2017
MARYLAND
FORM
502AE
COM/RAD-025
SUBTRACTION FOR INCOME
DERIVED WITHIN ARTS AND
ENTERTAINMENT DISTRICT(S)
INSTRUCTIONS
GENERAL INSTRUCTIONS
Who May File
A qualifying residing artist may claim a subtraction for income
derived from the sale, publication, production or performance of an
artistic work within an arts and entertainment district, if the artist
created that artistic work within any arts and entertainment district.
The subtraction is only available to individuals. The subtraction
is available to a single-member limited liability company whose
member is an individual.
Required Attachments
You must attach to your Maryland return a completed Form 502AE.
Qualifying Guidelines
To qualify for the subtraction, you must be a qualifying residing
artist. A qualifying residing artist means an individual who:
1. Owns or rents residential real property in Maryland;
2. Conducts a business in any arts and entertainment district;
and,
3. Derives income from the sale, publication, production or
performance within any arts and entertainment district of an
artistic work that the individual created, wrote, composed or
executed, either solely or with one or more other individuals,
in any arts and entertainment district.
Artistic work - means an original and creative work, whether created,
written, composed, or executed, that falls into one of the following
categories:
1. A book or other writing;
2. A play or performance of a play;
3. A musical composition or the performance of a musical
composition;
4. A painting or other picture;
5. A sculpture;
6. Traditional or ne crafts;
7. The creation of a lm or the acting within a lm;
8. The creation of a dance or the performance of a dance;
9. The creation of original jewelry, clothing, or design; or
10. Any product generated as a result of any of the categories
listed above.
Artistic work does not include any piece or performance created or
executed for industry-oriented or industry-related production such
as a commercial or advertising copy.
Artistic work does not include tailoring services, clothing alterations
or jewelry repair.
Arts and Entertainment District - means an area designated by
the Secretary of the Maryland Department of Commerce as an arts
and entertainment district.
SPECIFIC INSTRUCTIONS
In determining the amount of income allowed as a subtraction, the
following rules shall apply:
Sale and Publication of Artistic Work
A. Income that an artist earns from the sale or publication of
artistic work:
• Created within any arts and entertainment district and
sold within any arts and entertainment district qualies
for the subtraction;
• Created outside any arts and entertainment district does
not qualify for the subtraction; or
• Sold outside any arts and entertainment district does not
qualify for the subtraction.
B. Income received by an artist from internet, mail order and
catalog sales of artistic work shipped from within a district
qualies for the subtraction, if the artist created the artistic
work within any district.
C. Income in the nature of royalties, licenses or other future
revenues from the sale of reproduction or publishing rights
does not qualify for the subtraction.
Production and Performance of Artistic Work
A. Income that an artist earns from a musical performance, from
the performance of a play or dance, from the showing of a lm
produced within a distric t by the ar tist or fr om ac ting in a lm:
• Within any district qualies for the subtraction; or,
• Outside any district does not qualify for the subtraction.
B. Income that an artist earns from the creation or choreography
of a play or dance, the composition of music or the production
of a lm:
• Within any district qualies for the subtraction; or,
• Outside any district does not qualify for the subtraction.
C. Income derived by an artist from the internet broadcast of an
ar ti s ti c wor k f r om wi th in a di st r ic t qua lie s fo r th e subt ra c t io n,
if the artist created the artistic work within a district.
D. Income in the nature of royalties, licenses or other future
revenues from the creation or choreography of a play or dance,
the composition of music or the production of a lm does not
qualify for the subtraction.
Part A - Qualifying Residing Artist
Line 1 - Enter the individual’s name who is the qualifying residing
artist.
Line 2 - Enter the ofcial name(s) of the arts and entertainment
district(s) in which the qualifying artist conducts a
business.
Line 3 - Enter the Maryland address of the residential real property
owned or rented by the qualifying residing artist. Do not
enter a mailing address, such as a post ofce box
or rural box number.
Line 4 - Enter the trade or business name, if any, and the business
address in the arts and entertainment district(s). Do not
enter a mailing address, such as a post ofce box
or rural box number.
Line 5 - Provide a brief description of the artistic work and the
business activities conducted in the arts and entertainment
district(s).
Part B - Income Derived within Arts and Entertainment
District(s)
Line 6 - Provide a brief description of the business transactions
generating the income that qualies for the subtraction.
Line 7 - Enter the amount of the income, to the extent included
in federal adjusted gross income, derived within arts and
en te r t a inm ent di st r ic t(s) t hat qual i es f or t he s ubtr ac ti on.
Include this amount on line dd of Form 502SU or line dd
of Form 505SU.
For more information, visit our Web site at www.marylandtaxes.
gov or email your question to TAXHELP@comp.state.md.us. You may
also call 1-800-638-2937 or from Central Maryland 410-260-7980.
