502TP: Computation of Tax Preference Income Modification (2025)
Maryland · Comptroller of Maryland · Used for tax years 2025
Maryland Form 502TP calculates the addition to income for certain tax preference items, including depletion, pre-1987 depreciation, intangible drilling costs, and excluded gains on certain small business stock. It is attached to your income tax return.
Who files this form
For tax year 2025, an individual or fiduciary of an estate or trust must complete Form 502TP if total tax preference items on line 2 exceed $10,000, or $20,000 for a joint return. File it with the income tax return.
The listed tax preference items are depletion, depreciation under pre-1987 rules, intangible drilling costs, and the exclusion for gains on the sale of certain small business stock.
Taxpayers filing separate Maryland returns must compute their additions to income on separate Forms 502TP.
What you'll need
- Federal Form 6251: The form directs you to complete it. Use line 2t for intangible drilling costs and line 2h for the exclusion of gains on certain small business stock.
- Depletion and depreciation information, if applicable: Follow the calculations for lines 1a and 1b rather than simply copying federal amounts.
- Your income tax return: Attach Form 502TP to it.
- Identifying information: The form has fields for your name and Social Security number, and your spouse’s name and Social Security number.
How to file
Complete federal Form 6251, then calculate the applicable tax preference items on Form 502TP.
- Add lines 1a through 1d and enter the total on line 2.
- Enter the exclusion on line 3: $10,000, or $20,000 for a joint return. Nonresidents and part-year residents may need a partial exclusion.
- Subtract line 3 from line 2. If the result is below zero, enter zero on line 4.
- Multiply line 4 by 50% and enter the result on line 5.
- Transfer that amount to Form 502, line 5; Form 504, Schedule A, line 3; or Form 505, line 19, as applicable.
Attach Form 502TP to your income tax return. The supplied text does not give a mailing address or e-filing directions.
Common mistakes
- Skipping the Maryland addition because you do not owe federal Alternative Minimum Tax: The addition is required when your total tax preference items exceed the stated threshold, regardless of whether you are subject to federal AMT.
- Including other federal AMT adjustments: The form says those adjustments do not affect Maryland tax preference items.
- Combining depreciation calculations: Calculate excess depreciation separately for each property and include only positive amounts on line 1b.
- Using one Form 502TP for separate Maryland returns: Each taxpayer must compute the addition on a separate form.
- Using the wrong ink: Print using blue or black ink only.
Questions people ask
How much of my tax preference income is taxable?
Subtract the applicable exclusion from your total tax preference items, entering zero if the result is negative. Multiply the remaining amount by 50% to calculate the addition to income.
What if I am a nonresident or part-year resident?
Include only tax preference items properly allocated to Maryland. If all your reported tax preference items are allocated to Maryland, you may claim the full exclusion. If they are based on income from both inside and outside Maryland, multiply the exclusion by the Maryland-taxable preference items divided by total preference items.
Does the depletion preference apply to independent oil and gas producers?
The form says this preference does not apply to an independent producer or royalty owner claiming percentage depletion for oil and gas wells.
How are an S corporation’s tax preference items handled?
Individual shareholders must treat their apportioned shares of the corporation’s tax preference items as their own. Each shareholder reports a pro rata share consistent with the federal method used to pass through and apportion net operating losses.