Maryland Form 504 is the Fiduciary Income Tax Return, and you file it as the trustee of a trust or the personal representative of an estate to report and pay Maryland income tax on income that the trust or estate keeps instead of paying out to its beneficiaries. You file it with the Comptroller of Maryland, and the trick is that you only pay tax on the income the trust or estate retains, because income that gets distributed is taxed to the beneficiary on their own return.
The form looks plain, but the math flows in a strict order, and one wrong figure on the first line carries an error all the way to the bottom. The top Maryland tax rate for resident fiduciaries reached 6.50% for tax year 2025, and nonresident fiduciaries face an extra 2.25% special rate, so a small mistake on a high-income estate can cost real money. This guide walks you through the current Tax Year 2025 form (revision code COM/RAD-021, 09/25) line by line, with named examples for each box.
Here is what you will learn:
- 🧾 Who counts as a “fiduciary” and whether you even have to file Form 504 this year.
- 📋 The exact documents and numbers to gather before you open the form.
- ✍️ A line-by-line walkthrough of every box, from federal taxable income on Line 1 to the total amount due on Line 40.
- 👥 Three full filled-out examples for an estate, a resident trust, and a nonresident trust.
- ⚠️ The mistakes that delay or reject returns, plus answers to the questions filers ask most.
What Form 504 Is and Who Must File It
Form 504 is Maryland’s income tax return for trusts and estates, and it exists because the income earned by a dead person’s estate or by a trust still has to be taxed somewhere. Under the rules the Comptroller of Maryland explains in the fiduciary booklet, income the fiduciary distributes during the year is taxed to the beneficiary, while income the fiduciary keeps is taxed to the trust or estate on Form 504. The form reports that retained income, applies Maryland modifications, and figures both the state tax and the local (county) tax.
A “fiduciary” is any person who holds legal title to property for the benefit of someone else. That includes a trustee of a trust and a personal representative (executor) of an estate. The word is not limited to lawyers or banks. If a relative named you executor of a will, you are a fiduciary in the eyes of Maryland tax law.
You must file Form 504 if two things are both true. First, the estate or trust is required to file a federal fiduciary return (federal Form 1041) or is exempt under IRC Sections 408(e)(1) or 501 but must file federal Form 990-T for unrelated business income. Second, the estate or trust has Maryland taxable income. Both resident and nonresident fiduciaries use the same Form 504.
A few people who file a federal return do not file Form 504. An agent who only holds custody of a principal’s property, and a guardian of a minor or disabled person, file the principal’s or ward’s own income tax return instead. Filing Form 504 when you should have filed an individual return creates a mismatch that the Comptroller’s office will question.
Residency drives how much income gets taxed. A personal representative is a resident fiduciary if the decedent was domiciled in Maryland at death, and a trust is a resident if it was created by a Maryland decedent’s will, holds property from such a will, has a current Maryland-resident grantor, or is principally administered in Maryland. A resident fiduciary is taxed on all income from any source. A nonresident fiduciary is taxed only on Maryland-source income and must also complete Form 504NR.
Before You Start: Documents and Information You Need
Gather everything below before you write a single number, because Form 504 starts with figures pulled straight from your finished federal return. Filing out of order is the most common reason fiduciaries have to start over.
- Completed federal Form 1041. Maryland law makes you start with federal taxable income from Line 23 of Form 1041, so the federal return must be done first. Without it, Line 1 of Form 504 is a guess.
- The trust instrument or the will and letters of administration. These prove who the fiduciary is and whether the trust is simple, complex, or grantor type. The wrong entity box changes how the income is taxed.
- The Federal Employer Identification Number (FEIN) of the estate or trust. The Comptroller indexes the return by this 9-digit number. A missing or wrong FEIN stalls processing and any refund.
- The decedent’s date of death, Social Security number, and domicile. A decedent’s estate return needs all three near the top of the form. The domicile sets the county and the local tax rate.
- The subdivision code, county, and city/town. Maryland’s local tax is figured by county, so you need the correct code from the booklet’s List 6A. Guessing the code can apply the wrong local rate.
- Federal distributable net income (DNI) and the share retained. The Schedule A modification math uses DNI to split modifications between the fiduciary and the beneficiaries. Missing this figure stops you cold on Schedule A.
- Records of state and local interest, U.S. obligation interest, and income taxes deducted federally. These feed the addition and subtraction lines on Form 504 Schedule A. Skipping them understates or overstates Maryland income.
- Estimated tax payments, withholding, and extension payments already made. You credit these on Lines 29 and 30, and forgetting them means you pay twice.
- Schedule K-1 (504) details for each beneficiary. You report each beneficiary’s share so their own Maryland return matches. A mismatch can trigger notices for the beneficiaries.
Set aside an afternoon, not ten minutes. Even a simple estate touches the federal return, the will, bank statements, and the county code list, and chasing any one of these mid-form is where errors creep in.
Where to Get the Form and How to Access It
The official Form 504 lives on the Comptroller of Maryland’s website, and you should always pull the current year’s version so the rates and line numbers match. You can download the Tax Year 2025 Form 504 PDF directly, and the matching 2025 Fiduciary Booklet with line-by-line instructions sits right next to it. The revision stamp on the 2025 form reads COM/RAD-021, 09/25, printed at the bottom of each page so you can confirm you have the right version.
If you cannot print the form, you can request paper copies by emailing taxforms@marylandtaxes.gov or by calling the forms line at 410-260-7951. Many fiduciaries instead file electronically through approved tax software, because Maryland takes part in the Federal/State Modernized e-File program for fiduciary returns. For the list of approved vendors or e-file help, the Comptroller points filers to its e-File help resources and the e-File helpdesk at 410-260-7753.
A word on which version to grab: tax year 2025 changed the brackets, added a 2% extra tax on large net capital gains through new Form 504CG, and reduced itemized deductions for higher earners. If you reach for a 2023 or 2024 form, your tax math will be wrong even if every box looks the same. Always match the form year to the income year you are reporting.
If you complete a computer-generated substitute form, it must be approved in advance by the Revenue Administration Division. The fact that software is sold in stores does not mean Maryland has approved its forms, so check the approved-vendor list before you rely on a printout.
Step-by-Step: How to Fill Out Form 504 Line by Line
Work top to bottom and use blue or black ink only. Do not use pencil or red ink, do not write “none” or “zero” on blank lines, and do not staple, punch, or write on the barcode, because any of these can delay processing. You may round cents to the nearest dollar.
Header: Name, Address, FEIN, and Tax Year
The top block asks for the estate or trust name, the name and title of the fiduciary, the current mailing address, and the 9-digit Federal Employer Identification Number.
To answer it, enter the legal name of the estate or trust exactly as it appears on the federal Form 1041, then your name and title (such as Trustee or Personal Representative), then the mailing address, and finally the FEIN with no slashes or dashes. If you file for a fiscal year rather than a calendar year, write the beginning and ending dates in the spaces at the very top.
For example, Sandra Pratt, Personal Representative writes the estate name as Estate of Harold Pratt, her title as Personal Representative, and the estate’s FEIN as 87-1234567 entered as 871234567.
A common nuance is the address: if the fiduciary uses a P.O. Box instead of a street address, put the P.O. Box on the first address line, because the Comptroller mails notices and refunds to this exact address. A common mistake is entering the decedent’s old Social Security number in the FEIN field, which routes the return to the wrong record and stalls any refund. People also wrongly believe the trust can use the grantor’s personal SSN; most trusts and all estates need their own FEIN once they file Form 1041.
Type of Entity (Boxes 1–8)
This section asks you to check the box that matches the entity type on your federal return, choosing from decedent’s estate, simple trust, complex trust, grantor type trust, bankruptcy estate, qualified funeral trust, electing small business trust (ESBT), or other.
Answer it by checking the single box that mirrors your federal Form 1041 classification. Check Box 1 for a decedent’s estate, Box 2 for a simple trust that must distribute all income each year, Box 3 for a complex trust that keeps some income, and Box 4 for a grantor type trust.
For example, the Pratt Family Irrevocable Trust, which keeps part of its rental income, checks Box 3, Complex trust.
A key nuance is the grantor trust: income from a grantor trust is taxed to the grantor personally, not the trust, so a true grantor trust often reports little or no tax here. A common mistake is checking “simple trust” while still retaining income, which contradicts the very definition of a simple trust and invites a notice. Many filers wrongly think the entity box is cosmetic; it actually controls whether the trust has taxable income at all, since a simple trust by rule has none.
Decedent’s Estate Information
For an estate, this block asks for the date of death, the decedent’s Social Security number, the decedent’s state of domicile, and a checkbox marking the final return.
Enter the date of death in MM/DD/YYYY form, the decedent’s SSN, and the domicile state. Check the final return box only if this is the last return the estate will ever file, meaning all assets have been distributed.
For example, Sandra Pratt enters 03/09/2025 as the date of death, the decedent’s SSN, Maryland as the domicile, and leaves the final-return box unchecked because the estate is still open.
A nuance worth flagging: a fiscal-year estate enters its year beginning and ending dates at the top of the form rather than assuming a calendar year. A common mistake is checking “final return” too early, which signals the Comptroller to close the account while income is still coming in and forces a reopening. Filers often wrongly believe an estate must use a calendar year; estates may elect a fiscal year, which can spread income across tax years.
Resident Status and Subdivision Code
This section asks whether the fiduciary is a resident, and if so, the subdivision code, county, and city, town, or taxing area. A separate box marks a nonresident fiduciary.
Check the resident box if the decedent was domiciled in Maryland or the trust meets a residency test, then enter the four-digit subdivision code from List 6A in the booklet, the county, and the city or town. Check the nonresident box if neither applies, and remember to attach Form 504NR.
For example, a trust principally administered in Rockville enters subdivision code 1609 for the City of Rockville and Montgomery as the county.
A nuance: for a personal representative, the county is where the decedent was domiciled at death, not where you the executor live. A common mistake is entering the wrong subdivision code, which applies the wrong local tax rate and changes the bottom line, since counties like Anne Arundel and Frederick use tiered local rates for 2025. Filers often wrongly believe nonresidents skip Form 504; nonresidents still file Form 504 plus Form 504NR.
Line 1 – Federal Taxable Income of Fiduciary
Line 1 asks for the federal taxable income of the fiduciary, taken straight from Line 23 of federal Form 1041.
Copy the exact figure from Line 23 of your completed Form 1041 into Line 1. Do not recalculate it; Maryland law requires you to begin with the federal number.
For example, the Pratt Family Trust shows $42,000 of federal taxable income on Form 1041 Line 23, so $42,000 goes on Line 1.
A nuance: a fiduciary exempt under IRC Sections 408(e)(1) or 501 enters its unrelated business taxable income instead of ordinary federal taxable income. A common mistake is pulling the number from the wrong Form 1041 line, which throws off every line below it, since all of Form 504 builds on this figure. Filers often wrongly believe distributed income belongs here; it does not, because the federal return already removed distributions through the income distribution deduction.
Line 1a – Capital Gain or Loss
Line 1a asks for the capital gain or loss already included in the Line 1 federal taxable income figure.
Enter the net capital gain or loss reported on your federal return. A loss is shown as a negative amount.
For example, the trust reports a $3,000 net capital gain, so $3,000 goes on Line 1a.
A nuance: this figure matters in 2025 because filers with high federal adjusted gross income face the new 2% capital gains tax computed on Form 504CG. A common mistake is leaving Line 1a blank when capital gains exist, which can hide income subject to the added tax. Filers often wrongly think Line 1a adds tax by itself; it is informational and feeds later calculations rather than standing alone.
Lines 2 and 3 – Federal Exemption and ESBT Income
Line 2 asks for the exemption claimed on the federal return, and Line 3 asks for income from an Electing Small Business Trust (ESBT) that you must not prorate.
Enter the federal exemption amount from Form 1041 on Line 2. On Line 3, enter the S-portion of ESBT income taxed under IRC Section 641(c), and do not divide or prorate it.
For example, an estate that claimed a $600 federal exemption enters $600 on Line 2, and a trust with no ESBT income leaves Line 3 blank.
A nuance: ESBT income is an addition because Maryland taxes the S-corporation portion that federal rules carve out onto a separate schedule. A common mistake is prorating ESBT income on Line 3, which understates the addition and the tax. Filers often wrongly believe they can distribute the ESBT S-portion to beneficiaries; the rules forbid distributing that portion at all.
Line 4 – Federal Taxable Income Plus Nonallocable Additions
Line 4 asks for the sum of Lines 1, 2, and 3.
Add Line 1, Line 2, and Line 3 and write the total on Line 4. This is simple arithmetic, but it is the base the rest of the return modifies.
For example, with $42,000 on Line 1, $100 on Line 2, and $0 on Line 3, the trust enters $42,100 on Line 4.
A nuance: if Line 3 is blank because there is no ESBT, Line 4 is just Lines 1 plus 2. A common mistake is forgetting to add back the federal exemption from Line 2, which understates Maryland income. Filers often wrongly treat Line 4 as the final taxable amount; it is only the starting point before Maryland modifications.
Line 5 – Fiduciary’s Share of Maryland Modifications (from Schedule A)
Line 5 asks for the fiduciary’s share of Maryland modifications, a positive or negative number carried from Form 504 Schedule A, Line 8, 9d, or 10f.
Complete Form 504 Schedule A first, because this line depends on it. If the fiduciary keeps all the income, use Schedule A Line 8; if it distributes part, use the Formula Method (Line 9d) or the Alternative Method (Line 10f), but never both. Enter the result, with a minus sign if it is negative.
For example, the Pratt Family Trust has $1,200 of out-of-state municipal bond interest as an addition and retains all income, so it enters $1,200 on Schedule A Line 8 and carries $1,200 to Line 5.
A nuance: Method 1 prorates modifications using the fiduciary’s percentage of distributable net income, while Method 2 allocates them beneficiary by beneficiary. A common mistake is using both methods, which double-counts and overstates the modification. Filers often wrongly believe modifications are optional; additions like non-Maryland state bond interest are required by law.
Lines 6, 7, and 8 – Adjusted Gross Income Build
Line 6 asks for Line 4 plus or minus Line 5; Line 7 asks for the nonresident beneficiary deduction from Schedule A Line 13; and Line 8 asks for Maryland adjusted gross income, which is Line 6 minus Line 7.
Combine Line 4 and Line 5 onto Line 6, respecting the sign. Enter any nonresident beneficiary deduction on Line 7. Subtract Line 7 from Line 6 and place the result on Line 8.
For example, the trust adds $42,100 and $1,200 for $43,300 on Line 6, has no nonresident beneficiary deduction so enters nothing on Line 7, and carries $43,300 to Line 8.
A nuance: the Line 7 deduction applies only when intangible income is being accumulated for a nonresident beneficiary, and it requires Form 504NBD and a copy of the federal return attached. A common mistake is claiming the Line 7 deduction when income has already been distributed, which the rules prohibit. Filers often wrongly think any nonresident beneficiary qualifies; the deduction fails if even one remainderman is a Maryland resident.
Lines 9 and 10 – Maryland Exemption and Taxable Net Income
Line 9 asks for the Maryland exemption, and Line 10 asks for the fiduciary’s Maryland taxable net income, which is Line 8 minus Line 9.
Enter the Maryland exemption from Instruction 10 on Line 9, then subtract it from Line 8 and write the result on Line 10. This Line 10 figure is what the local tax later multiplies against.
For example, the trust enters its $200 Maryland exemption on Line 9 and carries $43,100 to Line 10.
A nuance: a nonresident fiduciary computes taxable net income through Form 504NR instead of stopping at Line 10. A common mistake is skipping the exemption entirely, which overstates taxable income and tax. Filers often wrongly assume the Maryland exemption equals the federal exemption; they are set separately.
Line 10a – Net Capital Gain Subject to Additional Tax
Line 10a asks for the net capital gain income subject to the new additional tax, taken from Line 9 of Form 504CG.
If federal adjusted gross income exceeds $350,000, complete Form 504CG, attach it, and enter the qualifying net capital gain on Line 10a. Otherwise leave it blank.
For example, a high-income estate with $80,000 of qualifying capital gain enters $80,000 on Line 10a and attaches Form 504CG.
A nuance: this 2% surtax is new for tax year 2025 and only hits filers above the income threshold. A common mistake is reporting all capital gains here rather than only the qualifying net amount from Form 504CG. Filers often wrongly believe every trust with capital gains owes the surtax; it applies only above the $350,000 federal AGI line.
Lines 11 through 14 – State Tax, Special Nonresident Tax, and Surtax
Line 11 asks for Maryland tax, Line 12 for special nonresident tax, Line 13 for the additional tax on net capital gain, and Line 14 for total Maryland tax.
Compute Line 11 using the rate schedule in the instructions, or enter Form 504NR Line 21 if you are a nonresident. Residents enter zero on Line 12; nonresidents copy Form 504NR Line 22. Multiply Line 10a by .02 for Line 13. Add Lines 11 through 13 for Line 14.
For example, the resident trust computes $2,750 of Maryland tax on Line 11, enters 0 on Line 12, 0 on Line 13, and $2,750 on Line 14.
A nuance: the special nonresident tax on Line 12 is how Maryland reaches nonresident fiduciaries with the extra 2.25% rate. A common mistake is a resident leaving Line 12 blank instead of entering zero, which the booklet treats differently than a true blank field on other lines. Filers often wrongly apply individual tax tables; fiduciaries use the dedicated fiduciary rate schedule.
Lines 15 through 18 – Credits and Tax After Credits
Lines 15 and 16 ask for credits, Line 17 for total credits, and Line 18 for Maryland tax after credits.
Enter the credit for fiduciary income tax paid to another state and conservation easement credits from Form 502CR on Line 15, and nonrefundable business credits from Form 504CR on Line 16. Add them on Line 17, then subtract Line 17 from Line 14 for Line 18, entering zero if the result is negative.
For example, the trust has no credits, so it enters 0 on Lines 15, 16, and 17 and carries $2,750 to Line 18.
A nuance: the credit for tax paid to another state stops Maryland from taxing the same income twice. A common mistake is claiming a credit without attaching Form 502CR or 504CR, which causes the credit to be denied. Filers often wrongly think a refundable credit goes here; refundable credits appear later, on Line 33.
Lines 19 through 22 – Local Tax
Line 19 asks for local tax (Line 10 times the county rate), Line 20 for the local credit for tax paid to another state, Line 21 for local tax after credit, and Line 22 for total Maryland and local tax.
Multiply Line 10 by your county’s local rate from Instruction 15 and enter it on Line 19; nonresidents enter zero. Enter any local out-of-state credit on Line 20, subtract for Line 21, then add Lines 18 and 21 for Line 22.
For example, a Montgomery County trust multiplies $43,100 by the county rate to get its Line 19 local tax, has no Line 20 credit, and adds the state and local amounts on Line 22.
A nuance: counties such as Anne Arundel and Frederick use tiered local rates for 2025, so high-income trusts there pay a higher marginal county rate. A common mistake is using a flat statewide guess instead of the correct county rate, which misstates the local tax. Filers often wrongly think nonresidents owe local tax; nonresident fiduciaries enter zero on Line 19.
Lines 23 through 28 – Contributions and Total
Lines 23 through 27 ask for voluntary contributions to five state funds, and Line 28 asks for the total of Lines 22 through 27.
Enter any voluntary donation to the Chesapeake Bay and Endangered Species Fund, Developmental Disabilities Fund, Maryland Cancer Fund, Fair Campaign Financing Fund, or Maryland Veterans Trust Fund on the matching line, then total everything on Line 28.
For example, the trust donates $25 to the Chesapeake Bay Fund on Line 23 and adds it into the $2,775-plus total on Line 28.
A nuance: these contributions are voluntary and increase what you owe or reduce a refund, dollar for dollar. A common mistake is entering a contribution by accident, which raises the balance due. Filers often wrongly believe these donations lower their tax; they are gifts on top of the tax, not deductions.
Lines 29 through 40 – Payments, Balance Due, and Refund
Lines 29 through 34 ask for payments and refundable credits, Line 35 for a balance due, Lines 36 through 38 for an overpayment and refund, Line 39 for interest charges, and Line 40 for the total amount due.
Enter Maryland withholding on Line 29, estimated and extension payments on Line 30, MW506NRS withholding on Line 31, pass-through entity tax on Line 32, and refundable credits on Line 33, then total on Line 34. If Line 28 is more than Line 34, the difference is the balance due on Line 35; if less, the overpayment goes on Line 36. Add any Form 504UP or late interest on Line 39, and report the total due on Line 40.
For example, the trust paid $2,000 in estimated tax on Line 30, owes $2,775 on Line 28, and enters a $775 balance due on Line 35 and on Line 40.
A nuance: a refund can be direct-deposited by completing the account fields in Line 41, but check the box if the account is outside the United States. A common mistake is forgetting estimated payments on Line 30, which makes you overpay. Filers often wrongly believe interest only applies to late filing; interest also accrues on any tax not paid by the due date even with an extension to file.
Signature, Code Numbers, and Preparer Section
The final block asks for code numbers, the fiduciary’s signature and date, the daytime phone number, and the preparer’s signature and PTIN if someone else prepared the return.
Sign and date as the fiduciary under penalty of perjury, enter the three-digit code numbers where required, and have any paid preparer sign and enter their PTIN. Check the box if you authorize the Comptroller to discuss the return with your preparer.
For example, Sandra Pratt signs as Personal Representative, dates the return, and leaves the preparer block blank because she filed it herself.
A nuance: an unsigned return is treated as not filed, which can trigger late penalties even though you mailed it on time. A common mistake is a preparer omitting the required PTIN, which is mandated by law. Filers often wrongly think an electronic filing skips the signature; e-filed returns still require a valid signature method.
Three Filled-Out Examples Using Real Scenarios
Example 1: Sandra Pratt, Personal Representative of a Resident Estate
Sandra’s father Harold died in Baltimore County, and his estate earned interest and rent during administration. She files a resident decedent’s estate return.
| Form Section | What Sandra Enters |
|---|---|
| Type of entity | Box 1, Decedent’s estate |
| Decedent’s estate information | Date of death 03/09/2025, domicile Maryland, final return unchecked |
| Resident status | Resident box checked, county Baltimore County, subdivision code 0300 |
| Line 1 – Federal taxable income | $28,000 from Form 1041 Line 23 |
| Line 2 – Federal exemption | $600 |
| Line 4 – Sum of Lines 1–3 | $28,600 |
| Line 5 – Maryland modifications | $0 (no modifications) |
| Line 10 – Maryland taxable net income | $28,400 after the Maryland exemption |
| Line 14 – Total Maryland tax | computed from the fiduciary rate schedule |
| Line 40 – Total amount due | balance after estimated payments on Line 30 |
Example 2: The Pratt Family Trust, a Resident Complex Trust
The trust is administered in Rockville, keeps part of its rental income, and holds out-of-state municipal bonds. It files as a resident complex trust.
| Form Section | What the Trustee Enters |
|---|---|
| Type of entity | Box 3, Complex trust |
| Resident status | Resident box checked, county Montgomery, subdivision code 1609 (Rockville) |
| Line 1 – Federal taxable income | $42,000 |
| Line 2 – Federal exemption | $100 |
| Line 4 – Sum of Lines 1–3 | $42,100 |
| Schedule A Line 8 / Line 5 | $1,200 addition for non-Maryland bond interest |
| Line 6 – Line 4 plus Line 5 | $43,300 |
| Line 10 – Maryland taxable net income | $43,100 after the Maryland exemption |
| Line 19 – Local tax | $43,100 times the Montgomery County rate |
| Line 35 – Balance due | $775 after a $2,000 estimated payment |
Example 3: The Coastal Holdings Trust, a Nonresident Trust
This trust is administered in Virginia but owns rental property in Ocean City, Maryland. It files Form 504 plus Form 504NR because only its Maryland-source income is taxed.
| Form Section | What the Trustee Enters |
|---|---|
| Type of entity | Box 3, Complex trust |
| Resident status | Nonresident box checked, See Form 504NR |
| Line 1 – Federal taxable income | $60,000 from Form 1041 Line 23 |
| Schedule A modifications | Maryland rental income retained, non-Maryland loss added back |
| Line 11 – Maryland tax | carried from Form 504NR Line 21 |
| Line 12 – Special nonresident tax | from Form 504NR Line 22 (2.25% rate) |
| Line 19 – Local tax | zero (nonresidents enter zero) |
| Line 29–30 – Payments | withholding and estimated payments made |
| Attachment | Form 504NR attached to Form 504 |
| Line 40 – Total amount due | balance after credits and payments |
How to File the Completed Form
Maryland gives fiduciaries two main channels: mail and electronic filing. There is no separate filing fee for Form 504 itself; you only pay the tax you owe.
To file by mail, send the original signed form (not a photocopy) with any payment to the Comptroller of Maryland, Revenue Administration Division, 110 Carroll Street, Annapolis, MD 21411-0001. Make a check or money order payable to Comptroller of Maryland, and write the FEIN, tax year, and tax type on it in blue or black ink so the payment posts correctly. Mailed paper returns generally take longer to process than e-filed ones, and you should keep a copy plus your certified-mail receipt as proof of filing.
To file electronically, use approved tax software through Maryland’s participation in the Federal/State Modernized e-File program, which the Comptroller describes in its fiduciary e-file information. E-filing speeds processing and refunds, and you can pay any balance electronically or request direct deposit by completing the Line 41 bank fields. Keep the software’s electronic acknowledgment as your proof of filing, and reach the e-File helpdesk at 410-260-7753 if a return is rejected.
Either way, nonresident fiduciaries must include Form 504NR with the return, and anyone claiming credits must attach the supporting form, such as Form 502CR or 504CR. Missing attachments are a leading cause of delayed processing.
What Happens After You File
Once the Comptroller receives Form 504, the Revenue Administration Division processes the return, matches it to the FEIN, and verifies the figures against the attached federal return and schedules. Everything on the return is subject to verification, audit, and revision, so keep your records for several years in case of a question.
If you overpaid, the Comptroller issues a refund, either by check to the mailing address or by direct deposit if you completed Line 41. E-filed returns with direct deposit are the fastest path to a refund, while mailed paper returns take longer because they are keyed by hand.
If you owe and did not pay in full, interest runs on the unpaid tax from the due date, and penalties can apply for late filing or late payment. The booklet warns that there are severe penalties for failing to file, failing to pay, or filing a false return, including fines, possible imprisonment, and a penalty added to the tax, and the Comptroller can place liens on a delinquent taxpayer’s property. If you discover an error after filing, you file an amended Form 504 by checking the amended-return box, drawing a line through the barcodes, and attaching the amended federal Form 1041 if the federal return also changed.
Mistakes to Avoid When Filling Out the Form
- Starting Form 504 before the federal Form 1041 is done. Line 1 needs the federal Line 23 figure, so an unfinished federal return forces a redo.
- Using the wrong tax year’s form. A prior-year form applies outdated brackets and the wrong capital gains rules, producing an incorrect tax.
- Entering the wrong subdivision code. The local tax is figured by county, so a bad code applies the wrong local rate and misstates the bottom line.
- Checking “simple trust” while retaining income. A simple trust by definition distributes all income, so this contradiction triggers a notice.
- Checking the final-return box too early. This closes the estate’s account while income is still arriving and forces a reopening.
- Putting the decedent’s SSN in the FEIN field. The misrouted return stalls processing and any refund.
- Using both Schedule A modification methods. Method 1 and Method 2 cannot both apply, and using both double-counts modifications.
- Forgetting estimated payments on Line 30. Omitting prior payments makes you overpay the balance due.
- Claiming a credit without attaching the supporting form. A credit on Line 15 or 16 without Form 502CR or 504CR is denied.
- Filing without a signature. An unsigned return is treated as never filed, which can trigger late penalties.
- Writing on or stapling through the barcode. This damages machine processing and delays the return.
- Using pencil or red ink. The Comptroller requires blue or black ink, and other inks can delay or reject the return.
Do’s and Don’ts
Do:
- Do finish the federal Form 1041 first, because every Maryland figure flows from it.
- Do confirm the revision stamp reads COM/RAD-021, 09/25 so you have the 2025 form.
- Do complete Schedule A before Line 5, since the modification figure feeds page 1.
- Do look up the exact subdivision code in List 6A to get the local rate right.
- Do attach Form 504NR for any nonresident fiduciary, as it is required.
- Do keep proof of filing, such as a certified-mail receipt or e-file acknowledgment.
Don’t:
- Don’t guess the county rate, because tiered counties like Anne Arundel change the math.
- Don’t prorate ESBT income on Line 3, since the instructions forbid it.
- Don’t claim the nonresident beneficiary deduction on distributed income, which is not allowed.
- Don’t write “none” or “zero” on blank lines, as it can delay processing.
- Don’t mail a photocopy, because the Comptroller wants the original signed form.
- Don’t forget the FEIN, tax year, and tax type on your check, or the payment may not post.
Pros and Cons of Filing on Your Own vs. With Help
| Filing on Your Own | Filing With a Professional |
|---|---|
| Saves preparer fees, which matters for a small estate | Costs money, but often less than the penalties from an error |
| You learn the estate’s finances firsthand | A CPA or attorney spots modifications and credits you might miss |
| Fine for a simple resident estate with little income | Strongly advised for nonresident trusts that need Form 504NR |
| You control the timeline and filing date | The pro manages deadlines, extensions, and estimated payments |
| Works well when there are no beneficiaries to allocate to | Essential when K-1 (504) allocations get complex |
| Full transparency into every number | The preparer signs with a PTIN and shares responsibility for accuracy |
FAQs
Do I have to file Form 504 if the trust gave away all its income this year?
Yes. A trust that is a member of a pass-through entity with nonresident tax paid on its behalf must file even with no retained income, though a simple trust that distributes everything usually owes no tax.
Do nonresident fiduciaries use a different form than residents?
No. Both use Form 504, but nonresidents must also attach Form 504NR to calculate tax on Maryland-source income only.
Do I enter the decedent’s Social Security number in the FEIN box?
No. The FEIN box needs the estate or trust’s 9-digit Federal Employer Identification Number; the decedent’s SSN goes only in the decedent’s estate information section.
Do I check the “final return” box on the first return?
No. Check it only on the very last return, after all assets are distributed, or you risk closing the account while income is still arriving.
Do I put the executor’s home county in the resident status section?
No. For an estate, you enter the county where the decedent was domiciled at death, not where the personal representative lives.
Do I copy federal taxable income exactly onto Line 1?
Yes. Maryland law requires you to start with the figure from Line 23 of federal Form 1041 without recalculating it.
Do I have to complete Schedule A before page 1?
Yes. Schedule A produces the modification figure for Line 5, so you finish it first or the page 1 math will be wrong.
Do residents enter anything on Line 12, the special nonresident tax?
No. Residents enter zero on Line 12, while nonresidents carry the amount from Form 504NR Line 22.
Do voluntary contributions on Lines 23 to 27 lower my tax?
No. They are donations added on top of the tax, so they increase the balance due or reduce a refund.
Do I owe the new 2% capital gains tax on every trust gain?
No. The added 2% tax applies only when federal adjusted gross income exceeds $350,000, and it is figured on Form 504CG.
Do I get more time to pay if I file Form 504E for an extension?
No. Form 504E extends only the time to file, not the time to pay, so interest still runs on tax not paid by the due date.
Do I have to sign the return if a preparer completed it?
Yes. The fiduciary must sign under penalty of perjury, and the paid preparer must also sign and enter a PTIN, or the return is treated as incomplete.
Do I write my modifications using both Schedule A methods to be safe?
No. You choose either the Formula Method or the Alternative Method, never both, because using both double-counts the modifications.
Related reading
- How to Fill Out Maryland Form 502 (w/Examples) + FAQs
- How to Fill Out Maryland Form 502SU (w/Examples) + FAQs
- How to Fill Out Maryland Form 504NR (w/Examples) + FAQs
- How to Fill Out Maryland Form 505 (w/Examples) + FAQs
- How to Fill Out Maryland Form 510 (w/Examples) + FAQs
- How to Fill Out Maryland Form MET-3 (w/Examples) + FAQs