2017 Maryland Code
Tax - General
Title 10 - Income Tax
Subtitle 2 - Maryland Taxable Income Calculations for Individual
Part IV - Deductions and Tax Preference Items
§ 10-222. Tax preference items

  • (a) "Tax preference items" defined. -- In this section, "tax preference items" mean the items that:
    • (1) total more than $ 10,000 for an individual return or $ 20,000 for a joint return;
    • (2) are defined under § 57 of the Internal Revenue Code;
    • (3) are modified and apportioned under § 59 of the Internal Revenue Code; and
    • (4) are further modified by excluding:
      • (i) the oil percentage depletion allowance claimed under § 613 or § 613A of the Internal Revenue Code; and
      • (ii) interest described in § 57(a)(5) of the Internal Revenue Code, if the interest is attributable to obligations of:
        • 1. the State of Maryland;
        • 2. a political subdivision or authority of the State; or
        • 3. any other entity authorized under Maryland law to issue obligations the interest on which is excluded from gross income under § 103 of the Internal Revenue Code.
  • (b) Tax preference items of S corporation shareholders. -- Each shareholder of an S corporation shall report the shareholder's pro rata share of the tax preference items of the corporation.
  • (c) Nonresident. --
    • (1) A nonresident shall include as tax preference items only those items that are based on income taxable in the State.
    • (2) If the tax preference items are based on income derived both in and out of the State, the nonresident shall include only a fraction:
      • (i) the numerator of which is the dollar amount of the tax preference items based on income taxable in the State; and
      • (ii) the denominator of which is the total dollar amount of the tax preference items.
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