Form 502UP — Underpayment of Estimated Income Tax by Individuals

# preamble

COM/RAD 017 08/24 2024UNDERPAYMENT OF

# ESTIMATED INCOME TAX BY INDIVIDUALS MARYLAND FORM

502UP ATTACH THIS FORM TO FORM 502, 505 or 515. IMPORTANT: REVIEW THE INSTRUCTIONS BEFORE COMPLETING THIS FORM. SEE SPECIAL INSTRUCTIONS FOR FARMERS AND FISHERMEN OR IF YOUR INCOME IS TAXABLE BY ANOTHER STATE. 11. Divide total Maryland income on Line 1 into earnings per period (See Instructions.) . 11. 12. Divide earnings per period on Line 11 by the amount on Line 1 to determine the percent per period. If less than zero, enter zero. ......... 12. 13. Payments required. Multiply the amount on Line 10 by the percent on Line 12 for each period. ..................... 13. 14. Estimated tax paid and tax withheld per period (See Instructions.) ........ 14. 15. Underpayment per period (subtract Line 14 from Line 13). If less than zero, enter zero. 15.

# COMPUTATION OF INTEREST

16. Interest factor ................... 16. 0.0167 0.0252 0.0340 0.0283 Multiply underpayment on Line 15 by the factor on Line 16 for each period ...... 17. 18. Interest. Add amounts on Line 17. Place total in appropriate box on Line 49 of Form 502 or Line 52 of Form 505 and include amount in your total payment with return . ........................................ 18. First Name MI Last Name Social Securit y Number Spouse's First Name MI Spouse's Last Name Spouse's Social Security Number

# EXCEPTIONS WHICH AVOID THE UNDERPAYMENT INTEREST

No interest is due and this form should not be filed if: A. The tax liability on gross income after deducting Maryland withholding is $500 or less, or, B. You have made four quarterly payments as required, each equal to or more than one-fourth of either of the following: (1) 110% of last year's taxes , or (2) 90% of the current year's taxes . COMPUTATION OF UNDERPAYMENT - LINES 1 THROUGH 15 1. Total Maryland income (from Line 16 of Form 502 or Line 8 of Form 505NR) ............... 1. 2. 2024 Maryland and local tax (from Line 34 of Form 502 or Line 37 of Form 505) ............... 2. 3. Refundable earned income credit (from Line 42 of Form 502 ) ....... 3. 4. Refundable income tax credits (from Line 43 of Form 502 or Line 46 of Form 505) ........................................... 4. 5. Total tax developed on tax preference items ................... 5. 6. Total (Add Lines 3, 4 and 5) ................................................. 6. 7. Balance (Subtract Line 6 from Line 2) ........................................... 7. 8. Multiply Line 7 by 90% (.90) ................................................. 8. 9. a. 2023 tax: Enter Line 34 of 202 3 Form 502 or Line 37 of 202 3 Form 505 (See Instructions.). ............................... 9a. b. Multiply Line 9a by 110% (1.10) ........................................... 9b. 10. Minimum withholding and/or estimated tax required (Enter the lesser of Line 8 or 9b. If first-time filer, enter Line 8 ) ............................................... 10.

# DUE DATES OF INSTALLMENTS INSTALLMENT PERIODS

1st Period April 15, 2024 Jan 1 to Mar 31 2nd Period June 15, 2024 Jan 1 to May 3rd Period Sept 15, 2024 Jan 1 to Aug 4th Period Jan 15, 2025 Jan 1 to Dec 31

08/24

UNDERPAYMENT OF ESTIMATED INCOME TAX BY INDIVIDUALS INSTRUCTIONS 2024MARYLAND FORM 502UP

# GENERAL INSTRUCTIONS

Section 10-815 of the Tax-General Article of the Annotated Code of Maryland requires every individual, or individuals filing jointly, who receives taxable income that is not subject to Maryland withholding, or from which not enough Maryland tax is withheld, to make estimated tax payments and file Form PV if the income can be expected to develop a tax of more than $500 in excess of the Maryland withholding. Furthermore, Sections 13-602 and 13-702 stipulate that any individual so required to file, who either (1) fails to file on the date or dates prescribed; ( 2) fails to pay the installment or installments when due; or, (3) estimates a tax less than ninety (90) percent of the developed tax shown on the return for the current tax year and less than 110% of the tax that was developed for the prior year, shall be subject to penalty and interest.

# WHO MUST FILE

If you believe you are liable for interest for one of the reasons outlined above, or if you believe you are not liable for interest due to an unequal distribution of income, complete and submit this form with your tax return. If you meet one of the exceptions shown on page 1, you are not required to file this form. If you want us to figure the interest for you, complete your return as usual. Do not file Form 502UP. You will be notified of any interest due.

# SPECIFIC INSTRUCTIONS

Lines 1 through 10 are used to determine the minimum amount required to be paid by estimated or withholding tax to avoid i nterest. Line 1 Enter your Maryland adjusted gross income from Line 16 of Form 502 or Line 8 of Form 505NR. Alternatively, if you itemize deductions, you may elect to enter taxable net income from Line 20 of Form 502 or net income from Line 11 of Form 505NR. Lines 2-4 Enter the amount specified from your 2024 Form 502 or 505. Line 5 Multiply the amount on Line 5 of Form 502TP by the highest state rate used on your tax return. Add to this result the amount on Line 5 of Form 502TP multiplied by your local (or special nonresident) tax rate. Line 9a 2023 tax: Enter Line 34 of 2023 Form 502 (reduced by any credits on Line 9 of Part CC of 2023 Form 502CR); or Line 37 of 2023 Form 505 (reduced by any credits on Line 45 of 2023 Form 505 and any credits on Line 9 of Part CC of 2023 Form 502CR). If your 2023 tax was corrected or amended, be sure to include any additional tax when calculating your total tax for the year. L ines 11 through 15 will determine which periods are underpaid and the amount of underpayment. Line 11 Enter in each column the income received for the period of the year covered by that column. If your income was received evenly throughout the year, enter one-fourth of Line 1 in column 1, one-half of Line 1 in column 2, three-fourths of Line 1 in column 3 and an amount equal to Line 1 in column 4. You may elect to report your income based on the actual dates of receipt. If so, enter income received between January 1 and March 31 in the first column; enter income received between January 1 and May 31 in the second column; enter income received between January 1 and August 31 in the third column and 100% of your income in the fourth column. NOTE: R egardless of whether you use an even distribution or base your entries on the actual receipt dates, each succes s ive column will include the amount from the prior columns. See the example in the instructions for Line 14. Line 14 Enter in each column the sum of any estimated payments you have made and any Maryland tax withheld from the beginning of the year to the due date at the top of that column. Include any nonresident tax paid by S corporations, partnerships, or limited liability companies on your behalf. NOTE: Just as in Line 11, each successive entry will include the amount from the prior columns. For example, if you paid $500 in estimated payments each quarter, the first column will contain $500, the second $1,000, the third $1,500, and the fourth $2,000. Overpayments in later quarters may not be used to offset underpayments in previous quarters. L ines 16 through 18 determine the amount of interest due for each underpaid quarter. Line 16 The factors represent the interest rate for the portion of the year between the due date of each quarter and the due date of the next quarter. Interest is computed at a rate of 0.8339% per month for due dates prior to January 1, 2025. Interest is computed at a rate of 0.9568% per month after December 31, 2024. For more information, visit marylandtaxes.gov . I f your estimated tax payment was not timely, but was paid earlier than the due date of the next quarter, adjust the factor as follows: 1st Period - For payments due by April 15, 2024 that were not paid by April 15, 2024 but paid earlier than June 15, 2024, count the number of months from the due date of April 15, 2024 that the payment was late. Treat a partial month as one month. Divide that number by twelve and multiply it by the 10.0075% annual rate. Apply this adjusted factor to the underpaid amount on Line 15. 2nd Period - For payments due by June 15, 2024 that were not paid by June 15, but paid earlier than September 15, 2024 count the number of months from the due date of June 15, 2024 that the payment was late. Treat a partial month as one month. Divide that number by twelve and multiply it by the 10.0075% annual rate. Apply this adjusted factor to the underpaid amount on Line 15. 3rd Period - For payments due by September 15, 2024 that were not paid by September 15, 2024 but paid earlier than December 15, 2024, count the number of months from the due date of September 15, 2024 that the payment was late. Treat a partial month as one month. Divide that number by twelve and multiply it by the 10.0075% annual rate. Apply this adjusted factor to the underpaid amount on Line 15. For payments made on or later than December 15, 2024, apply the interest factor of 0.0340 to the underpaid amount on Line 15. 4th Period - For payments due by January 15, 2025 that were not paid by January 15, 2025 but paid earlier than April 15, 2025, count the number of months from the due date of January 15, 2025 that the payment was late. Treat a partial month as one month. Divide that number by twelve and multiply it by the 11.4825% annual rate. Apply this adjusted factor to the underpaid amount on Line 15. Line 17 Using the factors on Line 16 or the adjusted factor described above, determine the amount of interest due for each quarter and enter the amounts in the appropriate columns. Line 18 Add all interest amounts in columns 1 through 4 on Line 17. Enter the total interest on the appropriate line of your tax return. If the interest calculated on Line 18 is zero because your income was not received evenly throughout the year, enter code number 301 on one of the lines marked "code numbers" on the Form 502, 505, or 515 and attach this form to your return.

# FARMERS AND FISHERMEN

If your gross income from farming or fishing is at least two-thirds of your total estimated gross income for the year, the 2024 declaration and full payment of the estimated tax is due on or before January 15, 2025. In lieu of filing the declaration, you may elect to file your full and complete annual return on or before March 1, 2025 and make full payment of the developed tax at that time. If you fail to do either of the above, and the income not subject to withholding or from which not enough Maryland tax is withheld would be expected to develop a tax of more than $500, then you are subject to interest. To compute the applicable interest charge, complete Lines 1 through 10 of this form. Enter the amount from Line 10 on Line 13, column 4 and complete the rest of the form. Only column 4 will have entries. To claim exemption from this interest charge or to use the special calculation, enter code number 300 on one of the lines marked "code numbers" on the Form 502, 505, or 515. Attach this form to your return if you used the special calculation.

# INCOME TAXABLE BY ANOTHER STATE

If at least 90% of your taxable income is taxable by another state, and the underpayment is not greater than the local tax, no interest is due and you are not required to file this form. To claim exemption from this interest charge, enter code number 302 on one of the lines marked "code numbers" on the Form 502, 505, or 515. For more information, visit marylandtaxes.gov or email your question to TAXHELP@marylandtaxes.gov. You may also call 1-800-638-2937 or from Central Maryland 410-260-7980.