Maryland Individual Tax preparers Exam (Maryland and Federal Only) Questions and Verified Answers| Updated 2027

Maryland Individual Tax preparers Exam (Maryland and Federal Only) Questions and Verified Answers| Updated 2027 Addback - State Tax Refund - ANSWER -Must add federal itemized state/local tax deduction. Addback - Depreciation - ANSWER -Bonus depreciation differences: MD Addition/Subtraction. Military Retirement Subtraction - ANSWER -Separate from Pension Exclusion; up to statutory limit. Railroad Retirement Benefits - ANSWER -Federal tax rules apply; generally excluded in MD. Est. Tax Requirement in Maryland - ANSWER -Owe $500+ after withholding triggers estimated payment. Form 502 - ANSWER -Maryland resident return. Form 505 / 505NR - ANSWER -Maryland nonresident return calculations. Form 502SU - ANSWER -Subtraction modifications schedule. Form 502B - ANSWER -Dependent information form. Form 502UP - ANSWER -Underpayment penalty computation. MW507 - ANSWER -State withholding form for employees. Maryland Lottery Winnings - ANSWER -Fully taxable in MD. Preparer Record Retention - ANSWER -Keep client records 3 years. MD Preparer Registration - ANSWER -Required unless CPA, EA, or attorney. Preparer - ANSWER -Cannot Negotiate client's refund check (illegal). Preparer Ethical Duties - ANSWER -Honesty, accuracy, maintain confidentiality, no guarantee of refund. MD Resident Definition - ANSWER -Domicile in Maryland OR present 183+ days. MD Part-Year Resident - ANSWER -Files Form 502 with dates of residency. MD Nonresident - ANSWER -Files Form 505 + 505NR for MD-source income. Local (County) Tax - ANSWER -Applies to MD residents; based on county rate. Out-of-State Municipal Bond Interest - ANSWER -MD Addition (taxable). U.S. Treasury Interest - ANSWER -MD Subtraction (tax-exempt). Social Security - Maryland - ANSWER -Fully exempt. Maryland Pension Exclusion - ANSWER -For age 65+ (or disabled), qualified pension only. Standard Deduction - Maryland - ANSWER -15% of MD AGI with min/max limits. Maryland Itemizing Rules - ANSWER -Must itemize on MD if itemizing federally; same structure but differences apply. Personal Exemptions - Maryland - ANSWER -Income-based; up to $3,200 depending on AGI.