Maryland requires you to add the following items to the return to arrive at the Maryland Adjusted Gross Income amount.
Tax-Exempt State or Local Bond Interest
Interest from non-Maryland state or local bonds.
State Retirement Pickup
Pickup contributions of a State retirement or Pension member must be added back to income. These contributions are tax deferred for Federal purposes, but not for State tax purposes. The amount will be stated separately in box 14 of your W-2 form. The program will automatically complete this addition for you when the appropriate box 14 information is entered on the W-2.
Lump Sum Distribution From a Qualified Retirement Plan
If you file federal form 4972, Tax on Lump Sum Distributions, you must report part of the distribution as an addition to income. You should receive a 1099-R showing the Lump Sum Distribution. Please refer to 2023 Maryland Instruction booklet on page 5 for the Lump Sum distribution worksheet (12A) for assistance determining your addition.
Other Additions to Maryland Income:
- Part-year residents: adjustments or loss to federal income that were paid or received while a nonresident of Maryland.
- Net additions to income not attributable to decoupling from pass-through entities.
- Net additions to income as reported by the fiduciary, from a trust.
- S corporation taxes from lines 13 and 14 of Maryland Form 502CR, Part A, Tax Credits for Income Taxes Paid to Other States. (Administrative Release 42)
- Total amount of credit(s) claimed to the extent allowed on Form 500CR for the following Business Tax Credits, in the current tax year:
- Enterprise Zone Tax Credit,
- Maryland Disability Employment Tax Credit,
- Small Business Research and Development Tax Credit
- Maryland Employer Security Clearance Costs Tax Credit (do not include Small Business First-Year Leasing Costs Tax Credit)
- Oil percentage depletion allowance as claimed under IRC Section 613.
- Income exempt by federal law or treaty from federal tax that is not exempt from Maryland tax.
- Net operating loss deduction to the extent of a double benefit. See Administrative Release 18.
- Total of your tax preference items from Maryland Form 502TP, line 5; these items of tax preference are defined in IRC Section 57. If the total is more than $10,000 of the tax preference items ($20,000 for married taxpayers filing joint returns) Maryland Form 502TP must be completed and attach, whether or not you are required to file federal Alternative Minimum Tax, Form 6251 with your federal Form 1040.
- Expenses from operating a family day care/child care center in Maryland without having the required registration or license required by the Family Law Article.
- Any refunds of contributions made to the Maryland College Investment Plan, Maryland Broker-Dealer College Investment Plan, or Maryland Prepaid College Trust equal to the amount of contributions that were subtracted from federal adjusted gross income and funds were not used for qualified higher education expenses. See Administrative Release 32 for more information.
- Any refunds by an ABLE account contributor received under the Maryland ABLE Program or any distribution to an ABLE account holder, to the extent the distribution wasn't used for the designated beneficiary or for the benefit of qualified disability expense, that were subtracted from federal adjusted gross income.
- If you sold or exchanged a property for which you claimed a subtraction modification under Senate Bill 367 (Chapter 231, Acts of 2017) or Senate Bill 580/House Bill 600 (Chapter 544 and Chapter 545, Acts of 2012), enter the amount of the difference between your federal adjusted gross income as reportable under the federal Mortgage Forgiveness Debt Relief Act of 2007 and your federal adjusted gross income as claimed in the taxable year.
- Members of pass-through entities that elected to make payments attributable to members’ share of the pass-through 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.
- Members of pass-through entities that are taxed on net income at the entity level in another state.
- Amount of funds withdrawn from a first-time homebuyer savings account for a purpose other than eligible costs for the purchase of a home in the State.
Please click here for more information from the Maryland instructions.