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MD 502LU Form

Mary SASLLC
Level 3

When would the Form 502LU be available in ProConnect Tax for Maryland Filers to subtract Unemployment benefits and COVID relief grants to the extent added in their FAGI?

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sjrcpa
Level 15

Probably a few weeks after MD updates their forms.


ex-AllStar

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36 Replies 36
sjrcpa
Level 15

Probably a few weeks after MD updates their forms.


ex-AllStar

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sindyb
Level 1

Have you already worked with Form 502LU? My software is telling me that I need to paperfile Maryland return due to 502LU. Are you familiar with this form? Is there a way to take it out of the tax return?

Thanks!

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AlvinJr
Level 2

Form 502LU is still in development.  Per the MD Comptroller's Office, it won't be available until mid-April.  I haven't seen any drafts, and I haven't worked with it.  And once it is finalized by MD, the software firms will have to integrate it into their software.  The software companies are right in that you cannot currently e-file Maryland returns with 502LU - you have to wait until it is there!  But paper filing doesn't seem like the right answer.  I am putting my affected clients on extension and waiting.  (An alternative would be to file now without out subtracting the unemployment benefits, and then filing an amended return later.  But personally I do not like that alternative.)

richard6
Level 2

I agree with Alvin. Strategy is to efile the IRS return and extend Maryland. Such incompetence!

The prolonged absence of the 502LU has caused many dislocations, obviously. I've experienced a fourfold increase in Maryland unemployment income because of our Plague.

When you extend Maryland, be sure to explain carefully to your clients, in lay language, what exactly is happening here. Assure them that there just might be a Santa Claus-- in their intermediate future...

 

richard6
Level 2

The State of Maryland just extended its 2020 tax filing deadline to July 15, without penalties and interest.

Maybe the 502LU will be available to us by July 14 now!

AlvinJr
Level 2

Besides the (un)availability of Form 502LU, the problem is that Federal AGI passes over to the MD 502.  So if there is $15,000 in unemployment (for example), and $10,200 is excluded from AGI for federal purposes, that MAY have to be added back to Maryland income as an income adjustment - and then the entire $15,000 backed out as a subtraction adjustment.  And if federal AGI is under $150,000 (meaning the $10,000 will be excluded) but more than $100,000 (meaning none of the $10,200 is excludable for Maryland), then somewhere there must be another step on the Maryland return.  I don't blame the Comptroller's Office for this one - they got this dumped on them on February 16th.  I put all of my clients (the ones with with unemployment income) on extension.  I hope this is figured out by October 15th!

Rookydb
Level 1

ATX software has form 502LU available now...come on Proseries

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Krisys
Level 1

Is the form available yet (502lu)? 

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mdtao31
Level 5

WHYnot just add "other" in 502su and deduct the unemployment if taxpayer qualifies

its not brain surgery

regards, Larry

ps stay safe 

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EdCilumbrello
Level 2

There you go thinking again.  This form (MD502LU) must be really complicated.  

mdtao31
Level 5

thats just what we need ed, more comedians

regards, stay safe,Larry

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Mary SASLLC
Level 3

Does anyone have an idea when that would be? February ending, March? Just to set an expectation.

JJ27
Level 2

https://www.marylandtaxes.gov/RELIEFAct/

I talked to State of MD and as of 03/01/2021 they did not have a release date for 502LU. They also could not confirm whether individuals who file non-resident tax returns will be covered by the Act and what form they should use if they are allowed to exclude unemployment benefits. 

Suggestion was to file now the way it is and amend later. 

 

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ScottSerio
Level 1

File now and amend later? That's might generous of them, since, based on my COVID grant, that would mean lending them like $1000 until they come up with the form.

JJ27
Level 2

I agree with you; filing and amending is not a solution. 

My concern is how long it will take MD to release the form and ProSeries to upload it and make it available? State of MD is saying March, but will it be mid March or end of March? Or may be even April with return due by 4/15...

richard6
Level 2

Since Maryland is dragging its heels, find a way to subtract the taxable Federal unemployment income from the Maryland AGI. Can ProSeries find a patch on the 502 to allow this to happen and clear the efile checks??

ahall2010
Level 1

Yes, that's what I thought too.  We should just be able to take on 502SU as other, but then be able to e-file.  Has anyone tried to contact ProConnect about that?

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Bgrant8866
Level 1

I talked to someone at the Comptroller's office today (3/4) and she said they received an update today 

stating that the 502LU won't be ready for 4 to 6 weeks as of today.

sjrcpa
Level 15

That sucks.


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ahall2010
Level 1

That is crazy.  So it won't be available before the deadline most likely.  Can we file it and just take as an other subtraction and then paper file?  I've been trying the Comptroller's office all week and it always says they can't take my call.

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richard6
Level 2

There is no field for "Other Subtraction" on the 502SU, unfortunately...

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SStelling
Level 1

.

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AlvinJr
Level 2

I guess you just e-file the federal return, and get an extension for the Maryland return.

sjrcpa
Level 15

But wait - the unemployment might not be taxable on the federal return.


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sjrcpa
Level 15

MD has to go back to the drawing board on this form now that unemployment may be excluded from federal AGI. 


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Mary SASLLC
Level 3

it possible to just Paper file, Also. I would like to remove it and file for one of my client , who does not want to wait. How can I remove the new American recue act fro the MD return?

 

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Mary SASLLC
Level 3

Also, If anyone knows how to delete a form in Pro Connect, please assist in sharing so i can delete the form 502LU from a clients return. Thank you. 

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JJ27
Level 2

Is 502LU available yet? It doesn’t show up in search. Also, does anyone know if it will be available to non-residents normally filing Form 505?

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AlvinJr
Level 2

502LU doesn't show up in Search.  It also doesn't show up on the Comptroller's website.  I don't see any indication that it is available.

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ScottSerio
Level 1

It still isn't available. This is ridiculous. As someone who received a bunch of grants that Maryland isn't going to tax, the option of paying now and "just filing an amendment" isn't exactly doable. That is like me paying the State of Maryland $1500-$2000 I don't owe them and waiting, until, whenever, for me to get it back. What is the point of helping us out with taxes if we still have to come up with money we don't have. I'm sorry, but the way Comptroller Franchot is handling this is a joke.

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The Comptroller's Office *had* the 502LU ready within a couple weeks of the governor's announcement. It had been pushed out to tax software providers for testing, and had passed. Then the feds put out their own version of unemployment exclusion, with a different exclusion amount and a different income threshold. Back to the drawing board.

We have a drawer full of returns with MD unemployment. For most of them we've filed the federal and put the state on hold. We call or e-mail each one every couple of weeks to keep them up to date. And since MD pushed the regular filing deadline out to July 15th, there's no need to file an extension. The biggest inconvenience for clients is that they have to sign the EL101 authorization to e-file separately from the federal 8879. They're just happy that we're watching out for them and keeping abreast of the many, many recent changes in tax law.

As to the suggestion for creating another subtraction on the SU, keep in mind that the SU relies on the preparer or individual to determine whether they're eligible for the subtraction. And the state didn't want to rely on people getting this (now more complex) calculation right.

Cindy F
Level 1

I just heard that the 502-LU is finally available! It’s hard to believe the Comptroller of Maryland’s office has dragged this out so long. Good luck to everyone as we all finally get to complete all of the tax returns we’ve been unable to process! 

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ahall2010
Level 1

Now how long does it take Intuit to make it available???  

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How long will it take for intuit to update forms

 

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Krisys
Level 1

For form 502lu 

 for people who have already filed and are amending...do I have to redo all of my MD taxes or just fill out the 502lu and attach the 1099g (whatever the unemployment tax form w-2thing is). Thanks 

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sjrcpa
Level 15

You need an amended return. The LU with a copy of the 1099-G is not an amended return.


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