Income Tax - Subtraction Modification - Retirement Income

HB 707 modifies Maryland's income tax rules to allow residents aged 65+ or disabled individuals (or their spouses) to subtract a larger portion of retirement income from taxable income. Starting in 2026, it increases the subtraction from 30% to 60% and eventually to 100% of retirement income from qualified plans (like 401(k)s or IRAs) for tax years beginning after 2025. It also clarifies that military or public safety retirement income already used for other tax subtractions cannot be double-counted. Special rules apply to retired forest/park/rangers, limiting the subtraction to $15,000 of their specific retirement income unless they or their spouse are disabled or over 65. The changes take effect July 1, 2026, for all applicable tax years.