Income Tax - Subtraction Modification for Military Retirement Income (Keep Our Heroes Home Act)

HB 761 modifies Maryland's income tax code to increase the tax break for military retirees. It removes the age requirement for the full tax deduction on military retirement income, raising the deduction from $12,500 (under 55) or $20,000 (55+) to $25,000 for 2026-2026 and $40,000 starting in 2027. This directly affects Maryland residents who receive military retirement income from active or reserve service, including death benefits. The bill amends Section 10-207(q) of Maryland’s tax code to apply the higher deduction regardless of the retiree’s age. The change takes effect July 1, 2026.