Bill > HB614

This bill clarifies the calculation of the local earned income tax credit by defining two key terms: "applicable county income tax rate" and "taxpayer". For counties with a marginal income tax rate (meaning tax rates that change based on income levels), the applicable rate would be the lowest marginal rate. For counties with flat income tax rates, the applicable rate would be the specific rate matching the taxpayer's income level and filing status. A "taxpayer" is defined as either an individual filing an income tax return or a married couple filing a joint return. The bill modifies how the earned income credit is calculated, using the new "applicable county income tax rate" instead of the previous language referencing the county's lowest marginal income tax rate. The bill also maintains existing provisions that allow counties to provide a refundable earned income credit, where residents can claim a refund if their credit exceeds their county income tax. The changes will take effect on July 1, 2025, and apply to all taxable years beginning after December 31, 2024, providing clarity and potentially more consistent tax credit calculations across different Maryland counties.

Budget and Finance

Ways and Means (H)

https://mgaleg.maryland.gov/mgawebsite/Legislation/Details/HB0614?ys=2025RS