Key income tax changes

January 06, 1991|By Graeme Browning

Being on active duty in the Persian Gulf has one small benefit at tax time: If you're a Maryland resident, you get a break on filing your state income taxes.

Maryland residents who are serving with the military in "Operation Desert Shield" will get an automatic 60-day extension in which to file 1990 Maryland income tax returns, state comptroller Louis L. Goldstein said at a press conference Friday.

Desert Shield personnel can get an automatic four-month extension for their state tax returns by filing re- quest form 502E by April 15. A one-year extension will also be granted if military personnel in the Persian Gulf can show legitimate need, "and we're very lenient about that," Mr. Goldstein said.

He reminded military personnel that they are allowed to exclude from Maryland tax returns up to $15,000 of active duty pay for service outside the United States or its possessions.

Other changes in Maryland's tax law that will affect taxpayers filing 1990 returns this year include:

Personal exemption increased

* The personal exemption has been increased to $1,200. Taxpayers who are 65 or older, or blind, are eligible for both the regular exemption and an extra exemption of $1,000.

New low-income form

* Single or dependent taxpayers can use a new special purpose tax form -- called Form 123 -- to get a full refund of taxes withheld by their employer if their gross income is less than $5,300. It has only five lines to fill out.

Pension exclusion up

* The maximum pension exclusion for senior citizens in Maryland has been increased to $10,800.

Military exclusion changed

* Retired enlisted military personnel 55 or older who are Maryland residents may exclude up to $2,500 of their military retirement income on the state return if their federal adjusted gross income doesn't exceed $22,500.

New interest subtraction

* Parents who use their federal return to report up to $5,000 in unearned dividend and interest income for a child may now subtract that income on their

Maryland return. Filing by wire

* Marylanders will be able to file tax returns electronically again this year. Offered only through approved tax preparers, this service will help taxpayers get their refunds in two to three weeks, Mr. Goldstein said.

@9 assistance programs

* Joint state-federal taxpayer assistance programs will be offered at nine major shopping malls throughout the state and in federal and state offices during the upcoming tax season.

Where to call

* For a list of locations after Feb. 1, taxpayers should call 962-2590,in Baltimore, or 1-800-TAX-1040, in the rest of Maryland.

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