Maryland House Bill HB317

Maryland 2022 Regular Session

• Introduced: 1/19/22
• Refer: 1/19/22

Caption

Income Tax - Subtraction Modification - Military Retirement Income

Impact

The implementation of HB 317 would yield significant changes to the taxation of military retirement income in Maryland. The bill gradually increases the income that veterans can exclude from their taxable income over several years, eventually allowing for 100% of qualifying military retirement income to be exempt from state income taxes. This is significant, as it may encourage military personnel to remain in Maryland after retirement and maintain their economic contributions to the state.

Summary

House Bill 317 focuses on modifying the Maryland income tax laws specifically for military retirement income. This bill proposes a phased increase in the subtraction modification that allows veterans to subtract military retirement income from their taxable income. The aim is to alleviate the tax burden on individuals who receive income as a result of their military service, thereby providing financial relief through tax benefits tailored for veterans.

Contention

However, HB 317 has potential points of contention. Advocates argue that it is crucial to support veterans and recognize their service by providing them with tax relief. Critics may express concern regarding the potential loss of tax revenue for the state and whether such tax modifications could disadvantage other groups or necessary funding for public services. Additionally, there may be debates about equitable tax treatment among various retirement income sources and whether military income should receive preferential tax status compared to civilian retirement income.