Income Tax - Credit for Income Taxes and Penalties Due to Financial Exploitation

HB 323 creates a Maryland state income tax credit for residents who paid early withdrawal penalties on retirement funds due to financial exploitation. The credit covers the lesser of the state tax attributable to those penalties or the federal penalty paid, directly helping vulnerable adults (defined as older adults or those with diminished capacity due to age, disability, or health conditions) who were exploited by someone in a position of trust. It applies when exploitation involved deception, breach of fiduciary duty, or misuse of assets leading to forced early retirement fund withdrawals. This policy change provides financial relief for victims of financial exploitation by offsetting penalties they incurred.