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Endow Maryland Tax Credit

Businesses or individuals who make a donation to a qualified permanent endowment fund at an eligible community foundation may be eligible for a credit against the Maryland State income tax.

The credit may be taken against corporate income tax, personal income tax, insurance premiums tax or public service company franchise tax. However, the same credit may not be applied to more than one tax type.

To qualify for the credit:

Donations of $500 or more of cash or publicly traded securities made by the taxpayer to a “qualified permanent endowment fund” at an “eligible community foundation” that meets certain requirements are eligible for tax credits. Individuals and businesses may claim a maximum of $50,000 in credits per year, representing a donation of no more than $200,000.

The taxpayer must apply to the Maryland Department of Housing and Community Development (DHCD) for a certification for the donation.

For any tax year, the sum of all Endow Maryland tax credits, including any carryover credits, may not exceed the lesser of $50,000 or the total amount of tax otherwise payable by the individual and/or business for the tax year. Excess credits may be carried over for five (5) years.

How the credit is calculated:

The credit is 25% of the value of the approved donation. Each business or individual may claim a credit of up to $50,000. Businesses and individuals claim the Endow Maryland Tax Credit by filing an electronic tax return supporting Business Income Tax Credit Form 500CR. An electronic return must be filed to claim this credit against the Maryland income tax. See exception below.

Exception: Individuals who are eligible to claim the Endow Maryland Tax Credit, and who are not PTE members may elect to claim this credit on Part I of Form 502CR, instead of claiming the credit on Part V of Form 500CR. Taxpayers electing to use Form 502CR to claim the Endow Maryland Tax Credit are not required to file their return electronically.  However, an individual may not claim this credit on both Form 500CR and Form 502CR. PTE members who are eligible for this credit must claim the credit on Business Income Tax Credit Form 500CR.

Individuals who anticipate having a carryover of the Endow Maryland Tax Credit are advised to use Form 500CR instead of Form 502CR.

See Form 500CR Instructions for specific line-by-line instructions. Form 500CR must still be filed electronically.

Add Back required:

Whenever the Endow Maryland Tax Credits are claimed against the income tax, an addition modification must be included for the amount deducted as a donation to the extent that the amount of donation is included in an application for the Endow Maryland Tax Credit.

Documentation required:

A copy of the required approval from the Department of Housing and Community Development DHCD must be attached to the appropriate electronic Maryland Income Tax Return - Form 500 for Corporations, Form 510 and Form 510 Schedule K-1 for Pass-Through Entities, and Form 502 for individuals, electing to use Form 500CR. The Form 500CR section of the electronic return must also be completed.

A copy of the required approval from the DHCD must be attached to Form 502 for those individuals, electing to use Form 502CR.

Contact:

Department of Housing and Community Development
Division of Neighborhood Revitalization
2 N. Charles St., Suite 450
Baltimore, MD 21202
Phone: 410-209-5800
E-mail: endowmaryland.nr@maryland.gov



 
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