Bill > HB707

This bill expands the types of retirement income that can be subtracted from Maryland income tax for individuals who are at least 65 years old, disabled, or whose spouse is disabled, by including income from various "qualified retirement plans" such as those under Internal Revenue Code sections 401(a), 403, 457(b), 408, 408A, and simplified employee pensions, while excluding ineligible deferred compensation plans. The bill also gradually increases the percentage of this retirement income that can be subtracted, starting with 30% for taxable years beginning after December 31, 2025, and before January 1, 2027, then increasing to 60% for taxable years beginning after December 31, 2026, and before January 1, 2028, and finally reaching 100% for taxable years beginning after December 31, 2027, effectively repealing a previous limitation on the maximum subtraction amount and applying these changes to all taxable years beginning after December 31, 2025. Importantly, any income already eligible for subtraction under other tax subtractions, such as military or public safety retirement income, cannot be claimed again under this new provision.

Budget and Finance

https://mgaleg.maryland.gov/mgawebsite/Legislation/Details/HB0707?ys=2026RS