Maryland 2025 Regular Session

Maryland Senate Bill SB412 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 EXISTING LAW.
4	4	[Brackets] indicate matter deleted from existing law.
5	5	sb0412
6	6
7	7	SENATE BILL 412
8	8	Q3 5lr1133
9	9
10	10	By: Senator Waldstreicher
11	11	Introduced and read first time: January 20, 2025
12	12	Assigned to: Budget and Taxation
13	13
14	14	A BILL ENTITLED
15	15
16	16	AN ACT concerning 1
17	17
18	18	Income Tax – Subtraction Modification – Maryland 529 Plan Contributions 2
19	19
20	20	FOR the purpose of altering, beginning in a certain taxable year, the maximum amount of 3
21	21	a subtraction modification under the Maryland income tax for certain contributions 4
22	22	made to a Maryland Senator Edward J. Kasemeyer Prepaid College Trust account, 5
23	23	Maryland Senator Edward J. Kasemeyer College Investment Plan, or Broker–Dealer 6
24	24	College Investment Plan; and generally relating to a subtraction modification for 7
25	25	contributions made to college savings accounts. 8
26	26
27	27	BY repealing and reenacting, without amendments, 9
28	28	Article – Tax – General 10
29	29	Section 10–208(a) 11
30	30	Annotated Code of Maryland 12
31	31	(2022 Replacement Volume and 2024 Supplement) 13
32	32
33	33	BY repealing and reenacting, with amendments, 14
34	34	Article – Tax – General 15
35	35	Section 10–208(n) and (o) 16
36	36	Annotated Code of Maryland 17
37	37	(2022 Replacement Volume and 2024 Supplement) 18
38	38
39	39	SECTION 1. BE IT ENACTED BY THE GENERAL ASSEMBLY OF MARYLAND, 19
40	40	That the Laws of Maryland read as follows: 20
41	41
42	42	Article – Tax – General 21
43	43
44	44	10–208. 22
45	45
46	46	(a) In addition to the modification under § 10–207 of this subtitle, the amounts 23
47	47	under this section are subtracted from the federal adjusted gross income of a resident to 24
48	48	determine Maryland adjusted gross income. 25 2 SENATE BILL 412
49	49
50	50
51	51
52	52	(n) (1) (i) In this subsection the following words have the meanings 1
53	53	indicated. 2
54	54
55	55	(ii) “Account holder” has the meaning stated in § 18–1901 of the 3
56	56	Education Article. 4
57	57
58	58	(iii) “Contributor” means an individual who contributes funds to a 5
59	59	Maryland Senator Edward J. Kasemeyer Prepaid College Trust account under Title 18, 6
60	60	Subtitle 19 of the Education Article. 7
61	61
62	62	(iv) “Qualified higher education expenses” has the meaning stated in 8
63	63	§ 529 of the Internal Revenue Code. 9
64	64
65	65	(2) The subtraction under subsection (a) of this section includes the amount 10
66	66	of advance payments of qualified higher education expenses made by an account holder or 11
67	67	a contributor during the taxable year as provided under a prepaid contract in accordance 12
68	68	with the Maryland Senator Edward J. Kasemeyer Prepaid College Trust. 13
69	69
70	70	(3) Subject to paragraph (4) of this subsection, for each prepaid contract, 14
71	71	the subtraction under paragraph (2) of this subsection may not exceed: 15
72	72
73	73	(I) $2,500 for any taxable year BEGINNING BEFORE JANUARY 1, 16
74	74	2026; AND 17
75	75
76	76	(II) $4,850 FOR ANY TAXABLE YEAR BEGINNING AFTER 18
77	77	DECEMBER 31, 2025. 19
78	78
79	79	(4) (I) The amount disallowed as a subtraction under this subsection for 20
80	80	any taxable year BEGINNING BEFORE JANUARY 1, 2026, as a result of the limitation 21
81	81	under paragraph (3) of this subsection shall be treated as having been made in the next 22
82	82	succeeding taxable year and, subject to the $2,500 annual limitation for each prepaid 23
83	83	contract, may be carried over to succeeding taxable years until the full amount of the 24
84	84	advance payments has been allowed as a subtraction. 25
85	85
86	86	(II) THE AMOUNT DISALLOWED AS A SUBTRACTION UND ER THIS 26
87	87	SUBSECTION FOR ANY T AXABLE YEAR BEGINNIN G AFTER DECEMBER 31, 2025, AS A 27
88	88	RESULT OF THE LIMITA TION UNDER PARAGRAPH (3) OF THIS SUBSECTION S HALL BE 28
89	89	TREATED AS HAVING BE EN MADE IN THE N EXT SUCCEEDING TAXAB LE YEAR AND, 29
90	90	SUBJECT TO THE $4,850 ANNUAL LIMITATION FO R EACH PREPAID CONTR ACT, MAY 30
91	91	BE CARRIED OVER TO S UCCEEDING TAXABLE YE ARS UNTIL THE FULL A MOUNT OF 31
92	92	THE ADVANCE PAYMENTS HAS BEEN ALLOWED AS A SUBTRACTION . 32
93	93
94	94	(o) (1) (i) In this subsection the following words have the meanings 33
95	95	indicated. 34
96	96	SENATE BILL 412 3
97	97
98	98
99	99	(ii) “Account holder” means an account holder as defined in § 1
100	100	18–19A–01 or § 18–19B–01 of the Education Article. 2
101	101
102	102	(iii) “Contributor” means an individual who contributes funds to a 3
103	103	Maryland Senator Edward J. Kasemeyer College Investment Plan or Broker –Dealer 4
104	104	College Investment Plan account under Title 18, Subtitle 19A or Subtitle 19B of the 5
105	105	Education Article. 6
106	106
107	107	(iv) “Investment account” means an investment account as defined 7
108	108	in § 18–19A–01 or § 18–19B–01 of the Education Article. 8
109	109
110	110	(v) “Qualified designated beneficiary” means a qualified designated 9
111	111	beneficiary as defined in § 18–19A–01 or § 18–19B–01 of the Education Article. 10
112	112
113	113	(2) (i) Except as provided in subparagraph (ii) of this paragraph and 11
114	114	subject to the limitation under paragraph (3) of this subsection, the subtraction under 12
115	115	subsection (a) of this section includes the amount contributed by an account holder or a 13
116	116	contributor during the taxable year to an investment account. 14
117	117
118	118	(ii) The subtraction under subparagraph (i) of this paragraph may 15
119	119	not be taken if the account holder received a State contribution under § 18–19A–04.1 of the 16
120	120	Education Article during the taxable year. 17
121	121
122	122	(3) (i) Subject to paragraph (4) of this subsection, for each account 18
123	123	holder or contributor for all investment accounts maintained in the Maryland Senator 19
124	124	Edward J. Kasemeyer College Investment Plan and the Maryland Broker–Dealer College 20
125	125	Investment Plan for the same qualified designated beneficiary, the subtraction under 21
126	126	paragraph (2) of this subsection may not exceed [$2,500]: 22
127	127
128	128	1. for any taxable year BEGINNING BEFORE JANUARY 1, 23
129	129	2026, $2,500 per qualified designated beneficiary; AND 24
130	130
131	131	2. FOR ANY TAXABLE YEAR BEGINNING AFTER 25
132	132	DECEMBER 31, 2025, $4,850 PER QUALIFIED DESIGNATED BENEFICIARY . 26
133	133
134	134	(ii) For purposes of the limitation under this paragraph, each spouse 27
135	135	on a joint return shall be treated separately. 28
136	136
137	137	(4) (I) Subject to the $2,500 annual limitation for each account holder 29
138	138	or contributor for each qualified designated beneficiary, the amount disallowed as a 30
139	139	subtraction under this subsection for any taxable year BEGINNING BEFORE JANUARY 1, 31
140	140	2026, as a result of the limitation under paragraph (3) of this subsection may be carried 32
141	141	over until used to the next 10 succeeding taxable years as a subtraction. 33
142	142
143	143	(II) SUBJECT TO THE $4,850 ANNUAL LIMITATION FO R EACH 34
144	144	ACCOUNT HOLDER OR CO NTRIBUTOR FOR EACH QUALIFIED DESIGNATED 35 4 SENATE BILL 412
145	145
146	146
147	147	BENEFICIARY, THE AMOUNT DISALLOWE D AS A SUBTRACTION U NDER THIS 1
148	148	SUBSECTION FOR ANY T AXABLE YEAR BEGINNIN G AFTER DECEMBER 31, 2025, AS A 2
149	149	RESULT OF THE LIMITA TION UNDER PARAGRAPH (3) OF THIS SUBSECTION M AY BE 3
150	150	CARRIED OVER UNTIL U SED TO THE NEXT 10 SUCCEEDING TAXABLE Y EARS AS A 4
151	151	SUBTRACTION . 5
152	152
153	153	SECTION 2. AND BE IT FURTHER ENACTED, That this Act shall take effect July 6
154	154	1, 2025. 7