Source: https://www.marylandcomptroller.gov/content/dam/mdcomp/tax/instructions/2025/resident-booklet.pdf#page=13
Pages 13-13, text extracted with pdftotext (poppler), reading order.

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If you itemized your deductions on the joint federal return, one spouse
may use the standard deduction and the other spouse may claim those
deductions on the federal return that are “attributable exclusively” to
that spouse, plus a prorated amount of the remaining deductions. If it
is not possible to determine these deductions, the deduction must be
allocated proportionately based on your share of the income.

Line 1. Copy the figure for federal adjusted gross income from Line
11a of your federal Form 1040/1040SR onto Line 1 of Form 502.
Line 1a. Copy the total of your wages, salaries and tips
from Line 1z of your federal Form 1040 onto Line 1a of
Form 502. If you and your spouse file a joint federal return but
are filing separate Maryland returns, see Instruction 8.

“Attributable exclusively” means that the individual is solely
responsible for the payment of an expense claimed as an itemized deduction, including compliance with a valid court order or
separation agreement; or the individual jointly responsible for
the payment of an expense claimed as an itemized deduction
can demonstrate payment of the full amount of the deduction
with funds that are not attributable in whole or in part, to the
other jointly responsible individual.

Line 1b. Enter your earned income used to calculate your
federal earned income credit (EIC), Maryland earned income
credit, or poverty level credit (PLC). Earned income includes
wages, salaries, tips, professional fees, and other compensation
received for personal services you performed. It also includes any
amount received as a scholarship that you included in your federal
AGI.

If both spouses choose to itemize on their separate Maryland
returns, then each spouse must determine which deductions
are attributable exclusively to each spouse and prorate the
remaining deductions using the Maryland Income Factor. See
Instruction 26k. If it is not possible to determine deductions
in this manner, they must be allocated proportionately based
on their respective shares of the income. The total amount of
itemized deductions for both spouses cannot exceed the itemized deductions on the federal return.

Line 1c. Enter on Line 1c the amount of net capital gain or loss
reported as taxable income on Line 7a of the federal Form 1040.
Line 1d. Enter on Line 1d the total amount of pensions, IRAs
and annuities reported as income on Lines 4b and 5b of your
federal Form 1040. Taxpayers with an entry on Line 1d
must complete and attach Form 502R.
Line 1e. Place a “Y” in the box if the amount of your investment
income is more than $11,950. You DO NOT qualify for the earned
income tax credit. Investment income generally includes, but is
not limited to, interest, dividends, capital gains, and other types
of distributions including mutual fund distributions.

If you choose to use the standard deduction method, your deduction amount is $3,350. Each spouse must claim their own personal
exemption. Each spouse may allocate the dependent exemptions in
any manner they choose. A dependent may not be claimed twice.
The total number of dependents claimed may not exceed the overall number of dependents.

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Complete the remainder of the form using the instructions for
each line. Each spouse should claim their own withholding and
other credits. Joint estimated tax paid may be divided between
the spouses in any manner provided the total claimed does not
exceed the total estimated tax paid.

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ADDITIONS TO INCOME.

Determine which additions to income apply to you. Write the
correct amounts on Lines 2-5 of Form 502. Instructions for each
line:
Line 2. TAX EXEMPT STATE OR LOCAL BOND INTEREST. Enter
the interest from non-Maryland state or local bonds or other obligations (less related expenses). This includes interest from mutual
funds that invest in non-Maryland state or local obligations. Interest earned on obligations of Maryland or any Maryland subdivision
is exempt from Maryland tax and should not be entered on this line.

PART-YEAR RESIDENTS.

If you began or ended legal residence in Maryland in 2025 see
Instruction 26.
Military taxpayers: If you have non-Maryland military income,
see Technical Bulletin 1.

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INCOME.

Line 3. STATE RETIREMENT PICKUP. Contributions of a State
retirement or pension system pickup amount will be stated separately on your W-2 form (Box 14). The tax on this portion of
your wages is deferred for federal but not for state purposes.

EXEMPTIONS.

Line 4. LUMP SUM DISTRIBUTION FROM A QUALIFIED
RETIREMENT PLAN. If you received such a distribution, you
will receive a Form 1099R showing the amounts distributed. You
must report part of the lump sum distribution as an addition to
income if you file federal Form 4972.

Determine what exemptions you are entitled to and complete the
EXEMPTIONS area on Form 502. Form 502B must be completed
and attached to Form 502 if you are claiming one or more
dependents.
EXEMPTIONS ALLOWED
You are entitled to claim qualified exemptions on your Maryland
return. The amount of your Maryland exemption may be limited
by the amount of your federal adjusted gross income. See Exemption Amount Chart (10A).

Use the LUMP SUM DISTRIBUTION WORKSHEET (12A) to determine the amount of your addition.
LUMP SUM DISTRIBUTION WORKSHEET (12A)
1. Ordinary income portion of distribution from
Form 1099R reported on federal Form 4972
(taxable amount less capital gain amount) . . . . . . . $_ _____________

You and your spouse are permitted to claim additional exemptions
if, on the last day of the taxable year, you or your spouse is age 65
or older or blind. These additional exemptions are in the amount of
$1,000 each. An individual who turns 65 or becomes blind after the
last day of the taxable year, but before they file their return, does
not qualify for the additional exemption. If any other dependent
claimed is 65 or over, you also receive an additional exemption of
up to $3,200. Make sure you check both boxes (4) and (5) of Form
502B for each of your dependents who are age 65 or over. You must
provide the date(s) of birth for all individuals listed on the 502B.

2. 40% of capital gain portion of distribution from
Form 1099R. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . $_ _____________
1. Add Lines 1 and 2.. . . . . . . . . . . . . . . . . . . . . . . . . $_ _____________
2. Enter minimum distribution allowance from
federal Form 4972 . . . . . . . . . . . . . . . . . . . . . . . . . $_ _____________

Enter the number of exemptions in the appropriate boxes based
upon your entries in Parts A, B and C of the exemption area of
the form. Enter the total number of exemptions in Part D. The
number of exemptions for Part C is from Total Dependent
Exemptions, Line 3 of Form 502B.

3. Subtract Line 4 from Line 3. This is your addition
to income for your lump sum distribution. Enter
on Form 502, Line 4. If this amount is less than
zero, enter zero. . . . . . . . . . . . . . . . . . . . . . . . . . . $_ _____________

PART-YEAR RESIDENTS AND MILITARY
You must prorate your exemptions based on the percentage
of income subject to Maryland tax. See Instruction 26 and
Technical Bulletin 1.

Note: If you were able to deduct the death benefit exclusion on
federal Form 4972, allocate that exclusion between the ordinary and
capital gain portions of your distribution in the same ratio before
completing this schedule.
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