Qualified Vehicle Tax Credit

An individual or corporation may claim a credit against the State income tax for the expense of registering a qualified vehicle in Maryland. The credit may not exceed the lesser of $400 for each qualified vehicle or the State income tax for the tax year.

The credit may be taken against corporate income tax, or the State portion of the personal income tax. A credit may not be allowed against more than one type of tax. Any unused credit amount for the tax year may not be carried forward to any other tax year.

No credit may be earned for any tax year beginning on or after January 1, 2017.

Sole proprietorships, corporations, and pass-through entities, such as partnerships, subchapter S corporations, limited liability companies and business trusts may claim the tax credit.

To qualify for the credit:

“Qualified vehicle” means a Class F (Tractor) vehicle described under § 13-923(a) of the Transportation Article that is titled and registered in Maryland. These “tractors” are the ones which pull trailers, as opposed to farm tractors.

How the credit is calculated:

For each qualified Class F tractor by the taxpayer in Maryland, the Comptroller will allow a Maryland income tax credit for the lesser of:

The expenses of registering a Class F tractor in Maryland during the tax year; or
$400 for each qualified Class F tractor in Maryland; or
The State portion of the Maryland income tax liability for the tax year.
If the credit is more than the state tax liability, the unused credit may not be carried forward to any other tax year.

Documentation required:

It is advisable to retain the proof of Maryland registration in the event of an audit, but no documentation is required to be submitted with the Maryland income tax return. However, the Qualified Vehicle Tax Credit is available only on an electronically-filed income tax return for the tax year in which the credit is being claimed. The Form 500CR section of the electronic return must be completed to claim the Maryland tax credit.

Information republished from Comptroller of Maryland website on March 4, 2015.

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