502AE: Maryland Subtraction for Income Derived within an Arts and Entertainment District (2025)
Maryland · Comptroller of Maryland · Used for tax years 2025
Maryland Form 502AE reports a qualifying residing artist’s subtraction for income derived within arts and entertainment districts. It identifies the artist, districts, business activities, income source, and subtraction amount, and is attached to Form 502 or Form 505.
Who files this form
Attach Form 502AE to your Maryland return if you claim the subtraction for qualifying arts and entertainment district income.
To qualify as a residing artist, you must:
- Own or rent residential real property in Maryland.
- Conduct a business in a designated arts and entertainment district.
- Earn income from the sale, publication, production or performance within a district of artistic work you created within 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. Only qualifying income included in federal adjusted gross income may be subtracted.
What you'll need
The required attachment is a completed Form 502AE, attached to your Maryland return. The form directs you to attach it to Form 502 or Form 505 and report the subtraction on Form 502SU or Form 505SU.
Have these details ready:
- Your name, Social Security number and address, plus spouse information where 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 district business address.
- Brief descriptions of the artistic work, business activities and transactions generating qualifying income.
- The amount of qualifying income included in federal adjusted gross income.
How to file
- Complete the identifying information at the top of Form 502AE. Print using blue or black ink only.
- Complete Part A, lines 1–5, with the qualifying artist’s information, district names, property and business addresses, and a brief business description.
- On Part B, line 6, describe the transactions that generated qualifying income.
- On line 7, enter the qualifying income included in federal adjusted gross income. Also enter this amount on line dd of Form 502SU or Form 505SU.
- Attach the completed Form 502AE to Form 502 or Form 505.
The provided text does not give a mailing address or e-file instructions.
Common mistakes
- Do not enter a mailing address, such as a post office box or rural box number, on line 3 or line 4. Use the residential property address and business address requested.
- Do not use ink other than blue or black when printing the form.
- Do not forget to carry the line 7 amount to line dd of Form 502SU or Form 505SU.
- Do not forget to attach the completed Form 502AE to your Maryland return.
Questions people ask
What is 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.
What kinds of artistic work qualify?
Qualifying categories include original, creative writing, plays, music, pictures, sculpture, traditional or fine crafts, film, dance, original jewelry, clothing or design, and products generated from those categories. Commercial or advertising work, tailoring, clothing alterations and jewelry repair are excluded.
Can internet, mail-order or catalog sales qualify?
Yes. Income from these sales qualifies if the work is shipped from within a district and the artist created it within a district.
Do royalties and licensing income qualify?
No. The instructions exclude royalties, licenses and other future revenues from selling reproduction or publishing rights. They also exclude those revenues from creating or choreographing a play or dance, composing music or producing a film.
Where can I get more information?
Visit marylandcomptroller.gov or call 1-800-638-2937. From Central Maryland, call 410-260-7980.