Harlan Lunsford <hlunsfordnoway[at]bellsouth.net> wrote:
- quote -

Yes, and sent a copy to them when showing how it was calculated.

- quote -

You mean this one:?

* The refundable earned income credit is calculated as
16% of the federal earned income credit, less the state
income tax liability. If this amount is zero or less, no
refund is due.

NO.

- quote -

Yes.

- quote -

Yeah, did that.

- quote -

Thanks. I will do that. This is the 4th straight year
with the same problem. I've worked it out in the past,
but this time they're response is different.

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scott wrote:

- quote -

First of all, I have a real problem with that word they use:
"feel". Down here at least, people use that word as a
synonym for "opine". Either way, something like this
doesn't seem to be a matter for an opinion. (AT least I
don't feel it does.)

Otherwise I was surprised to find the state of Murryland so
liberal to have a refundable EIC! But sure enough, there
it is in writing:

(begin quote from Maryland tax link:
* The credit is calculated as 50% of the earned income
credit claimed on the federal return. A worksheet is
included in the tax booklet (State Earned Income Worksheet)
to help calculate.
* If the credit is more than the Maryland tax
liability, complete the Refundable Earned Income Credit
Worksheet, which is also in the tax booklet.
* The refundable earned income credit is calculated as
16% of the federal earned income credit, less the state
income tax liability. If this amount is zero or less, no
refund is due.
* A Maryland resident taking a state earned income
credit can also take a local income tax credit. Complete the
Local Earned Income Credit Worksheet included in the tax
booklet.
* Nonresidents and part-year residents must prorate
their credits based on the ratio of Maryland adjusted gross
income to federal adjusted gross income.
* Do not claim the credit on Form 123 (Maryland Special
Refund Request). Instead, use Forms 502, 503, 505 or 515.
* Enter the state, local and refundable earned income credit
amounts on the three separate lines provided on the Maryland
return.

If the credit is more than the tax liability:

* The unused state credit may not be carried forward to
any other tax year. The refundable portion of the state
credit may be refunded for individuals with dependents.
* The unused local income tax credit may not be
refunded or carried forward to any other tax year.
(end quote)

1. did you complete the worksheet?
2. does paragraph 3 apply perhaps?
3. were you a full year resident of Maryland?
4. note the necessity for computing three different credits
for state, local, and refundable credits.

You might not really need tax professional help. Try going
down to the local state tax office and asking to speak to
someone versed in income tax matters for an explanation.

Sure sounds convoluted to me.

Cheer$,
Harlan Lunsford, EA in LA

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