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Child and Dependent Care Tax Credit

If you were eligible for a Child and Dependent Care Credit on your federal income tax return, Form 1040 or 1040A for the tax year, you may be entitled to a credit on your Maryland state income tax return. The credit starts at 32.5% of the federal credit allowed, but is phased out for taxpayers with federal adjusted gross incomes above $41,000 ($20,500 for individuals who are married, but file separate income tax returns). No credit is allowed for an individual whose federal adjusted gross income exceeds $50,000 ($25,000 for married filing separately). This credit is in addition to the subtraction modification available on the Maryland return for child and dependent care expenses.

To claim the credit, you must complete Part B of Form 502CR and submit with your Maryland income tax return. You must report the credit on Maryland Form 502, 505 or 515

You can use the tables below to determine the percentage of the federal credit that can be claimed on your Maryland return:

  • Find the correct decimal amount that applies to your FAGI in the appropriate table.
  • Multiply your FAGI by the decimal amount.
  • Complete your Maryland return through the line labeled "Maryland Tax."
  • Complete Form 502CR, following the instructions provided.
  • Submit your completed Form 502CR with your Maryland return.

If the credit is more than your tax liability, the unused credit may not be carried forward to another tax year.

CREDIT FOR CHILD AND DEPENDENT CARE EXPENSES CHART
If your filing status is Married Filing Separately and your federal adjusted gross income is: Decimal Amount For all other filing statuses, if your federal adjusted gross income is:
At least But less than   At least But less than
$0 $20,501 .3250 $0 $41,001
$20,501 $21,001 .2925 $41,001 $42,001
$21,001 $21,501 .2600 $42,001 $43,001
$21,501 $22,001 .2275 $43,001 $44,001
$22,001 $22,501 .1950 $44,001 $45,001
$22,501 $23,001 .1625 $45,001 $46,001
$23,001 $23,501 .1300 $46,001 $47,001
$23,501 $24,001 .0975 $47,001 $48,001
$24,001 $24,501 .0650 $48,001 $49,001
$24,501 $25,001 .0325 $49,001 $50,001
$25,001 or over .0000 $50,001 or over


 
Links for Tax Credits and Deductions
General Information
Tax Credits and Deductions
  College Savings Plans Deductions
  Poverty Level Credit
  Preservation and Conservation Easement Credit
  Income Taxes Paid to Other States Credit
  Heritage Structure Rehabilitation Tax Credit
  Solar Energy Grant Subtraction
  Tax Subtraction for Two-Income Families
  Determine Tax Credits and Deductions
  Long-Term Care Insurance Credit
  Quality Teacher Incentive Credit
  Earned Income Tax Credit
  Aquaculture Oyster Float Credit
  Child or Dependent Care Expenses
  Neighborhood Stabilization Credit
  Child and Dependent Care Tax Credit
  Hurricane Tax Relief
 
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