Maryland 2024 Regular Session

Maryland House Bill HB674 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	hb0674
6	6
7	7	HOUSE BILL 674
8	8	Q3 4lr0627
9	9	HB 125/23 – W&M
10	10	By: Delegates Grammer, Arikan, Chisholm, Fisher, Kipke, M. Morgan, Nawrocki,
11	11	and Szeliga
12	12	Introduced and read first time: January 25, 2024
13	13	Assigned to: Ways and Means
14	14
15	15	A BILL ENTITLED
16	16
17	17	AN ACT concerning 1
18	18
19	19	Income Tax – Subtraction Modification – Retirement Income 2
20	20
21	21	FOR the purpose of including income from certain retirement plans within a certain 3
22	22	subtraction modification allowed under the Maryland income tax for certain 4
23	23	individuals who are at least a certain age or who are disabled or whose spouse is 5
24	24	disabled; altering the maximum amount of the subtraction modification for certain 6
25	25	taxable years; repealing a limitation on the maximum amount of the subtraction 7
26	26	modification; providing that income included in certain subtraction modifications 8
27	27	may not be taken into account for purposes of the subtraction modification for 9
28	28	retirement income; and generally relating to a subtraction modification under the 10
29	29	Maryland income tax for retirement income. 11
30	30
31	31	BY repealing and reenacting, with amendments, 12
32	32	Article – Tax – General 13
33	33	Section 10–209 14
34	34	Annotated Code of Maryland 15
35	35	(2022 Replacement Volume and 2023 Supplement) 16
36	36
37	37	SECTION 1. BE IT ENACTED BY THE GENERAL ASSEMBLY OF MARYLAND, 17
38	38	That the Laws of Maryland read as follows: 18
39	39
40	40	Article – Tax – General 19
41	41
42	42	10–209. 20
43	43
44	44	(a) In this section: 21
45	45
46	46	(1) [“employee retirement system” means a plan: 22
47	47	2 HOUSE BILL 674
48	48
49	49
50	50	(i) established and maintained by an employer for the benefit of its 1
51	51	employees; and 2
52	52
53	53	(ii) qualified under § 401(a), § 403, or § 457(b) of the Internal 3
54	54	Revenue Code; and 4
55	55
56	56	(2) “employee retirement system” does not include: 5
57	57
58	58	(i) an individual retirement account or annuity under § 408 of the 6
59	59	Internal Revenue Code; 7
60	60
61	61	(ii) a Roth individual retirement account under § 408A of the 8
62	62	Internal Revenue Code; 9
63	63
64	64	(iii) a rollover individual retirement account; 10
65	65
66	66	(iv) a simplified employee pension under Internal Revenue Code § 11
67	67	408(k); or 12
68	68
69	69	(v) an ineligible deferred compensation plan under § 457(f) of the 13
70	70	Internal Revenue Code.] “QUALIFIED RETIREMENT PLAN” MEANS: 14
71	71
72	72	(I) A RETIREMENT PLAN QU ALIFIED UNDER § 401(A), § 403, OR 15
73	73	§ 457(B) OF THE INTERNAL REVENUE CODE; 16
74	74
75	75	(II) AN INDIVIDUAL RETIRE MENT ACCOUNT OR ANNU ITY UNDER 17
76	76	§ 408 OF THE INTERNAL REVENUE CODE; 18
77	77
78	78	(III) A ROTH INDIVIDUAL RETIR EMENT ACCOUNT UNDER § 408A 19
79	79	OF THE INTERNAL REVENUE CODE; 20
80	80
81	81	(IV) A ROLLOVER INDIVIDUA L RETIREMENT ACCOUNT ; OR 21
82	82
83	83	(V) A SIMPLIFIED EMPLOYE E PENSION UNDER § 408(K) OF THE 22
84	84	INTERNAL REVENUE CODE; AND 23
85	85
86	86	(2) “QUALIFIED RETIREMENT PLAN” DOES NOT INCLUDE AN 24
87	87	INELIGIBLE DEFERRED COMPENSATION PLAN UN DER § 457(F) OF THE INTERNAL 25
88	88	REVENUE CODE. 26
89	89
90	90	(b) Subject to subsections (C) AND (d) [and (e)] of this section, to determine 27
91	91	Maryland adjusted gross income, if, on the last day of the taxable year, a resident is at least 28
92	92	65 years old or is totally disabled or the resident’s spouse is totally disabled, or the resident 29
93	93	is 55 years old and is a retired forest ranger, park ranger, or wildlife ranger of the United 30 HOUSE BILL 674 3
94	94
95	95
96	96	States, the State, or a political subdivision of the State, an amount is subtracted from 1
97	97	federal adjusted gross income equal to [the lesser of]: 2
98	98
99	99	(1) [the cumulative or total annuity, pension, or endowment income from 3
100	100	an employee retirement system] 30% OF THE TOTAL INCOME FROM A QUALIFIED 4
101	101	RETIREMENT PLAN included in federal adjusted gross income FOR A TAXABLE YEAR 5
102	102	BEGINNING AFT ER DECEMBER 31, 2023, BUT BEFORE JANUARY 1, 2025; [or] 6
103	103
104	104	[(2) the maximum annual benefit under the Social Security Act computed 7
105	105	under subsection (c) of this section, less any payment received as old age, survivors, or 8
106	106	disability benefits under the Social Security Act, the Railroad Retirement Act, or both.] 9
107	107
108	108	(2) 60% OF THE TOTAL INCOME FROM A QUALIFIED RET IREMENT 10
109	109	PLAN INCLUDED IN FED ERAL ADJUSTED GROSS INCOME FOR A TAXABLE YEAR 11
110	110	BEGINNING AFTER DECEMBER 31, 2024, BUT BEFORE JANUARY 1, 2026; AND 12
111	111
112	112	(3) 100% OF THE TOTAL INCOME FROM A QUALIFIED RET IREMENT 13
113	113	PLAN INCLUDED IN FED ERAL ADJUSTED GROSS INCOME FOR A TAXABLE YEAR 14
114	114	BEGINNING AFTER DECEMBER 31, 2025. 15
115	115
116	116	[(c) For purposes of subsection (b)(2) of this section, the Comptroller: 16
117	117
118	118	(1) shall determine the maximum annual benefit under the Social Security 17
119	119	Act allowed for an individual who retired at age 65 for the prior calendar year; and 18
120	120
121	121	(2) may allow the subtraction to the nearest $100. 19
122	122
123	123	(d) (1) Military retirement income that is included in the subtraction under § 20
124	124	10–207(q) of this subtitle may not be taken into account for purposes of the subtraction 21
125	125	under this section. 22
126	126
127	127	(2) Public safety employee retirement income that is included in the 23
128	128	subtraction under § 10–207(mm) of this subtitle may not be taken into account for purposes 24
129	129	of the subtraction under this section.] 25
130	130
131	131	(C) ANY INCOME THAT IS IN CLUDED IN THE SUBTRA CTIONS UNDER § 26
132	132	10–207 OF THIS SUBTITLE MAY NOT BE TAKEN INTO AC COUNT FOR THE PURPOS ES 27
133	133	OF THE SUBTRACTION U NDER THIS SECTION . 28
134	134
135	135	[(e)] (D) In the case of a retired forest ranger, park ranger, or wildlife ranger of 29
136	136	the United States, the State, or a political subdivision of the State, the amount included 30
137	137	under subsection [(b)(1)] (B) of this section is limited to the first $15,000 of retirement 31
138	138	income that is attributable to the resident’s employment as a forest ranger, park ranger, or 32
139	139	wildlife ranger of the United States, the State, or a political subdivision of the State unless: 33
140	140	4 HOUSE BILL 674
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143	143	(1) the resident is at least 65 years old or is totally disabled; or 1
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145	145	(2) the resident’s spouse is totally disabled. 2
146	146
147	147	SECTION 2. AND BE IT FURTHER ENACTED, That this Act shall take effect July 3
148	148	1, 2024, and shall be applicable to all taxable years beginning after December 31, 2023. 4
149	149