for a Fiduciary, Form CR, as an electronic version of Fiduciary Income Tax Form does not currently exist.
A fiduciary may distribute the tax credit to its beneficiaries using Maryland Schedule K-1 However, beneficiaries receiving this tax credit from a fiduciary, must file electronically to claim a business tax credit unless the beneficiary happens to be a fiduciary taxpayer. The business must create at least 25 new positions as part of the new or expanded business facility in Maryland 5, square feet or more.
Businesses located in smaller counties population of 30, or less must create at least 10 new positions. The new positions must be: Located in Maryland Part of the new or expanded business facility in Maryland Permanent Full time of indefinite duration.
In Montgomery County and Washington County for tax years and later, the position can be a contract position of definite duration lasting at least 12 months with an unlimited renewal option; and Filled for at least one year The business must then apply for and receive certification for a property tax credit from the local government in which the facility is located.
SDAT will calculate and certify the amount of the allowable tax credit to the Comptroller. The credits are calculated as a percentage of the local property tax liability on the new or expanded portion of the facility. If the credit is more than the state tax liability, the unused credit may be carried forward for the next five 5 taxable years.
If, at any time during the three tax years after the year the credit was earned, the business fails to satisfy the thresholds to qualify for the credit, the credit must be recaptured. The income tax credit to be recaptured is reported on line 26, Part W in the Form CR section of the return and filed with the tax return for the tax year in which the business failed to satisfy the applicable thresholds. Documentation of the credit shall be maintained by the taxpayer in their files and be made available to the Insurance Commissioner, on request, in accordance with COMAR The documentation should include documents from the agency granting the credit, and a list of the names and telephone numbers for the taxpayer's staff who are directly involved in granting the credits.
All information shall be retained for a minimum of three years from the date of the filing of the final tax return on which the credit is taken. Businesses that use a qualified energy resource to produce electricity that is sold to an unrelated person may be entitled to an income tax credit. Sole proprietorships, corporations and pass-through entities, such as partnerships, subchapter S corporations, limited liability companies and business trusts may claim the tax credit.
This credit is allowed if a Maryland facility is originally placed in service or initially began co-firing, during the period of January 1, through December 31, and produces electricity during the tax year primarily using qualified energy resources derived from:.
The business must apply for and receive an initial credit certificate from the Maryland Energy Administration MEA before claiming this credit. The initial credit certificate must state the amount of electricity the taxpayer expects to produce in a qualified Maryland facility over a five-year period. Note: MEA is prohibited from issuing initial credit certificates after December 31, For taxable years beginning after December 31, , this credit is available only on an electronically-filed income tax return for the tax year in which the credit is being claimed.
A copy of the initial credit certificate issued by the MEA must be included with the electronic return, and the Form CR section of the return must be completed. Businesses or individuals who contribute to qualified organizations' Community Investment Programs can earn credits for a portion of the value of the money, goods or real property contribution.
Community Investment Tax Credits CITC support nonprofit organizations serving as incentives to attract contributions from individuals and businesses to benefit local projects and services. The credit may be taken against corporate income tax, personal income tax, insurance premiums tax or public service company franchise tax. However, the same credit may not be applied to more than one tax type.
Contributions of services or labor are not eligible. Excess credits may be carried over for five 5 years. The Form CR section of the electronic return must also be completed. Insurance premiums tax The contributor and the non-profit partner must complete the Certification of Contribution for Tax Credit and submit it to the Maryland Department of Housing and Community Development along with a copy of the check or documentation of the value of donated goods.
The credit may be taken against corporate income tax, personal income tax, state and local taxes withheld for tax-exempt organizations or insurance premiums tax. The same credit may not, however, be applied to more than one tax type. Sole proprietorships, corporations, tax-exempt nonprofit organizations and pass-through entities, such as partnerships, subchapter S corporations, limited liability companies and business trusts may claim the tax credit. The credit is applicable to the following transit instruments: MTA passes, fare cards, smart cards or vouchers used by employees to ride publicly or privately owned transit systems except taxi services, company Vanpool programs, company guaranteed Ride Home programs, and company Cash in Lieu of Parking programs.
The employer must pay a portion of the cost of an employee's travel between the employee's home and workplace, including the purchase of transit instruments tickets, passes, vouchers, fare cards, smart cards and tokens.
In addition, the workplace must be located in Maryland and travel must take place in either:. For taxable years beginning after December 31, , the income tax credit is available only on an electronically-filed income tax return for the tax year in which the credit is being claimed. The Form CR section of the return must be completed. Insurance premiums tax : Documentation of the credit shall be maintained by the taxpayer in their files and be made available to the Insurance Commissioner, on request, in accordance with COMAR The documentation should include documents from the agency granting the credit and a list of the names and telephone numbers for the taxpayer's staff who are directly involved in granting the credits.
Businesses must re-register for this tax credit annually. For more information call or email CommuterChoice mdot. The credit is claimed by a qualified investor. To qualify, a QMCC can be an entity of any form except a sole proprietorship that is duly organized and existing under the laws of any jurisdiction or formed within 4 months of receiving the investment for the purpose of conducting business for profit, and must be engaged primarily in the development of innovative and proprietary cybersecurity technology.
The QMCC must:. The investment cannot include debt unless it is convertible debt. The investment must be the contribution of money in cash or cash equivalents expressed in United States dollars, at risk of loss, to a QMCC in exchange for stock, a partnership or membership interest, or any other ownership interest in the equity of the QMCC, title to which the ownership interest shall vest in the qualified investor.
At least 30 days prior to making an investment in a QMCC, a qualified investor must submit an application to the Maryland Department of Commerce for an initial tax credit certificate. The credit is subject to recapture if within 2 years of the close of the taxable year in which the credit is claimed; 1 the qualified investor sells, transfers or otherwise disposes of the ownership interest in the QMCC that gave rise to the credit; 2 the QMCC ceases operating as an active business or distributes the equity investment; 3 the QMCC is not duly organized and existing within 4 months of receiving the qualified investment.
The amount of recapture is entered onto line 5, Part H-I. The credit may also be subject to a recapture if the certificate is rescinded by the Maryland Department of Commerce due to the qualified investor failing to provide the required notice to the Maryland Department of Commerce of having made the investment, or if the Maryland Department of Commerce revokes the final certification due to false representations made in connection with the application for the certification.
See Form instructions. For a member of the PTE to be allowed the credit, the member must complete the Form CR section of their electronically-filed Maryland return and include a copy of the final certification from the Maryland Department of Commerce and Maryland Schedule K-1 showing the allocated share of the credit amount.
A "Qualified Buyer" means any entity that has fewer than 50 employees in the State and that is required to file an income tax return in the State. A qualified buyer eligible for the credit may apply to the Maryland Department of Commerce for a credit certificate that states the amount of the credit the qualified buyer may claim. A qualified buyer must attach a copy of the credit certificate to the income tax return on which the qualified buyer claims the credit.
The Maryland Department of Commerce approves each application that qualifies for a credit certificate. A "Cybersecurity Business" means an entity organized for profit that is engaged primarily in the development of innovative and proprietary cybersecurity technology or the provision of cybersecurity service.
A "cybersecurity service" is an activity that is associated with a category or subcategory identified under the framework core established by the National Institute of Standards and Technology's Cybersecurity Framework. The company must provide long-term care insurance benefits to one or more employees during the taxable year as part of an employee benefits package. Any sum paid or payable to a non-resident which is subject to a deduction of Equalisation levy would attract disallowance if such sum was paid without deduction of such levy or if it was deducted but not deposited with the Central Government till the due date of filing of return.
However, where in respect of any such sum, Equalisation levy is deducted or deposited in subsequent year, as the case may be, the expenditure so disallowed shall be allowed as deduction in that year.
Amount paid by way of royalty, licence fee, service fee, privilege fee, service charge or any other fee or charge, by whatever name called, which is levied exclusively on, or any amount which is appropriated, whether directly or indirectly, from a State Government undertaking by the State Government. Tax actually paid by an employer referred to in section 10 10CC.
Interest, salary, bonus, commission or remuneration paid to partners subject to certain conditions and limits. Interest, salary, bonus, commission or remuneration paid to members subject to certain conditions and limits.
Association of persons or body of individuals except a company or a co-operative society, society registered under Societies Registration Act, etc. Any provision for payment of gratuity to employees, other than a provision made for purposes of contribution to approved gratuity fund or for payment of gratuity that has become payable during the year subject to specified conditions.
No deduction shall be allowed in respect of marked to market loss or other unexpected loss except as allowable under section 36 1 xviii. In case of mineral oil concerns allowances specified in agreement entered into by Central Government with any person subject to certain conditions and terms of agreement.
Assessees engaged in prospecting for or extraction or production of mineral oils. In case of mineral oil concerns expenditure incurred remaining unallowed as reduced by proceeds of transfer. Assessee whose business consists of prospecting for or extraction or production of petroleum and natural gas and who transfers any interest in such business. Deduction will not be allowed in year in which liability to pay is incurred unless actual payment is made in that year or before the due date of furnishing of return of income for that year.
Expenditure in excess of subscription, etc. Expenditure incurred wholly and exclusively in connection with transfer of capital asset. Cost of acquisition of capital asset and of any improvement thereto indexed cost of acquisition and indexed cost of improvement, in case of long-term capital assets. Capital gains on transfer of land used for agricultural purposes, by an individual or his parents or a HUF, invested in other land for agricultural purposes subject to certain conditions and limits.
Long-term capital gain invested in long-term specified assets being units of such fund as may be notified by Central Government to finance start-ups. Net consideration on transfer of long-term capital asset other than residential house invested in residential house 10 subject to certain conditions and limits. Capital gain on transfer of machinery, plant, land or building used for the purposes of the business of an industrial undertaking situate in an urban area transfer being effected for shifting the undertaking to a non-urban area invested in new machinery, plant, building or land, in the said non-urban area, expenses on shifting, etc.
Exemption of capital gains on transfer of assets in cases of shifting of industrial undertaking from urban area to any Special Economic Zone subject to certain conditions and limits. Exemption in respect of capital gain arising from the transfer of a long-term capital asset, being a residential property a house or a plot of land , owned by the eligible assessee, and such assessee before the due date of furnishing of return of income under sub-section 1 of section utilises the net consideration for subscription in the equity shares of an eligible company and such company has, within one year from the date of subscription in equity shares by the assessee, utilised this amount for purchase of specified new asset subject to certain conditions and limits.
April 1, , eligible start-up is also included in definition of eligible company. Against 'income from other sources' A. Any reasonable sum paid by way of commission or remuneration for purpose of realising dividend. Any reasonable sum paid by way of commission or remuneration for the purpose of realising interest on securities. Contributions to any provident fund or superannuation fund or any fund set up under Employees' State Insurance Act, or any other fund for welfare of employees, if the same are credited to employees' accounts in relevant funds before due date.
Assessees engaged in business of letting out of machinery, plant and furniture and buildings on hire. Assessees in receipt of family pension on death of employee being member of assessee's family. Any other expenditure not being capital expenditure expended wholly and exclusively for earning such income.
In case of interest received on compensation or on enhanced compensation referred to in section A 2 , a deduction of 50 per cent of such income subject to certain conditions. Interest chargeable to tax which is payable outside India on which tax has not been paid or deducted at source. Disallowance due to TDS default Covered by section 40 a ia and 40 a iia.
Expenditure of the nature specified in section 40A. Expenditure in connection with winnings from lotteries, crossword puzzles, races, games, gambling or betting. Contributions to certain pension funds of LIC or any other insurer up to Rs. Amount up to Rs. Amount paid in any mode other than cash by an individual or HUF to LIC or other insurer to effect or keep in force an insurance on the health of specified person.
Deduction of Rs. Expenses actually paid for medical treatment of specified diseases and ailments subject to certain conditions Interest payable on loan taken by an individual from any financial institution for the purpose of acquisition of a residential house property subject to certain condition. Maximum deduction 50, Interest payable on loan taken by an individual, who is not eligible to claim deduction under 80EE , from any financial institution for the purpose of acquisition of a residential house property subject to certain condition.
Maximum deduction 1,50, Interest payable on loan taken by an individual from any financial institution for the purpose of purchase of an electric vehicle subject to certain condition. Certain donations for scientific, social or statistical research or rural development programme or for carrying out an eligible project or scheme or National Urban Poverty Eradication Fund subject to certain conditions. All assessees not having any income chargeable under the head 'Profits and gains of business or profession'.
All assessees, other than local authority and artificial juridical person wholly or partly funded by Government. Profits and gains from industrial undertakings engaged in infrastructure facility, telecommunication services, industrial park, development of Special Economic Zone, power undertakings, etc. No deduction under this section shall be available to an enterprise which starts the development or operation and maintenance of the infrastructure facility on or after the 1st day of April, No deduction under this section shall be available to an assessee, being a developer, where the development of Special Economic Zone begins on or after the 1st day of April, Profit and gains derived by an eligible start-up from specified business on or after subject to certain conditions All assessees No deduction shall be available to an enterprise which commence the business activity on or after Profits and gains derived by assessee from the business of developing and building affordable housing projects.
Profits and gains derived by an undertaking or an enterprise in special category States Himachal Pradesh, Uttaranchal, Arunachal Pradesh, Assam, Manipur, Meghalaya, Mizoram, Nagaland and Tripura subject to certain limits, time limits and conditions , a which has begun or begins to manufacture or produce any article or thing, not being any article or thing specified in the Thirteenth Schedule, or which manufactures or produces any article or thing, not being any article or thing specified in the Thirteenth Schedule and undertakes substantial expansion during the specified period.
Profits and gains from business of hotels and convention centres in specified areas subject to certain conditions. Entire income from business of collecting and processing or treating of bio-degradable waste for generating power, or producing bio-fertilizers, bio-pesticides or other biological agents or for producing bio-gas, making pellets or briquettes for fuel or organic manure for 5 consecutive assessment years.
Assessee to whom section 44AB applies. Additional employee cost means total emoluments paid or payable to additional employees employed during the previous year. Deduction shall be allowed for first three Assessment Years including the Assessment Year relevant to previous year in which such employment is provided.
Inter-corporate dividend shall be allowed to be reduced from total income of company receiving the dividend if same is further distributed to shareholders one month prior to the due date of filing of return.
Royalty income of author of certain specified category of books up to Rs. Royalty on patents up to Rs. Tax rebate in case of individual resident in India, whose total income does not exceed Rs. TDS default pertaining to any sum other than salary payable outside India or payable to a non-resident which is taxable in the hands of recipient in India. Expenditure is not deductible. If, however, TDS is deposited in a subsequent year, it will be deducted in that year.
No amendment. The law which is applicable for the assessment year will apply for assessment year onwards. Disallowance provisions will not be applicable if TDS is deposited up to the due date of submission of return of income under section 1. Tax is deductible and it is so deducted during the month of March but it is not deposited up to April 30 falling immediately after the end of the financial year.
Tax is deductible but not deducted, but Payee has furnished his return of income after taking into account said income and paid tax thereon. Were deductor has failed to deduct the tax and payee has furnished his return of income after considering such income and paid tax thereon, deductor shall not deemed to be an assessee in default, then it shall be deemed that the assessee has deducted and paid the tax on the date on which the payee has furnished his return of Income.
For self, spouse and dependent children : Rs. Premium up to Rs. For the latest updates on coronavirus tax relief, check IRS. When you claim federal tax credits and deductions on your tax return, you can change the amount of tax you owe. Find credits and deductions for businesses. You can claim credits and deductions when you file your tax return.
How Credits and Deductions Work When you claim federal tax credits and deductions on your tax return, you can change the amount of tax you owe. Deductions can reduce the amount of your income before you calculate the tax you owe. Credits can reduce the amount of tax you owe or increase your tax refund, and some credits may give you a refund even if you don't owe any tax.
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