Income Tax – Individual Itemized Deductions – Alterations

HB 926 modifies Maryland's income tax code to adjust how itemized deductions are calculated for certain taxpayers. It requires individuals who itemize deductions to further reduce their Maryland itemized deductions by either the amount of real property taxes paid (capped at $10,000) or $10,000, for tax years 2025 through 2029. This applies to Maryland taxpayers who claim federal itemized deductions, including homeowners who deduct property taxes. The bill also maintains a separate phase-out for high-income earners (exceeding $100,000 single/$200,000 married) where deductions are reduced by 7.5% of the excess AGI. The changes take effect July 1, 2026.