Bill > HB614

This bill clarifies the calculation of the local earned income tax credit (EITC) for Maryland counties by introducing specific definitions and rules. The bill defines two new terms: "Applicable County Income Tax Rate" and "Taxpayer". For counties with marginal income tax rates, the credit will be calculated using the county's lowest marginal tax rate, while for counties with flat income tax rates, the rate will depend on the taxpayer's income level and filing status. The bill specifies that a "Taxpayer" can be an individual or a married couple filing a joint tax return. When calculating the local EITC, the credit will be the lesser of either 10 times the applicable county income tax rate multiplied by the federal earned income credit or the total county income tax for that year. Additionally, counties may provide a refundable EITC, where residents can claim a refund if the calculated credit exceeds their county income tax. The bill will take effect on July 1, 2025, and apply to all taxable years beginning after December 31, 2024, providing clarity and potentially beneficial tax provisions for Maryland residents.

Budget and Finance

Ways and Means (H)

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