Income Tax - Credit for Cybersecurity Measures Undertaken by Small Businesses

HB 1321 creates a refundable state income tax credit for Maryland small businesses (defined as entities with 50 or fewer employees, including those with no employees) to offset costs for specific cybersecurity measures. It allows a credit of up to $1,000 for an initial cybersecurity risk assessment and implementation, or up to $500 annually for recurring measures like antivirus software, multi-factor authentication, and data encryption. If the credit exceeds the business’s income tax liability, the excess is refundable. Businesses must submit proof of qualifying costs with their tax return to claim the credit, which applies to taxable years beginning after December 31, 2024.