Ch. 2

LAWS OF MARYLAND

10-703. FOR TAX PAID BY INDIVIDUAL TO ANOTHER STATE.

(A)  IN GENERAL.

EXCEPT AS PROVIDED IN SUBSECTION (B) OF THIS SECTION, AN
INDIVIDUAL MAY CLAIM A CREDIT ONLY AGAINST THE STATE INCOME TAX
FOR A TAXABLE YEAR IN THE AMOUNT DETERMINED UNDER SUBSECTION (C)
OF THIS SECTION FOR TAX ON INCOME PAID TO ANOTHER STATE FOR THE
YEAR.

(B)  EXCEPTIONS.

A CREDIT UNDER SUBSECTION (A) OF THIS SECTION IS NOT ALLOWED
TO:

(1)  A RESIDENT, IF THE LAWS OF THE OTHER STATE ALLOW
THE RESIDENT A CREDIT FOR STATE INCOME TAX PAID TO THIS STATE;

(2)  A RESIDENT FOR LESS THAN THE FULL TAXABLE YEAR
FOR TAX ON INCOME THAT IS PAID TO ANOTHER STATE DURING RESIDENCY
IN THAT STATE; OR

(3)  A NONRESIDENT UNLESS THE LAWS OF THE STATE IN
WHICH THE NONRESIDENT RESIDES:

(I)  ALLOW A CREDIT FOR STATE INCOME TAX THAT A
RESIDENT OF THIS STATE PAYS; OR

(II)  EXEMPT THE INCOME OF A RESIDENT OF THIS
STATE.

(C) AMOUNT OF CREDIT FOR RESIDENT.

(1)  EXCEPT AS PROVIDED IN PARAGRAPH (2) OF THIS
SUBSECTION, THE CREDIT ALLOWED A RESIDENT UNDER SUBSECTION (A) OF
THIS SECTION IS THE LESSER OF:

(I)  THE AMOUNT OF ALLOWABLE TAX ON INCOME THAT
THE RESIDENT PAID TO ANOTHER STATE; OR

(II)  AN AMOUNT THAT DOES NOT REDUCE THE STATE
INCOME TAX TO AN AMOUNT LESS THAN WOULD BE PAYABLE IF THE INCOME
SUBJECTED TO TAX IN THE OTHER STATE WERE DISREGARDED.

(2)  IF THE CREDIT ALLOWED A RESIDENT UNDER SUBSECTION
(A) OF THIS SECTION IS BASED ON TAX THAT AN S CORPORATION PAYS TO
ANOTHER STATE, THE CREDIT ALLOWABLE TO A SHAREHOLDER:

(I)  MAY NOT EXCEED THAT SHAREHOLDER'S PRO RATA
SHARE OF THE TAX; AND

(II)  WILL BE ALLOWED FOR ANOTHER STATE'S INCOME
TAXES OR TAXES BASED ON INCOME.

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