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Maryland Tax Preparer Examination | Latest Verified
Questions and Detailed Answers
OVERVIEW DESCRIPTION:
This comprehensive collection of multiple-choice questions is designed for the Maryland
Tax Preparer Examination. The questions cover federal income tax fundamentals (e.g.,
filing status, dependents, deductions, self-employment tax), Maryland-specific rules (e.g.,
residency, Form 502 vs. 505, addition/subtraction modifications, the piggyback local tax,
refundable credits), preparer responsibilities (e.g., due diligence, record retention, signing
returns), ethics and penalties (e.g., unlawful disclosure, false return penalties), and key
administrative procedures (e.g., extensions, estimated payments, amended returns).
QUESTION 1
Who is required to register as a tax preparer in Maryland?
A. Any individual who prepares their own tax return
B. Any individual who prepares tax returns for compensation
C. Only Certified Public Accountants (CPAs)
D. Only attorneys who practice tax law
CORRECT ANSWER: B
EXPERT RATIONALE: Maryland law requires any individual who prepares or assists in
preparing a Maryland tax return for compensation to register with the State Board of
Individual Tax Preparers. Preparing one's own return or volunteering without payment
does not trigger this requirement.
QUESTION 2
What is the primary form used by full-year Maryland residents to file their state income
tax return?
A. Form 505
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B. Form 502
C. Form 515
D. Form 504
CORRECT ANSWER: B
EXPERT RATIONALE: Form 502 is the resident individual income tax return for Maryland.
Nonresidents use Form 505, while part-year residents use Form 505NR.
QUESTION 3
What is the general filing deadline for Maryland individual income tax returns for
calendar year taxpayers?
A. March 15th
B. April 15th
C. May 17th
D. October 15th
CORRECT ANSWER: B
EXPERT RATIONALE: Maryland conforms to the federal filing deadline, which is generally
April 15th. If this date falls on a weekend or holiday, the deadline moves to the next
business day.
QUESTION 4
A tax preparer in Maryland who willfully discloses a taxpayer's confidential information is
subject to what penalty?
A. A warning for a first offense
B. A fine of not less than $500 nor more than $10,000
C. Mandatory community service
D. Revocation of their driver's license
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CORRECT ANSWER: B
EXPERT RATIONALE: Under Maryland Tax-General Article §13-1019, unlawful disclosure
of tax information by a preparer is a misdemeanor conviction with fines ranging from
$500 to $10,000. This penalty underscores the importance of client confidentiality.
QUESTION 5
Which of the following types of income is generally taxable on a Maryland resident's
return?
A. Interest from Maryland municipal bonds
B. Child support received
C. Gifts received from a family member
D. Life insurance proceeds paid upon death
CORRECT ANSWER: A
EXPERT RATIONALE: Interest from Maryland municipal bonds is generally taxable for
Maryland income tax purposes. Child support, gifts, and life insurance proceeds are
typically not considered taxable income.
QUESTION 6
A nonresident who earned wages from a Maryland employer must file which tax form?
A. Form 502
B. Form 505
C. Form 502X
D. Form MW506
CORRECT ANSWER: B
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EXPERT RATIONALE: Nonresidents use Form 505 to report income sourced to Maryland.
Residents use Form 502, and the nonresident is only taxed on the income earned within
the state.
QUESTION 7
What is the minimum passing score required for the Maryland Tax Preparer
Examination?
A. 60%
B. 70%
C. 75%
D. 80%
CORRECT ANSWER: B
EXPERT RATIONALE: According to the Maryland Board of Individual Tax Preparers,
candidates must achieve a score of 70% or higher to pass the examination. The exam is
open-book and based on federal and Maryland instruction booklets.
QUESTION 8
A taxpayer may claim a qualifying person as a dependent only if that person meets all
the tests EXCEPT:
A. Relationship or member of household test
B. Citizenship or residency test
C. Gross income test (for qualifying child)
D. Joint return test
CORRECT ANSWER: C
Maryland Tax Preparer Examination | Latest Verified
Questions and Detailed Answers
OVERVIEW DESCRIPTION:
This comprehensive collection of multiple-choice questions is designed for the Maryland
Tax Preparer Examination. The questions cover federal income tax fundamentals (e.g.,
filing status, dependents, deductions, self-employment tax), Maryland-specific rules (e.g.,
residency, Form 502 vs. 505, addition/subtraction modifications, the piggyback local tax,
refundable credits), preparer responsibilities (e.g., due diligence, record retention, signing
returns), ethics and penalties (e.g., unlawful disclosure, false return penalties), and key
administrative procedures (e.g., extensions, estimated payments, amended returns).
QUESTION 1
Who is required to register as a tax preparer in Maryland?
A. Any individual who prepares their own tax return
B. Any individual who prepares tax returns for compensation
C. Only Certified Public Accountants (CPAs)
D. Only attorneys who practice tax law
CORRECT ANSWER: B
EXPERT RATIONALE: Maryland law requires any individual who prepares or assists in
preparing a Maryland tax return for compensation to register with the State Board of
Individual Tax Preparers. Preparing one's own return or volunteering without payment
does not trigger this requirement.
QUESTION 2
What is the primary form used by full-year Maryland residents to file their state income
tax return?
A. Form 505
,2|Page
B. Form 502
C. Form 515
D. Form 504
CORRECT ANSWER: B
EXPERT RATIONALE: Form 502 is the resident individual income tax return for Maryland.
Nonresidents use Form 505, while part-year residents use Form 505NR.
QUESTION 3
What is the general filing deadline for Maryland individual income tax returns for
calendar year taxpayers?
A. March 15th
B. April 15th
C. May 17th
D. October 15th
CORRECT ANSWER: B
EXPERT RATIONALE: Maryland conforms to the federal filing deadline, which is generally
April 15th. If this date falls on a weekend or holiday, the deadline moves to the next
business day.
QUESTION 4
A tax preparer in Maryland who willfully discloses a taxpayer's confidential information is
subject to what penalty?
A. A warning for a first offense
B. A fine of not less than $500 nor more than $10,000
C. Mandatory community service
D. Revocation of their driver's license
,3|Page
CORRECT ANSWER: B
EXPERT RATIONALE: Under Maryland Tax-General Article §13-1019, unlawful disclosure
of tax information by a preparer is a misdemeanor conviction with fines ranging from
$500 to $10,000. This penalty underscores the importance of client confidentiality.
QUESTION 5
Which of the following types of income is generally taxable on a Maryland resident's
return?
A. Interest from Maryland municipal bonds
B. Child support received
C. Gifts received from a family member
D. Life insurance proceeds paid upon death
CORRECT ANSWER: A
EXPERT RATIONALE: Interest from Maryland municipal bonds is generally taxable for
Maryland income tax purposes. Child support, gifts, and life insurance proceeds are
typically not considered taxable income.
QUESTION 6
A nonresident who earned wages from a Maryland employer must file which tax form?
A. Form 502
B. Form 505
C. Form 502X
D. Form MW506
CORRECT ANSWER: B
, 4|Page
EXPERT RATIONALE: Nonresidents use Form 505 to report income sourced to Maryland.
Residents use Form 502, and the nonresident is only taxed on the income earned within
the state.
QUESTION 7
What is the minimum passing score required for the Maryland Tax Preparer
Examination?
A. 60%
B. 70%
C. 75%
D. 80%
CORRECT ANSWER: B
EXPERT RATIONALE: According to the Maryland Board of Individual Tax Preparers,
candidates must achieve a score of 70% or higher to pass the examination. The exam is
open-book and based on federal and Maryland instruction booklets.
QUESTION 8
A taxpayer may claim a qualifying person as a dependent only if that person meets all
the tests EXCEPT:
A. Relationship or member of household test
B. Citizenship or residency test
C. Gross income test (for qualifying child)
D. Joint return test
CORRECT ANSWER: C
