Maryland Form 500LU

[dlccpallc]

when will form be avaialble

[sjrcpa]

Which module?

[dlccpallc]

1120S

[sjrcpa]

Why do you think you need it? The consensus on the MD Assoc of CPAs list serve is that pass thru entities do not use this form. It is for individuals only who have one of the modifications. S Corps and Partnerships report their RELIEF act modifications the same way they do other modifications - to the owners.

[dlccpallc]

Critical diagnostic

[sjrcpa]

The diagnostic may be wrong. I know of at least one other software that won't process any 510s until the 511 is final and MD authorizes both forms.

[mpkline]

So how do I report the adjustment for State and Local grant money received by the S-Corp? It is included in federal taxable income, but it is not taxable for MD. So it needs to show on the MD K-1 as a subtraction. To get the subtraction to carry to the MD K-1, I have entered the information in the appropriate fields in Lacerte (screen 44.271) in the 500LU section for "Coronavirus relief grant payment or loan forgiveness". This entry generates the critical diagnostic that the 500LU is not available. 

If you have a "work-around", please share. I'd very much like to get these MD PTE returns filed.

Thanks!

[swiftchariot]

Called MD practicioner hotline just now and she said a form 511 is coming out tomorrow.   Ref also admin 6

[sjrcpa]

"it needs to show on the MD K-1 as a subtraction" That is correct.

"I have entered the information in the appropriate fields in Lacerte (screen 44.271) in the 500LU section for "Coronavirus relief grant payment or loan forgiveness". This entry generates the critical diagnostic that the 500LU is not available. " I think Lacerte has this wrong re: the 500LU.

I've told all of mine they are being extended. Even if the 511 is released tomorrow, it won't be in the software tomorrow.

@swiftchariot Is Admin Release 6 redone yet? Last week's version was not in accordance with the law, nor were the 511 and instructions MD let "leak" ..

[sjrcpa]

You could enter it under Other Subtractions - but then it doesn't flow to Sch G of the MD K-1.

[swiftchariot]

She was just as confused as us honestly.  She said read the instructions and admin 6 (maybe it is revised) when the 511 is released.

The draft 511 says nothing about grant subtractions.  

[mpkline]

I agree that Lacerte probably has this wrong.  It's quite frustrating, to say the least. 

Thanks for your feedback 🙂

[TaxGirl3]

Here's a copy-paste from some correspondence I had with the comptroller's office:

Like other PTE subtractions, subtractions for coronavirus relief grants received by the PTE are passed to the member on the 510K-1, part C., line 5. The PTE will specify the source and amount of the grant on the K-1 part G.

Coronavirus relief payments received by a PTE and passed to a member do not need to be reported on the 502LU. Only Coronavirus relief grants or forgiven loans received by an individual themself should be reported on the 502LU.

So, if you don't need the 511, you should be able to file the 510 and report the subtraction appropriately (as an other subtraction).

Also, as an FYI to those who received MD loans that were converted to grants (COVID-19 Emergency Relief Loan Fund), that conversion took place in 2021 (despite the governor's announcement of the conversion in December 2020) and you'll therefore receive a 2021 1099, with a MD subtraction in 2021. 

[TaxGirl3]

It doesn't flow there automatically, but you can enter the relevant info in the K-1 Supplemental Information screens and it will print to Sch G.

[mpkline]

This is quite helpful. Thank you very much!!

[sjrcpa]

MD Form 511 and 511 Instructions  were released with in the last hour.

Administrative Release 6 has not been revised/posted yet.

So my links don't work. Try these:

https://www.marylandtaxes.gov/forms/20_forms/511.pdf

https://www.marylandtaxes.gov/forms/20_forms/PTE_Booklet_511.pdf

Why isn't the software updated yet? 😏

[swiftchariot]

Thank you, I called MD to address how it should be reflected on the personal return (502SU? Other?).  She could not answer me and told me to email MD.  Here is my email and will reply here when I get a response.

Good morning,

I am a CPA in Maryland and I am in need of guidance for filing a couple clients I have.  These clients are PTE owners who received Covid Relief Grants from Maryland and/or their counties.  The grants are not taxable in MD and have been reflected on the 510 K-1 as a Part C Line 5 Other subtraction which is reference in Part G.  My question is in regards to the personal return.  Where do I enter the Form 510 K-1 Part C Line 5 subtraction in the personal return?  Is it a 502LU (I think not)?  I Believe it should be shown on the 502SU, but what line do you recommend?  And does a 1099G need to be attached to the personal as well as the business return?

Expedited help would be appreciated as the due date is soon.

[sjrcpa]

1099G does not need to be attached to personal return. Comptroller's office has addressed that bit already.

Thanks for volunteering to keep us updated.

[UMDJeremy]

I would think if not 502LU then it would go on 500DM as a dp (decoupling from PTE) which then flows to 502SU line dp.

[swiftchariot]

Here is the response I received from MD.

Good afternoon

Thank you for your recent email to the comptroller of Maryland.

The subtraction on the personal return would be on Line B of the 502SU

Maybe we should create a separate post showing how it all works based this post.