Maryland 2022 Regular Session

Maryland Senate Bill SB404 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	sb0404
6	6
7	7	SENATE BILL 404
8	8	Q3 2lr0145
9	9	CF HB 422
10	10	By: The President (By Request – Administration) and Senators Bailey, Carozza,
11	11	Cassilly, Eckardt, Edwards, Gallion, Hershey, Jennings, Ready, Salling,
12	12	Simonaire, and West
13	13	Introduced and read first time: January 24, 2022
14	14	Assigned to: Budget and Taxation
15	15
16	16	A BILL ENTITLED
17	17
18	18	AN ACT concerning 1
19	19
20	20	Working Marylanders Tax Relief Act of 2022 2
21	21
22	22	FOR the purpose of altering, beginning with a certain taxable year, the percentage of the 3
23	23	federal earned income tax credit used for determining the amount that an individual 4
24	24	may claim as a refund under the Maryland earned income tax credit under certain 5
25	25	circumstances; and generally relating to the Maryland earned income tax credit. 6
26	26
27	27	BY repealing and reenacting, with amendments, 7
28	28	Article – Tax – General 8
29	29	Section 10–704 9
30	30	Annotated Code of Maryland 10
31	31	(2016 Replacement Volume and 2021 Supplement) 11
32	32
33	33	SECTION 1. BE IT ENACTED BY THE GENERAL ASSEMBLY OF MARYLAND, 12
34	34	That the Laws of Maryland read as follows: 13
35	35
36	36	Article – Tax – General 14
37	37
38	38	10–704. 15
39	39
40	40	(a) In this section, “taxpayer” means: 16
41	41
42	42	(1) an individual filing an income tax return; or 17
43	43
44	44	(2) a married couple filing a joint income tax return. 18
45	45
46	46	(b) (1) A resident who is a taxpayer may claim a credit against the State 19
47	47	income tax for a taxable year in the amount determined under subsection (c) of this section 20
48	48	for earned income. 21 2 SENATE BILL 404
49	49
50	50
51	51
52	52	(2) A resident who is a taxpayer may claim a credit against the county 1
53	53	income tax for a taxable year in the amount determined under subsection (d) of this section 2
54	54	for earned income. 3
55	55
56	56	(c) (1) Except as provided in paragraphs (2) and (3) of this subsection and 4
57	57	subject to subsection (e) of this section, the credit allowed against the State income tax 5
58	58	under subsection (b)(1) of this section is the lesser of: 6
59	59
60	60	(i) 50% of the earned income credit allowable for the taxable year 7
61	61	under § 32 of the Internal Revenue Code or that would have been allowable but for the 8
62	62	limitation under § 32(m) of the Internal Revenue Code; or 9
63	63
64	64	(ii) the State income tax for the taxable year. 10
65	65
66	66	(2) (i) Subject to subparagraph (iii) of this paragraph and subsection (e) 11
67	67	of this section, a resident may claim a refund in the amount, if any, by which the applicable 12
68	68	percentage specified in subparagraph (ii) of this paragraph of the earned income credit 13
69	69	allowable for the taxable year under § 32 of the Internal Revenue Code exceeds the State 14
70	70	income tax for the taxable year. 15
71	71
72	72	(ii) Subject to subparagraph (iii) of this paragraph, the applicable 16
73	73	percentage of the earned income credit allowable under § 32 of the Internal Revenue Code 17
74	74	to be used for purposes of determining the refund provided under this paragraph is: 18
75	75
76	76	1. 25% for a taxable year beginning after December 31, 2013, 19
77	77	but before January 1, 2015; 20
78	78
79	79	2. 25.5% for a taxable year beginning after December 31, 21
80	80	2014, but before January 1, 2016; 22
81	81
82	82	3. 26% for a taxable year beginning after December 31, 2015, 23
83	83	but before January 1, 2017; 24
84	84
85	85	4. 27% for a taxable year beginning after December 31, 2016, 25
86	86	but before January 1, 2018; 26
87	87
88	88	5. 28% for a taxable year beginning after December 31, 2017, 27
89	89	but before January 1, 2020; AND 28
90	90
91	91	6. 45% for a taxable year beginning after December 31, 29
92	92	2019[, but before January 1, 2023; and 30
93	93
94	94	7. 28% for a taxable year beginning after December 31, 31
95	95	2022]. 32
96	96	SENATE BILL 404 3
97	97
98	98
99	99	(iii) For purposes of determining the refund provided under this 1
100	100	paragraph, the earned income credit allowable under § 32 of the Internal Revenue Code is 2
101	101	calculated without regard to the limitation under § 32(m) of the Internal Revenue Code. 3
102	102
103	103	(3) (i) For purposes of this section for an individual without a qualifying 4
104	104	child, the credit allowable for a taxable year under § 32 of the Internal Revenue Code is 5
105	105	calculated without regard to: 6
106	106
107	107	1. the minimum age requirement under § 32(c)(1)(A)(ii)(II) of 7
108	108	the Internal Revenue Code; or 8
109	109
110	110	2. the limitation under § 32(m) of the Internal Revenue Code. 9
111	111
112	112	(ii) Subject to subparagraph (iii) of this paragraph, for a taxable year 10
113	113	beginning after December 31, 2019[, but before January 1, 2023], the credit allowed against 11
114	114	the State income tax under subsection (b)(1) of this section for an individual without a 12
115	115	qualifying child is equal to 100% of the earned income credit allowable for a taxable year 13
116	116	under § 32 of the Internal Revenue Code. 14
117	117
118	118	(iii) The tax credit allowed under this paragraph may not exceed $530 15
119	119	for a taxable year. 16
120	120
121	121	(iv) If the tax credit allowed under this paragraph in any taxable year 17
122	122	exceeds the total tax otherwise payable by the individual without a qualifying child for that 18
123	123	taxable year, the individual may claim a refund in the amount of the excess. 19
124	124
125	125	(d) (1) Except as provided in paragraph (2) of this subsection and subject to 20
126	126	subsection (e) of this section, the credit allowed against the county income tax under 21
127	127	subsection (b)(2) of this section is the lesser of: 22
128	128
129	129	(i) the earned income credit allowable for the taxable year under § 23
130	130	32 of the Internal Revenue Code or that would have been allowable but for the limitation 24
131	131	under § 32(m) of the Internal Revenue Code multiplied by 10 times the county income tax 25
132	132	rate for the taxable year; or 26
133	133
134	134	(ii) the county income tax for the taxable year. 27
135	135
136	136	(2) (i) A county may provide, by law, for a refundable county earned 28
137	137	income credit as provided in this paragraph. 29
138	138
139	139	(ii) If a county provides for a refundable county earned income credit 30
140	140	under this paragraph, on or before July 1 prior to the beginning of the first taxable year for 31
141	141	which it is applicable, the county shall give the Comptroller notice of the refundable county 32
142	142	earned income credit. 33
143	143
144	144	(iii) If a county provides for a refundable county earned income credit 34
145	145	under this paragraph, a resident may claim a refund of the amount, if any, by which the 35 4 SENATE BILL 404
146	146
147	147
148	148	product of multiplying the credit allowable for the taxable year under § 32 of the Internal 1
149	149	Revenue Code or that would have been allowable but for the limitation under § 32(m) of 2
150	150	the Internal Revenue Code by 5 times the county income tax rate for the taxable year 3
151	151	exceeds the county income tax for the taxable year. 4
152	152
153	153	(iv) The amount of any refunds payable under a refundable county 5
154	154	earned income credit operates to reduce the income tax revenue from individuals 6
155	155	attributable to the county income tax for that county. 7
156	156
157	157	(e) (1) Subject to paragraph (2) of this subsection, for an individual who is a 8
158	158	resident of the State for only a part of the year, the amount of the credit or refund allowed 9
159	159	under this section shall be determined based on the part of the earned income credit 10
160	160	allowable for the taxable year under § 32 of the Internal Revenue Code that is attributable 11
161	161	to Maryland, determined by multiplying the federal earned income credit by a fraction: 12
162	162
163	163	(i) the numerator of which is the Maryland adjusted gross income of 13
164	164	the individual; and 14
165	165
166	166	(ii) the denominator of which is the federal adjusted gross income of 15
167	167	the individual. 16
168	168
169	169	(2) For purposes of determining the amount of the credit or refund under 17
170	170	paragraph (1) of this subsection, the part of the earned income credit allowable for the 18
171	171	taxable year under § 32 of the Internal Revenue Code is calculated without regard to the 19
172	172	limitation under § 32(m) of the Internal Revenue Code. 20
173	173
174	174	SECTION 2. AND BE IT FURTHER ENACTED, That this Act shall take effect July 21
175	175	1, 2022. 22
176	176