Maryland 2025 Regular Session

Maryland House Bill HB355 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	hb0355
6	6
7	7	HOUSE BILL 355
8	8	Q3 5lr0737
9	9	HB 674/24 – W&M
10	10	By: Delegates Grammer, Arikan, Chisholm, Fisher, M. Morgan, Nawrocki, and
11	11	Szeliga
12	12	Introduced and read first time: January 16, 2025
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 2024 Supplement) 16
36	36	(As amended by Chapter 39 of the Acts of the General Assembly of 2022) 17
37	37
38	38	SECTION 1. BE IT ENACTED BY THE GENERAL ASSEMBLY OF MARYLAND, 18
39	39	That the Laws of Maryland read as follows: 19
40	40
41	41	Article – Tax – General 20
42	42
43	43	10–209. 21
44	44
45	45	(a) In this section: 22
46	46
47	47	(1) [“employee retirement system” means a plan: 23 2 HOUSE BILL 355
48	48
49	49
50	50
51	51	(i) established and maintained by an employer for the benefit of its 1
52	52	employees; and 2
53	53
54	54	(ii) qualified under § 401(a), § 403, or § 457(b) of the Internal 3
55	55	Revenue Code; and 4
56	56
57	57	(2) “employee retirement system” does not include: 5
58	58
59	59	(i) an individual retirement account or annuity under § 408 of the 6
60	60	Internal Revenue Code; 7
61	61
62	62	(ii) a Roth individual retirement account under § 408A of the 8
63	63	Internal Revenue Code; 9
64	64
65	65	(iii) a rollover individual retirement account; 10
66	66
67	67	(iv) a simplified employee pension under Internal Revenue Code § 11
68	68	408(k); or 12
69	69
70	70	(v) an ineligible deferred compensation plan under § 457(f) of the 13
71	71	Internal Revenue Code.] “QUALIFIED RETIREMENT PLAN” MEANS: 14
72	72
73	73	(I) A RETIREMENT PLAN QU ALIFIED UNDER § 401(A), § 403, OR 15
74	74	§ 457(B) OF THE INTERNAL REVENUE CODE; 16
75	75
76	76	(II) AN INDIVIDUAL RETIRE MENT ACCOUNT OR ANNU ITY UNDER 17
77	77	§ 408 OF THE INTERNAL REVENUE CODE; 18
78	78
79	79	(III) A ROTH INDIVIDUAL RETIREMENT ACCOU NT UNDER § 408A 19
80	80	OF THE INTERNAL REVENUE CODE; 20
81	81
82	82	(IV) A ROLLOVER INDIVIDUA L RETIREMENT ACCOUNT ; OR 21
83	83
84	84	(V) A SIMPLIFIED EMPLOYE E PENSION UNDER § 408(K) OF THE 22
85	85	INTERNAL REVENUE CODE; AND 23
86	86
87	87	(2) “QUALIFIED RETIREMENT PLAN” DOES NOT INCLU DE AN 24
88	88	INELIGIBLE DEFERRED COMPENSATION PLAN UN DER § 457(F) OF THE INTERNAL 25
89	89	REVENUE CODE. 26
90	90
91	91	(b) Subject to subsections (C) AND (d) [and (e)] of this section, to determine 27
92	92	Maryland adjusted gross income, if, on the last day of the taxable year, a resident is at least 28
93	93	65 years old or is totally disabled or the resident’s spouse is totally disabled, or the resident 29
94	94	is 55 years old and is a retired forest ranger, park ranger, or wildlife ranger of the United 30 HOUSE BILL 355 3
95	95
96	96
97	97	States, the State, or a political subdivision of the State, an amount is subtracted from 1
98	98	federal adjusted gross income equal to [the lesser of]: 2
99	99
100	100	(1) [the cumulative or total annuity, pension, or endowment income from 3
101	101	an employee retirement system] 30% OF THE TOTAL INCOME FROM A QUALIFIED 4
102	102	RETIREMENT PLAN included in federal adjusted gross income FOR A TAXABLE YEAR 5
103	103	BEGINNING AFTER DECEMBER 31, 2024, BUT BEFORE JANUARY 1, 2026; [or] 6
104	104
105	105	[(2) the maximum annual benefit under the Social Security Act computed 7
106	106	under subsection (c) of this section, less any payment received as old age, survivors, or 8
107	107	disability benefits under the Social Security Act, the Railroad Retirement Act, or both.] 9
108	108
109	109	(2) 60% OF THE TOTAL INCOME FROM A QUALIFIED RET IREMENT 10
110	110	PLAN INCLUDED IN FED ERAL ADJUSTED GROSS INCOME FOR A TAXABLE YEAR 11
111	111	BEGINNING AFTER DECEMBER 31, 2025, BUT BEFORE JANUARY 1, 2027; AND 12
112	112
113	113	(3) 100% OF THE TOTAL INCOME FROM A QUALIFIED RET IREMENT 13
114	114	PLAN INCLUDED IN FED ERAL ADJUSTED GROSS INCOME FOR A TAXABLE YEAR 14
115	115	BEGINNING AFTER DECEMBER 31, 2026. 15
116	116
117	117	[(c) For purposes of subsection (b)(2) of this section, the Comptroller: 16
118	118
119	119	(1) shall determine the maximum annual benefit under the Social Security 17
120	120	Act allowed for an individual who retired at age 65 for the prior calendar year; and 18
121	121
122	122	(2) may allow the subtraction to the nearest $100. 19
123	123
124	124	(d) (1) Military retirement income that is included in the subtraction under § 20
125	125	10–207(q) of this subtitle may not be taken into account for purposes of the subtraction 21
126	126	under this section. 22
127	127
128	128	(2) Public safety employee retirement income that is included in the 23
129	129	subtraction under § 10–207(mm) of this subtitle may not be taken into account for purposes 24
130	130	of the subtraction under this section.] 25
131	131
132	132	(C) ANY INCOME THAT IS IN CLUDED IN THE SUBTRA CTIONS UNDER § 26
133	133	10–207 OF THIS SUBTITLE MAY NOT BE TAKEN INTO AC COUNT FOR THE PURPOSES 27
134	134	OF THE SUBTRACTION U NDER THIS SECTION . 28
135	135
136	136	[(e)] (D) In the case of a retired forest ranger, park ranger, or wildlife ranger of 29
137	137	the United States, the State, or a political subdivision of the State, the amount included 30
138	138	under subsection [(b)(1)] (B) of this section is limited to the first $15,000 of retirement 31
139	139	income that is attributable to the resident’s employment as a forest ranger, park ranger, or 32
140	140	wildlife ranger of the United States, the State, or a political subdivision of the State unless: 33
141	141	4 HOUSE BILL 355
142	142
143	143
144	144	(1) the resident is at least 65 years old or is totally disabled; or 1
145	145
146	146	(2) the resident’s spouse is totally disabled. 2
147	147
148	148	SECTION 2. AND BE IT FURTHER ENACTED, That this Act shall take effect July 3
149	149	1, 2025, and shall be applicable to all taxable years beginning after December 31, 2024. 4