Child and Dependent Care Tax Credit

If you claimed a credit on your federal income tax return for child or dependent care expenses, you may be eligible for a state income tax credit on your Maryland return. This credit is in addition to the subtraction modification available on the Maryland return for child and dependent care expenses.

Qualifications

To qualify for the credit, your federal adjusted gross income (FAGI) must be $50,000 or less. If you are married and filing a separate return, your FAGI must be $25,000 or less.

The state tax credit is calculated as a percentage of the federal tax credit for child and dependent care that you are entitled to on your federal return. The percentage will decline as the FAGI increases. Once the FAGI reaches the maximum amount allowed, no credit may be claimed.

To claim the credit, you must complete Part B of Form 502CR and report the credit on Maryland Form 502, 505 or 515. The credit cannot be claimed on short Form 503.

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.

Federal Adjusted Gross Income for Taxpayers Not Filing Separately

Federal Adjusted Gross Income for Married Taxpayer Filing Separately