Maryland 2022 Regular Session

Maryland House Bill HB422 Compare Versions

Only one version of the bill is available at this time.

Old	New	Differences
1	1
2	2
3	3	EXPLANATION: CAPITALS INDICATE MAT TER ADDED TO EXISTIN G LAW.
4	4	[Brackets] indicate matter deleted from existing law.
5	5	hb0422
6	6
7	7	HOUSE BILL 422
8	8	Q3 2lr0146
9	9	CF 2lr0145
10	10	By: The Speaker (By Request – Administration) and Delegates Anderton, Boteler,
11	11	Chisholm, Griffith, Hartman, Hornberger, Howard, Kipke, Kittleman,
12	12	Mautz, McComas, McKay, Metzgar, Morgan, Munoz, Novotny, Otto, Reilly,
13	13	Saab, Szeliga, Thiam, and Wivell
14	14	Introduced and read first time: January 19, 2022
15	15	Assigned to: Ways and Means
16	16
17	17	A BILL ENTITLED
18	18
19	19	AN ACT concerning 1
20	20
21	21	Working Marylanders Tax Relief Act of 2022 2
22	22
23	23	FOR the purpose of altering, beginning with a certain taxable year, the percentage of the 3
24	24	federal earned income tax credit used for determining the amount that an individual 4
25	25	may claim as a refund under the Maryland earned income tax credit under certain 5
26	26	circumstances; and generally relating to the Maryland earned income tax credit. 6
27	27
28	28	BY repealing and reenacting, with amendments, 7
29	29	Article – Tax – General 8
30	30	Section 10–704 9
31	31	Annotated Code of Maryland 10
32	32	(2016 Replacement Volume and 2021 Supplement) 11
33	33
34	34	SECTION 1. BE IT ENACTED BY THE GENERAL ASSEMBLY OF MARYLAND, 12
35	35	That the Laws of Maryland read as follows: 13
36	36
37	37	Article – Tax – General 14
38	38
39	39	10–704. 15
40	40
41	41	(a) In this section, “taxpayer” means: 16
42	42
43	43	(1) an individual filing an income tax return; or 17
44	44
45	45	(2) a married couple filing a joint income tax return. 18
46	46	2 HOUSE BILL 422
47	47
48	48
49	49	(b) (1) A resident who is a taxpayer may claim a credit against the State 1
50	50	income tax for a taxable year in the amount determined under subsection (c) of this section 2
51	51	for earned income. 3
52	52
53	53	(2) A resident who is a taxpayer may claim a credit against the county 4
54	54	income tax for a taxable year in the amount determined under subsection (d) of this section 5
55	55	for earned income. 6
56	56
57	57	(c) (1) Except as provided in paragraphs (2) and (3) of this subsection and 7
58	58	subject to subsection (e) of this section, the credit allowed against the State income tax 8
59	59	under subsection (b)(1) of this section is the lesser of: 9
60	60
61	61	(i) 50% of the earned income credit allowable for the taxable year 10
62	62	under § 32 of the Internal Revenue Code or that would have been allowable but for the 11
63	63	limitation under § 32(m) of the Internal Revenue Code; or 12
64	64
65	65	(ii) the State income tax for the taxable year. 13
66	66
67	67	(2) (i) Subject to subparagraph (iii) of this paragraph and subsection (e) 14
68	68	of this section, a resident may claim a refund in the amount, if any, by which the applicable 15
69	69	percentage specified in subparagraph (ii) of this paragraph of the earned income credit 16
70	70	allowable for the taxable year under § 32 of the Internal Revenue Code exceeds the State 17
71	71	income tax for the taxable year. 18
72	72
73	73	(ii) Subject to subparagraph (iii) of this paragraph, the applicable 19
74	74	percentage of the earned income credit allowable under § 32 of the Internal Revenue Code 20
75	75	to be used for purposes of determining the refund provided under this paragraph is: 21
76	76
77	77	1. 25% for a taxable year beginning after December 31, 2013, 22
78	78	but before January 1, 2015; 23
79	79
80	80	2. 25.5% for a taxable year beginning after December 31, 24
81	81	2014, but before January 1, 2016; 25
82	82
83	83	3. 26% for a taxable year beginning after December 31, 2015, 26
84	84	but before January 1, 2017; 27
85	85
86	86	4. 27% for a taxable year beginning after December 31, 2016, 28
87	87	but before January 1, 2018; 29
88	88
89	89	5. 28% for a taxable year beginning after December 31, 2017, 30
90	90	but before January 1, 2020; AND 31
91	91
92	92	6. 45% for a taxable year beginning after December 31, 32
93	93	2019[, but before January 1, 2023; and 33
94	94	HOUSE BILL 422 3
95	95
96	96
97	97	7. 28% for a taxable year beginning after December 31, 1
98	98	2022]. 2
99	99
100	100	(iii) For purposes of determining the refund provided under this 3
101	101	paragraph, the earned income credit allowable under § 32 of the Internal Revenue Code is 4
102	102	calculated without regard to the limitation under § 32(m) of the Internal Revenue Code. 5
103	103
104	104	(3) (i) For purposes of this section for an individual without a qualifying 6
105	105	child, the credit allowable for a taxable year under § 32 of the Internal Revenue Code is 7
106	106	calculated without regard to: 8
107	107
108	108	1. the minimum age requirement under § 32(c)(1)(A)(ii)(II) of 9
109	109	the Internal Revenue Code; or 10
110	110
111	111	2. the limitation under § 32(m) of the Internal Revenue Code. 11
112	112
113	113	(ii) Subject to subparagraph (iii) of this paragraph, for a taxable year 12
114	114	beginning after December 31, 2019[, but before January 1, 2023], the credit allowed against 13
115	115	the State income tax under subsection (b)(1) of this section for an individual without a 14
116	116	qualifying child is equal to 100% of the earned income credit allowable for a taxable year 15
117	117	under § 32 of the Internal Revenue Code. 16
118	118
119	119	(iii) The tax credit allowed under this paragraph may not exceed $530 17
120	120	for a taxable year. 18
121	121
122	122	(iv) If the tax credit allowed under this paragraph in any taxable year 19
123	123	exceeds the total tax otherwise payable by the individual without a qualifying child for that 20
124	124	taxable year, the individual may claim a refund in the amount of the excess. 21
125	125
126	126	(d) (1) Except as provided in paragraph (2) of this subsection and subject to 22
127	127	subsection (e) of this section, the credit allowed against the county income tax under 23
128	128	subsection (b)(2) of this section is the lesser of: 24
129	129
130	130	(i) the earned income credit allowable for the taxable year under § 25
131	131	32 of the Internal Revenue Code or that would have been allowable but for the limitation 26
132	132	under § 32(m) of the Internal Revenue Code multiplied by 10 times the county income tax 27
133	133	rate for the taxable year; or 28
134	134
135	135	(ii) the county income tax for the taxable year. 29
136	136
137	137	(2) (i) A county may provide, by law, for a refundable county earned 30
138	138	income credit as provided in this paragraph. 31
139	139
140	140	(ii) If a county provides for a refundable county earned income credit 32
141	141	under this paragraph, on or before July 1 prior to the beginning of the first taxable year for 33
142	142	which it is applicable, the county shall give the Comptroller notice of the refundable county 34
143	143	earned income credit. 35 4 HOUSE BILL 422
144	144
145	145
146	146
147	147	(iii) If a county provides for a refundable county earned income credit 1
148	148	under this paragraph, a resident may claim a refund of the amount, if any, by which the 2
149	149	product of multiplying the credit allowable for the taxable year under § 32 of the Internal 3
150	150	Revenue Code or that would have been allowable but for the limitation under § 32(m) of 4
151	151	the Internal Revenue Code by 5 times the county income tax rate for the taxable year 5
152	152	exceeds the county income tax for the taxable year. 6
153	153
154	154	(iv) The amount of any refunds payable under a refundable county 7
155	155	earned income credit operates to reduce the income tax revenue from individuals 8
156	156	attributable to the county income tax for that county. 9
157	157
158	158	(e) (1) Subject to paragraph (2) of this subsection, for an individual who is a 10
159	159	resident of the State for only a part of the year, the amount of the credit or refund allowed 11
160	160	under this section shall be determined based on the part of the earned income credit 12
161	161	allowable for the taxable year under § 32 of the Internal Revenue Code that is attributable 13
162	162	to Maryland, determined by multiplying the federal earned income credit by a fraction: 14
163	163
164	164	(i) the numerator of which is the Maryland adjusted gross income of 15
165	165	the individual; and 16
166	166
167	167	(ii) the denominator of which is the federal adjusted gross income of 17
168	168	the individual. 18
169	169
170	170	(2) For purposes of determining the amount of the credit or refund under 19
171	171	paragraph (1) of this subsection, the part of the earned income credit allowable for the 20
172	172	taxable year under § 32 of the Internal Revenue Code is calculated without regard to the 21
173	173	limitation under § 32(m) of the Internal Revenue Code. 22
174	174
175	175	SECTION 2. AND BE IT FURTHER ENACTED, That this Act shall take effect July 23
176	176	1, 2022. 24
177	177
178	178