Bill > HB323

This bill allows individuals who are subject to early withdrawal penalties on retirement funds due to financial exploitation to claim a credit against their state income tax. Financial exploitation is defined broadly and includes acts of deception, misuse of assets, or breach of trust that result in a loss of funds or property for a susceptible adult or older adult. An eligible taxpayer can claim a credit equal to the lesser of the state income tax attributable to the early withdrawal caused by financial exploitation or the federal tax penalties paid under Section 72(t) of the Internal Revenue Code for such an early withdrawal. To claim this credit, taxpayers must provide documentation demonstrating the financial loss due to exploitation, such as reports from adult protective services, law enforcement, or financial institutions, and an affidavit confirming the penalties were incurred due to financial exploitation. This provision applies to taxable years beginning after December 31, 2025.

Budget and Finance

https://mgaleg.maryland.gov/mgawebsite/Legislation/Details/HB0323?ys=2026RS