EXPLANATION: CAPITALS INDICATE MAT TER ADDED TO EXISTIN G LAW.
[Brackets] indicate matter deleted from existing law.
*hb0708*
HOUSE BILL 708
Q3 5lr1325
HB 608/24 – W&M CF 5lr3340
By: Delegate Wilkins
Introduced and read first time: January 24, 2025
Assigned to: Ways and Means
A BILL ENTITLED
AN ACT concerning 1
Earned Income Tax Credit – Individuals Without Qualifying Children – 2
Eligibility 3
FOR the purpose of expanding eligibility for the Maryland earned income tax credit for 4
individuals without qualifying children by altering the income thresholds at which 5
the credit phases out; providing that, after a certain taxable year, the income 6
threshold and phase–out amounts are adjusted annually for inflation; and generally 7
relating to the Maryland earned income tax credit. 8
BY repealing and reenacting, with amendments, 9
Article – Tax – General 10
Section 10–704 11
Annotated Code of Maryland 12
(2022 Replacement Volume and 2024 Supplement) 13
SECTION 1. BE IT ENACTED BY THE GENERAL ASSEMBLY OF MARYLAND, 14
That the Laws of Maryland read as follows: 15
Article – Tax – General 16
10–704. 17
(a) In this section, “taxpayer” means: 18
(1) an individual filing an income tax return; or 19
(2) a married couple filing a joint income tax return. 20
(b) (1) A resident who is a taxpayer may claim a credit against the State 21
income tax for a taxable year in the amount determined under subsection (c) of this section 22
for earned income. 23 2 HOUSE BILL 708
(2) A resident who is a taxpayer may claim a credit against the county 1
income tax for a taxable year in the amount determined under subsection (d) of this section 2
for earned income. 3
(c) (1) Except as provided in paragraphs (2) and (3) of this subsection and 4
subject to subsection (e) of this section, the credit allowed against the State income tax 5
under subsection (b)(1) of this section is the lesser of: 6
(i) 50% of the earned income credit allowable for the taxable year 7
under § 32 of the Internal Revenue Code or that would have been allowable but for the 8
limitation under § 32(m) of the Internal Revenue Code; or 9
(ii) the State income tax for the taxable year. 10
(2) (i) Subject to subparagraph (iii) of this paragraph and subsection (e) 11
of this section, a resident may claim a refund in the amount, if any, by which the applicable 12
percentage specified in subparagraph (ii) of this paragraph of the earned income credit 13
allowable for the taxable year under § 32 of the Internal Revenue Code exceeds the State 14
income tax for the taxable year. 15
(ii) Subject to subparagraph (iii) of this paragraph, the applicable 16
percentage of the earned income credit allowable under § 32 of the Internal Revenue Code 17
to be used for purposes of determining the refund provided under this paragraph is: 18
1. 25% for a taxable year beginning after December 31, 2013, 19
but before January 1, 2015; 20
2. 25.5% for a taxable year beginning after December 31, 21
2014, but before January 1, 2016; 22
3. 26% for a taxable year beginning after December 31, 2015, 23
but before January 1, 2017; 24
4. 27% for a taxable year beginning after December 31, 2016, 25
but before January 1, 2018; 26
5. 28% for a taxable year beginning after December 31, 2017, 27
but before January 1, 2020; and 28
6. 45% for a taxable year beginning after December 31, 2019. 29
(iii) For purposes of determining the refund provided under this 30
paragraph, the earned income credit allowable under § 32 of the Internal Revenue Code is 31
calculated without regard to the limitation under § 32(m) of the Internal Revenue Code. 32
(3) (i) For purposes of this section for an individual without a qualifying 33 HOUSE BILL 708 3
child, the credit allowable for a taxable year under § 32 of the Internal Revenue Code is 1
calculated without regard to: 2
1. the minimum age requirement under § 32(c)(1)(A)(ii)(II) of 3
the Internal Revenue Code; or 4
2. the limitation under § 32(m) of the Internal Revenue Code. 5
(ii) [Subject to subparagraph (iii) of this paragraph, the] THE credit 6
allowed against the State income tax under subsection (b)(1) of this section for an individual 7
without a qualifying child is: 8
1. equal to 100% of the earned income credit allowable for a 9
taxable year under § 32 of the Internal Revenue Code; AND 10
2. CALCULATED BY SUBSTI TUTING: 11
A. $7,840 FOR THE EARNED INCOM E AMOUNT IN § 12
32(B)(2)(A) OF THE INTERNAL REVENUE CODE; AND 13
B. $19,160 FOR THE PHASE –OUT AMOUNT IN § 14
32(B)(2)(A) OF THE INTERNAL REVENUE CODE. 15
[(iii) For a taxable year beginning after December 31, 2019, but before 16
January 1, 2023, the tax credit allowed under this paragraph may not exceed $530 for a 17
taxable year.] 18
(III) 1. FOR EAC H TAXABLE YEAR BEGIN NING AFTER 19
DECEMBER 31, 2024, THE EARNED INCOME AM OUNT AND PHASE –OUT AMOUNT IN 20
SUBPARAGRAPH (II)2 OF THIS PARAGRAPH SH ALL BE INCREASED BY AN AMOUNT 21
EQUAL TO THE PRODUCT OF MULTIPLYING EACH AMOUNT BY THE COST –OF–LIVING 22
ADJUSTMENT SPECIFI ED IN SUBSUBPARAGRAP H 2 OF THIS SUBPARAGRAPH . 23
2. FOR THE PURPOSES OF T HIS SUBPARAGRAPH , THE 24
COST–OF–LIVING ADJUSTMENT IS THE COST–OF–LIVING ADJUSTMENT WI THIN THE 25
MEANING OF § 1(F)(3) OF THE INTERNAL REVENUE CODE FOR THE CALENDAR YEAR 26
IN WHICH THE TAXA BLE YEAR BEGINS , AS DETERMINED BY THE COMPTROLLER BY 27
SUBSTITUTING “CALENDAR YEAR 2022” FOR “CALENDAR YEAR 2016” IN § 1(F)(3)(A) 28
OF THE INTERNAL REVENUE CODE. 29
3. IF ANY INCREASE DETER MINED UNDER 30
SUBSUBPARAGRAPH 1 OF THIS SUBPARAGRAPH IS NOT A MULTIPLE OF $10, THE 31
INCREASE SHALL BE RO UNDED DOWN TO THE NE XT LOWEST MULTIPLE O F $10. 32
4 HOUSE BILL 708
(iv) If the tax credit allowed under this paragraph in any taxable year 1
exceeds the total tax otherwise payable by the individual without a qualifying child for that 2
taxable year, the individual may claim a refund in the amount of the excess. 3
(d) (1) Except as provided in paragraph (2) of this subsection and subject to 4
subsection (e) of this section, the credit allowed against the county income tax under 5
subsection (b)(2) of this section is the lesser of: 6
(i) the earned income credit allowable for the taxable year under § 7
32 of the Internal Revenue Code or that would have been allowable but for the limitation 8
under § 32(m) of the Internal Revenue Code multiplied by 10 times the county income tax 9
rate for the taxable year; or 10
(ii) the county income tax for the taxable year. 11
(2) (i) A county may provide, by law, for a refundable county earned 12
income credit as provided in this paragraph. 13
(ii) If a county provides for a refundable county earned income credit 14
under this paragraph, on or before July 1 prior to the beginning of the first taxable year for 15
which it is applicable, the county shall give the Comptroller notice of the refundable county 16
earned income credit. 17
(iii) If a county provides for a refundable county earned income credit 18
under this paragraph, a resident may claim a refund of the amount, if any, by which the 19
product of multiplying the credit allowable for the taxable year under § 32 of the Internal 20
Revenue Code or that would have been allowable but for the limitation under § 32(m) of 21
the Internal Revenue Code by 5 times the county income tax rate for the taxable year 22
exceeds the county income tax for the taxable year. 23
(iv) The amount of any refunds payable under a refundable county 24
earned income credit operates to reduce the income tax revenue from individuals 25
attributable to the county income tax for that county. 26
(e) (1) Subject to paragraph (2) of this subsection, for an individual who is a 27
resident of the State for only a part of the year, the amount of the credit or refund allowed 28
under this section shall be determined based on the part of the earned income credit 29
allowable for the taxable year under § 32 of the Internal Revenue Code that is attributable 30
to Maryland, determined by multiplying the federal earned income credit by a fraction: 31
(i) the numerator of which is the Maryland adjusted gross income of 32
the individual; and 33
(ii) the denominator of which is the federal adjusted gross income of 34
the individual. 35
(2) For purposes of determining the amount of the credit or refund under 36 HOUSE BILL 708 5
paragraph (1) of this subsection, the part of the earned income credit allowable for the 1
taxable year under § 32 of the Internal Revenue Code is calculated without regard to the 2
limitation under § 32(m) of the Internal Revenue Code. 3
SECTION 2. AND BE IT FURTHER ENACTED, That this Act shall take effect July 4
1, 2025, and shall be applicable to all taxable years beginning after December 31, 2024. 5