Bill > HB355

This bill modifies Maryland's income tax subtraction for retirement income, expanding the types of retirement plans that qualify and increasing the percentage of retirement income that can be subtracted from taxable income. Specifically, for residents who are at least 65 years old, totally disabled, or have a totally disabled spouse, the bill allows a subtraction of 30% of qualified retirement plan income in 2025, increasing to 60% in 2026, and reaching 100% in 2027. The definition of "qualified retirement plan" is broadened to include individual retirement accounts, Roth IRAs, rollover IRAs, and simplified employee pensions, which were previously excluded. The bill also removes previous limitations related to Social Security benefits and simplifies the calculation method. For retired forest rangers, park rangers, or wildlife rangers, there are still some restrictions on the retirement income subtraction, particularly for those under 65 or without a disabled spouse. The changes will apply to all taxable years beginning after December 31, 2024, with the bill taking effect on July 1, 2025, ultimately providing more generous tax treatment for retirement income in Maryland.

Budget and Finance

https://mgaleg.maryland.gov/mgawebsite/Legislation/Details/HB0355?ys=2025RS