You have a choice of five different filing categories. Four of these are defined as they are on the federal return: single, married filing jointly, married filing separately and qualifying widow(er) with a dependent child. The fifth category -- married filing combined-separate returns -- is provided for a married couple who file a joint federal return but wish to file separate state returns.

You should use this last filing status only if husband and wife each had independent Maryland taxable income in 1985. If you meet this condition, figure your tax both ways -- joint and combined separate -- to see which gives you the lower total tax.

If you file combined-separate returns, use a single Form 502 and enter the husband's data in column A, the wife's in column B. All other filers use only column B on page 1, only column C on page 2. Exemptions

You are entitled to one Maryland exemption for each personal and dependent exemption claimed on your federal return. In addition, you get an extra exemption for each dependent who has reached age 65, unlike on the federal return, where the extra "age" exemption is limited to the filing taxpayer(s).

Each exemption claimed on a full-year Maryland return is worth $800, unchanged from last year. The pro-rata share on a part-year return works out to $66.67 per month per exemption. Income

The first step in determining the amount of income subject to Maryland tax is to transfer the figure for each of the various income categories from the federal return to the appropriate line in column C of Schedule A, on page 2 of the Maryland return.

If you are filing combined separate returns, allocate the appropriate part of each item of income to the husband (in column A) or the wife (column B). Half of the income from any asset registered in joint names is considered to belong to each spouse. Adjustments

Claim by a single lump-sum entry on line 41 the total of all adjustments taken on your federal return. Include the federal adjustment for a two-earner couple; it will be added back in the next section. If you're filing combined separate returns, be sure to divide the adjustments according to whether they belong to husband or wife. Additions

Several modifications of federal income are required to arrive at Maryland income. Additions to federal income are to be entered on Schedule C.

You must add to income the federal deduction for two-earner couples. Most couples with two incomes will file combined separate returns; add the federal allowance to the income of the lower-earning spouse (which is where it should have been deducted when dividing the adjustments).

Maryland does not allow the $100/$200 federal exclusion for dividend income, so the amount claimed on the federal return must be added back. You also must add any interest received in 1985 on any state or local obligations -- other than from Maryland -- that was not reported on your federal return. (Puerto Rico and Virgin Island bonds are exempt from tax by any state. In addition, Washington Metro and Washington Suburban Sanitary Commission bonds are not subject to Maryland income tax.)

If you filed Form 4972 (10-year averaging of a lump-sum distribution) with your federal return, for Maryland purposes you must add to federal income the ordinary income and 40 percent of the capital gains, minus the minimum distribution allowance, reported on that form.

These are the principal additions to federal income for the Maryland return. Other additions that apply to a relatively small number of taxpayers are listed on page 19 of the instruction booklet. Subtractions

Use Schedule D on page 2 to deduct items included on your federal return that are properly excludable from Maryland income.

First, deduct interest received during the year on U.S. government or government agency obligations. (Interest on GNMA and FNMA securities and income received from a mutual fund that invests in U.S. obligations are taxable on your Maryland return and may not be subtracted.)

Next, deduct any state tax refund reported as income on your federal return. Also exclude, to the extent it was included on your federal return, any capital gain realized on the sale of bonds issued by the state of Maryland or any of its local subdivisions.

Maryland allows the exclusion of up to $8,500 of pension income if you were 65 or older or totally disabled on Dec. 31, 1985 -- but reduced by Social Security or Railroad Retirement Act benefits received. Compute this exclusion -- separately for husband and wife if both qualify -- on the worksheet at the bottom of page 2 of Form 502.

If you included any federally taxable Social Security or Railroad Retirement benefits on line 38 of Schedule A, you should now remove it from Maryland taxable income by entering the same amount as a subtraction on line 56 of Schedule D.

The Maryland tax benefit for child and dependent care is taken as a subtraction from income rather than as a tax credit. Get the information from your federal Form 2441 or from Schedule 1 of federal Form 1040A -- but carry over to the Maryland form the amount of qualifying expenses on which the federal credit was based, not the amount of the credit itself. Attach a copy of Form 2441 or Schedule 1 to your Maryland return.

You may subtract unreimbursed vehicle-travel expenses at the rate of 21 cents a mile for the use of your car in volunteer work for certain charitable purposes (specified on page 19 of the instructions). Attach Form 502V to show your calculations.

The employer of a blind person may subtract the expense (up to a $1,000 ceiling) of obtaining a reader for the employe's use on the job. New this year: Any blind individual may deduct up to $5,000 for the expense of acquiring a reader either for personal use or use on the job.

One-half of your political and newsletter contributions may be subtracted up to a maximum of $100 on a joint return, $50 per taxpayer on all others. You also may be authorized to claim some of the expense of preserving and rehabilitating historic structures; qualifications and instructions are provided on Maryland Form 502H.

If you're a former police officer or firefighter, you may subtract pension payments received for injury or disability incurred while working in that capacity, but only to the extent the payments are included in income.

Members of state, county or local police or fire departments may subtract any amount included in federal income for personal use of vehicles provided by the employer. Deductions

The standard deduction is equal to 13 percent of Maryland adjusted gross income (line 5 of Form 502) up to a ceiling of $1,500 per taxpayer ($3,000 on a joint return). On a combined separate return, the standard deduction must be figured on the income of each spouse independently.

You may itemize deductions, on Maryland Form 502A, even if you used the zero bracket amount on your federal return; but then total itemized deductions for Maryland may not exceed the federal ZBA for your filing category.

If you itemized on the federal return, then, of course, the ZBA ceiling doesn't apply. You may claim the same deductions for Maryland as you claimed on the federal return, transferring the line items in each category from federal Schedule A to the corresponding lines on Maryland Form 502A. (The line for state and local income tax has been blocked out on the 502A because this is not an authorized state deduction.)

In addition to the deductions authorized on the federal return, in Maryland a qualifying artist may add a deduction for the value of his or her artworks donated to certain Maryland museums.

If you are filing a part-year return, subtract any deductions claimed on the federal return that apply to the period you were not a Maryland resident. Tax Computation

You may find your tax on the tax tables in the instruction booklet if your Maryland adjusted gross income after additions and subtractions was $50,000 or less, you're filing a full-year resident return and you don't itemize deductions. (In previous years, only those with adjusted gross incomes of $20,000 or less could use the table.)

The tables have built-in allowances for the standard deduction and for personal and dependent exemptions, so do not subtract either of these amounts from income before going to the tables. Use the income figure on line 5 of Form 502 or line 1 of Form 503 when referring to the tax tables.

If you are not eligible to use the tables, compute your tax on one of the worksheets on pages 21-22 of the instruction booklet, using the tax rate schedule on page 17. You must go this route if you have itemized deductions.

After finding the Maryland state tax from either the tables or the worksheet, you must then add the local "piggyback" assessment to determine your total tax liability. The local rate is 50 percent of the state tax for every county (and Baltimore City) except for the following: Calvert County, 20 percent; Queen Anne's, 45 percent; Talbot, 35 percent; and Worcester, 20 percent.

After computing your total tax liability, you then enter the amount of Maryland tax withheld and payments made on 1985 estimated tax during the year.

If you paid income tax to another state on Maryland income, you may be eligible to claim a credit against your Maryland tax; see Form 502CR for instructions. If you conduct a trade or business in Maryland, you may qualify for an enterprise zone tax credit, claimed on Form 502Z. Property Tax Credit

Maryland does not offer a property tax credit through the income tax system. But for your convenience, an application for the Maryland homeowner's property tax credit (Form HTC-60) is included in the tax package mailed to you.

Do not attach Form HTC-60 to your income tax return, and do not forward it in the same envelope with the tax return. Two envelopes are inserted in the instruction booklet: gray (addressed to the Comptroller of the Treasury) for mailing your income tax return, and blue (to the Homeowners' Tax Credit Program) for Form HTC-60 to claim the homeowner's tax credit.