Question

How to file Maryland K-1 504 form (MD resident)

Forum|Forum|6 years ago
March 6, 2020
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Where/how do I enter the information on the Maryland K-1 (504) form. I'm a MD resident and these forms (the federal K-1 and MD 504 K-1) are resultant being a beneficiary of a trust.

The only information on these pages are under the Distributed Net Taxable Income, Maryland Modifications and Nonresident tax paid by Pass-Through Entity (PTE) section, more specifically boxes 1, 3 and 4.

This information doesn't seem to correlate with the federal K-1 information and I haven't seen anywhere to enter this information. Any help is greatly appreciated.

DavidS127

Enter the federal K-1 into TurboTax, and then when you complete the MD state return TurboTax will ask for the information needed from the MD K-1. The TurboTax question will ask if you need to make any adjustments to your K-1 form, and you will use the information from the MD K-1 to answer those questions.

To enter your Form 504 K-1 additions and subtractions, in your Maryland state tax return find the screen "Here's the income that Maryland handles differently". Scroll down to the Business section of that page, and find the Partnership and S Corporations Adjustments line. Click to Start or Revisit that section. You should get a question "Estate and Trust Additions". Answer Yes, and then on the next screen enter the name of the trust and the amount of your MD K-1 box 3 additions. Next, Continue and you'll get a screen for "Estate and Trust Subtractions". Answer Yes, and you'll get a box to enter your MD K-1 box 4 subtractions (enter as a positive number). Your Maryland Form 502 will now include the additions and subtractions related to your MD K-1.

Note that if any if the income from the federal K-1 is interest or dividend income, you may have answered a question about how much of that was from U.S obligations. TurboTax will automatically deduct that as a subtraction from your Maryland return. So, check line 13 of your Form 502 to make sure you don't "double-up" the Maryland subtraction by entering that "income from U.S. obligations" once as a response when you entered the K-1 and a second time as a trust subtraction.

[Edited 03/06/2020|9:25am PST]

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A

Ajga83Author

Thanks, David. I have completed the MD state return and it has checked everything, but it never asked me about Investments, the K1, etc. Is there a specific section I can navigate to to update?

The three boxes (1, 3 and 4) ask state the following information, which wasn't on the federal K1.

1. Beneficiary's share on net taxable income distributed from estate or trust.

3. Beneficiary's share of Maryland addition modification from estate or trust. (Specify applicable modifications and amounts. See instruction 7, Maryland modifications in fiduciary instructions).

4. Beneficiary's share of Maryland subtraction modifications from estate or trust. (Specify applicable modifications and amounts. See instruction 7, Maryland modifications in fiduciary instructions).

I can't determine where the information from these boxes should be entered.

DavidS127

Here is box by box breakdown of your amounts on the Form 504 K-1, and where they go in TurboTax:

Box 1 is your share of taxable income. I assume this amount is the same as your federal K-1, and if so it is already captured by your federal K-1 entry and doesn't need to be entered again.

Box 3 is for Maryland "additions", and you should have an area in your MD state return for "Additions".

Box 4 is for Maryland "subtractions" and you should have an area in your MD state return for "Subtractions".

To enter your Form 504 K-1 additions and subtractions, in your Maryland state tax return find the screen "Here's the income that Maryland handles differently". Scroll down to the Business section of that page, and find the Partnership and S Corporations Adjustments line. Click to Start or Revisit that section. You should get a question "Estate and Trust Additions". Answer Yes, and then on the next screen enter the name of the trust and the amount of your MD K-1 box 3 additions. Next, Continue and you'll get a screen for "Estate and Trust Subtractions". Answer Yes, and you'll get a box to enter your MD K-1 box 4 subtractions (enter as a positive number). Your Maryland Form 502 will now include the additions and subtractions related to your MD K-1.

Note that if any if the income from the federal K-1 is interest or dividend income, you may have answered a question about how much of that was from U.S obligations. TurboTax will automatically deduct that as a subtraction from your Maryland return. So, check line 13 of your Form 502 to make sure you don't "double-up" the Maryland subtraction by entering that "income from U.S. obligations" a second time as a trust subtraction.

For more information on what is being added and subtracted, see page 4 of the Maryland Fiduciary return instructions PDF at this link.

[Edited 03/06/2020|9:16am PST]

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RLK03

I'm a non-resident and i want to enter sch 504 k1 for my wife and

DavidS127

Use these steps to enter the MD trust Schedule K-1 box 3 and box 4 amounts in your Maryland nonresident tax return:

If your box 4 amount on the MD trust K-1 is for U.S. Govt interest reported in box 1 or box 2 of federal K-1 for the trust, that amount can be entered during the federal K-1 entry by entering the U.S. Govt. interest amount under the applicable box 1 and/or box 2 amount.
If your box 4 amount on the MD trust K-1 is for U.S. Govt capital gains reported in box 4a of the federal K-1, you will be prompted to enter the MD trust K-1 box 4 U.S. Govt interest during the Maryland state return questions.
For MD trust K-1 box 3 "Additions", if you are using TurboTax Download/CD, you can enter these Additions in Forms mode (click the top right in blue bar). Use the Open Form button to search for the “Other Additions Worksheet-Nonresident” form and entering the Additions on Line a (name of trust in text field, and amount in the amount field).
If you have subtractions in the MD trust K-1 other than U.S. Govt interest/gain (already entered in the steps 1 and 2 above), you can use the Open Form button to search and find the “Form 502SU” form and enter the Subtractions not already entered as U.S. Govt interest/gain there.
If you are using TurboTax Online, the steps 1 and 2 above are the same. But, for the MD trust K-1 box 3 Additions and "other than U.S. Govt" box 4 Subtractions, you will need to find the "Here's the income that Maryland handles differently" screen in your Maryland state return questions. On that screen, under the Business heading, you need to find the Partnership and S Corporations Adjustments line. Start or Review that line to enter the box 3 Additions and "other than U.S. Govt" box 4 Subtractions. If the Partnership and S Corporations Adjustments line is not under the Business heading, you may need to contact TurboTax for further assistance.

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ron6612

I am fiduciary filing taxes for my mother who passed away in 2020. There was a trust and I’m preparing the federal 1041. All trust income has been distributed to family members in 2020 and they will have K1’s which will distribute their respective income to their respective 1040 and state tax returns. The taxable trust income is 0 on 1041.

I noted this on Maryland tax website: Maryland follows the federal income tax treatment for fiduciaries of trusts and estates. Under the federal income tax rules, generally any income that is distributed by the fiduciary of the trust or estate during the tax year is not taxable to the trust or estate. Instead, that income is taxable to the beneficiary. Any income not distributed or partially distributed by the fiduciary of the trust or estate during the tax year is taxable to the fiduciary of the trust or estate.

Because of this rule can I forgo from having to prepare and file a Maryland 504 even though the trust did receive interest and 1099 income and Maryland was noted as the state on those forms?