A Maryland resident couple filing jointly and who both have income subject to tax may be able to subtract from their taxable income the lesser of $1,200 or the income of the spouse with the lower income. This is the Two-Income Subtraction.
When completing the "Two-Income Married Couple Subtraction Worksheet" included in the Maryland Form 502 instructions, ProWeb allocates additions and subtractions to federal AGI between the spouses where known and allocates evenly where not known. If any of the following additions and subtractions to AGI is present in the return, you will need to examine it to ensure an even split is correct:
- Additions:
- Tax-exempt interest on non-Maryland state and local bonds
- Lump sum distributions
- Other Maryland-specific additions with a code letter
- Subtractions:
- Taxable refunds of state taxes
- Child and dependent care expenses
- Income received during the period of nonresidence
- Other Maryland-specific subtractions with a code letter from Form 502SU
Note: Based on the facts and circumstances, it may or may not be correct to allocate these additions and subtractions evenly to each spouse.
If you're not sure if a two-income subtraction is needed, or if you're getting a validation error en route to e-file that indicates the two-income subtraction is missing, print the return and examine the additions and deductions to see which ones require allocation in the two-income subtraction menu.
To change an allocation on the Two-Income Worksheet in TaxSlayer ProWeb, from the Maryland Return Menu select:
- Subtractions from Income
- Two-income Subtraction - For the particular addition or subtraction, enter each spouse's portion. Note that if the sum of the two amounts isn't equal to the total addition or subtraction, the 50/50 split will be retained.
Note: This is an article on entering the Maryland Two-Income Subtraction in TaxSlayer ProWeb. It is not intended as tax advice.
Additional Information:
Maryland: Personal tax tip #50 Families and Maryland Income Taxes