Income Tax Modification Program

Income Tax Modification Program

Purpose: Provide financial incentive for forest landowners to manage their forest land by allowing them to deduct double the cost of reforestation and timber stand improvement from their federal adjusted gross income for Maryland income tax purposes.

Scope: Participants must own or lease between 3 to 1,000 acres of forest land capable of growing more than 20 cubic feet of wood per acre per year, which is available for the primary purpose of growing and harvesting trees. Christmas tree and ornamental tree operations are not eligible. Only forest management practices installed on 3 to 1,000 acres may receive the tax modification in any one year.

Description: This program allows eligible participants to deduct double the cost of reforestation and timber stand improvement practices, less any cost-share assistance received through other programs (WIP, EQIP, etc.). This is reported on the Maryland tax return as a subtraction from the federal adjusted gross income. Practices receiving the modification must remain in effect for at least 15 years. Periodic inspections will occur. If they are not maintained, the tax savings must be repaid.

Annual Accomplishments: Approximately 30-50 landowners participate annually.

Income Tax Modification Regulations (COMAR 08.07.03.04)

Forms:
Guidelines for Income Tax Modification Program
Tax return form (DNR Form 393)
Instructions for completing DNR Form 393

Contact Person:
Your local Department of Natural Resources forester or Dan Rider

Maryland DNR Forest Service
580 Taylor Avenue
Annapolis, Maryland 21401
410-260-8583
E-mail: daniel.rider@maryland.gov