Bill > SB163

This bill modifies Maryland's income tax law by exempting certain foreign earned income from being added back to a taxpayer's income when calculating Maryland adjusted gross income, even if that income is otherwise taxable by the state but exempt from federal tax. Specifically, it clarifies that an "addition modification," which is an adjustment made to federal adjusted gross income to arrive at Maryland adjusted gross income, will not apply to foreign earned income as defined by Section 911(b)(1) of the Internal Revenue Code, subject to limitations outlined in Section 911(b)(2). This change is intended to address situations where income is exempt from federal taxes due to federal law or treaties but is still subject to state income tax. The bill applies to tax years beginning after December 31, 2025.

Budget and Finance

https://mgaleg.maryland.gov/mgawebsite/Legislation/Details/SB0163?ys=2026RS