Preservation and Conservation Easement Credit

If you donated a perpetual easement to the Maryland Environmental Trust or the Maryland Agricultural Land Preservation Foundation, you may be entitled to a tax credit on your Maryland income tax return.

The credit is calculated as the difference between the value of the property before and after the donation, less any amounts received for the easement. You are entitled to a credit of $5,000 or the amount of state income tax that you owe for the taxable year, whichever is less.

If the property is owned jointly by more than one individual such as a husband and wife, each individual owner is entitled to the credit based on their percentage of ownership.

Qualification

To qualify for the credit, you must meet the following conditions:

• The easement must preserve open space, natural resources, agriculture, forest land, watersheds, significant ecosystems, view sheds or historic property.
• An appraisal by a certified real estate appraiser of the fair market value of the property must be done before and after the donation.
• The easement must have been accepted and approved by the Maryland Board of Public Works after June 30, 2001.

Claiming the credit

The credit can be claimed on Maryland forms 502, 504, 505 or 515. It is not available on short Form 503.

To claim the credit:

• Complete your Maryland return up to the line labeled "Maryland tax."
• Complete Part F of Form 502CR. Fiduciaries must complete the preservation and conservation easements worksheet included in the fiduciaries tax booklet.
• File Form 502CR with your Maryland return.

If the credit exceeds your tax liability, any unused credit may be carried forward for up to 15 years, subject to the $5,000 and state income tax amount due limitations. For more information, contact:

Maryland Environmental Trust
100 Community Place
Crownsville, MD 21032-2023
410-514-7900
1-877-514-7900
E-mail: dnr.state.md.us/met

Maryland Agricultural Land Preservation Foundation
50 Harry S. Truman Parkway
Annapolis, MD 21401
410-841-5860
1-800-492-5590
E-mail: conradja@mda.state.md.us
List of personal income tax credits