502AE: Maryland Subtraction for Income Derived within an Arts and Entertainment District (2024)
Maryland · Comptroller of Maryland · Used for tax years 2024
Maryland Form 502AE reports a qualifying residing artist’s business activities, qualifying income sources, and subtraction claimed for income derived within arts and entertainment districts. It is attached to Form 502 or Form 505.
Who files this form
Attach Form 502AE to your Maryland return if you are claiming the subtraction for qualifying income earned within an arts and entertainment district.
To qualify, you must be an artist who:
- Owns or rents residential real property in Maryland.
- Conducts a business in an arts and entertainment district.
- Earns income from the sale, publication, production or performance within a district of artistic work you created in a district, alone or with others.
The subtraction is available only to individuals, including a single-member limited liability company whose member is an individual.
What you'll need
You must attach a completed Form 502AE to your Maryland return. Have the following information ready:
- Your name, Social Security number and address, plus your spouse’s name and Social Security number if applicable.
- The qualifying artist’s name and Maryland residential property address.
- The official names of the arts and entertainment districts where the artist conducts business.
- The trade or business name, if any, and business address within the districts.
- Brief descriptions of the artistic work, business activities and transactions generating qualifying income.
- The qualifying income amount included in federal adjusted gross income.
You will also report the subtraction on Form 502SU or Form 505SU.
How to file
- Complete Form 502AE using blue or black ink.
- In Part A, enter the artist’s name, district names, residential and business addresses, and a brief description of the artistic work and business activities.
- In Part B, describe the transactions generating qualifying income on line 6. On line 7, enter the qualifying income amount, limited to the amount included in federal adjusted gross income.
- Carry the line 7 amount to line dd of Form 502SU or Form 505SU.
- Attach Form 502AE to Form 502 or Form 505.
The text does not provide mailing addresses or e-filing directions.
Common mistakes
- Do not use a post office box or rural box number for the residential address on line 3 or business address on line 4.
- Use blue or black ink only.
- Do not forget to attach the completed Form 502AE to your Maryland return and carry the subtraction to line dd of Form 502SU or Form 505SU.
- Do not include royalties, licenses or other future revenues from reproduction or publishing rights, or from creating or choreographing a play or dance, composing music or producing a film.
- Do not treat commercial or advertising work, tailoring services, clothing alterations or jewelry repair as qualifying artistic work.
Questions people ask
What counts as an arts and entertainment district?
It is an area designated as an arts and entertainment district by the Secretary of the Maryland Department of Commerce.
Can internet, mail-order or catalog sales qualify?
Yes. Income from these sales qualifies if the work was created within a district and shipped from within a district.
Must I create and sell the work in the same district?
The instructions allow work created within any arts and entertainment district and sold within any arts and entertainment district. Work created outside all districts, or sold outside all districts, does not qualify.
Can income from an internet broadcast qualify?
Yes. Income an artist receives from an internet broadcast of artistic work from within the district qualifies.
Where can I get more information?
Visit marylandtaxes.gov, email TAXHELP@marylandtaxes.gov, or call 1-800-638-2937. From Central Maryland, call 410-260-7980.