502CR: Maryland Personal Income Tax Credits for Individuals (2024)

Who files this form

Use the 2024 Maryland Form 502CR to claim the personal income tax credits covered by the form. These include credits for taxes paid to other states and localities, child and dependent care expenses, qualifying teachers, long-term care insurance, seniors, and certain donations and certified expenses.

Eligibility depends on the credit you claim. For example:

• Maryland residents who paid income tax to another state may qualify for the credit in Part A. Nonresidents are not eligible for that credit.
• Resident fiduciaries may use Form 502CR only for taxes paid to other states or localities and for preservation and conservation easements.
• Members of pass-through entities (PTEs) must use Form 500CR, rather than Form 502CR, for the preservation and conservation easements, Community Investment, Endow Maryland, and Maryland historically Black colleges and universities endowment credits.

When it's due

For the Student Loan Debt Relief Tax Credit covered by the 2024 form, the instructions say to submit a certification application to the Maryland Higher Education Commission by September 15 of each year. Claim the credit for the tax year in which the commission certifies it.

What you'll need

Have your Maryland annual return, Form 502, 504, 505, or 515, and each taxpayer’s name and Social Security number available.

Additional documents depend on the credit:

• Taxes paid to another state or locality: Attach a completed, signed copy of the return filed there. A W-2 alone is not enough.
• Child and dependent care expenses: Use the federal credit amount from federal Form 2441.
• Quality Teacher Incentive: Have the tuition paid, institution names, and employer reimbursement amounts available.
• Long-term care insurance: Have each qualifying insured person’s name, Social Security number, age, relationship to you, and premiums paid available.
• Credits requiring certification: Attach the required approval or certification for Community Investment, Endow Maryland, qualifying preceptors, Independent Living, Maryland historically Black colleges and universities endowments, Student Loan Debt Relief, and Maryland Historic Revitalization.
• IRC Section 1341 Repayment Credit: Attach documentation supporting the claim.

For preservation and conservation easements, the property’s value before and after the easement must be substantiated by a certified real estate appraiser.

How to file

1. Enter names as shown on your Maryland return and the Social Security number for each taxpayer. If printing, use blue or black ink only.
2. Complete the applicable credit parts and summary sections. You must complete and submit pages 1 through 4 to receive the listed credits.
3. Transfer the totals to the return lines identified on Form 502CR and attach the form and required supporting documents to your annual return, Form 502, 504, 505, or 515.

You must file Form 500CR electronically to claim business income tax credits other than the Community Investment and Endow Maryland credits. The form also requires electronic filing of your income tax return to claim refundable business income tax credits.

For the Independent Living Tax Credit, file an amended return for the year the qualified expenses were incurred and attach the Maryland Department of Housing and Community Development certification of the approved credit amount.

Common mistakes

• Using W-2 amounts for the other-state credit. Use taxable income and the tax calculated on the return filed with the other state, not W-2 income or withholding.
• Leaving out the state code or other return. Part A requires the two-letter state code for the credit to be allowed. Attach the completed, signed other-state or local return.
• Claiming tax on excluded nonresident income. Part-year residents must not claim a credit for tax paid on nonresident income included on Form 502, line 12.
• Claiming an ineligible long-term care credit. If you answer yes to any of Part E’s four eligibility questions, that insured person does not qualify.
• Claiming the same donation credit twice. Do not claim Community Investment, Endow Maryland, or the Maryland historically Black colleges and universities endowment credit on both Form 500CR and Form 502CR.
• Missing the Endow Maryland income adjustment. The donation amount on Part I, line 2 requires an addition to income. See Instruction 12 in the Maryland Resident Instruction Booklet.

Questions people ask

What if I paid income tax to more than one state?

Complete a separate Form 502CR for each state. Add the amounts from Part A, line 13 and line 14 of those forms. Use one Form 502CR as the summary, entering the combined state credit on Part AA, line 1 and the combined local credit on Part BB, line 1.

Are all Form 502CR credits refundable?

No. Parts AA and BB summarize nonrefundable credits. Amounts exceeding the applicable state or local tax are not refunded. Part CC lists refundable credits. Carryover is allowed only for certain credits under their specific rules.

Can I claim the long-term care insurance credit every year?

No. It is a one-time credit for each insured person. A credit is not allowed if anyone has claimed it for that insured person in another tax year or another taxpayer is claiming it this year.

How much is the Quality Teacher Incentive Credit?

The maximum is $1,500 for each qualifying individual. Only qualifying tuition that was not reimbursed counts. Each spouse who qualifies may claim the credit using a separate worksheet column.

What happens if I do not use the Student Loan Debt Relief credit to repay student loans?

You must use the approved credit to repay your undergraduate or graduate student loan debt within three years after the close of the tax year for which you claimed it. Otherwise, the full credit must be repaid as state taxes for the year the recapture requirement occurs.

Official sources

• https://www.marylandcomptroller.gov/content/dam/mdcomp/tax/forms/2024/502CR.pdf