Budget & Taxes (Tax Credits · Seniors)

This bill creates a state income tax credit for Maryland residents aged 77 and older to help reduce their tax burden. Eligible taxpayers must have federal adjusted gross income below $175,000 for individuals or $250,000 for couples filing jointly. The credit amount increases with age, ranging from 25% of the state income tax for those turning 77 to a full 100% credit for those aged 80 and older. The bill applies to taxable years beginning after December 31, 2025, and prevents taxpayers from claiming both this credit and another existing senior tax credit in the same year.

HB 745 makes Maryland's senior income tax credit refundable, allowing eligible residents aged 65 or older to receive a cash refund if the credit exceeds their state tax liability. The credit applies to single seniors with federal adjusted gross income under $100,000 ($1,000 credit) and married couples filing jointly with income under $150,000 ($1,750 credit, or $1,000 if only one spouse qualifies). In specific fiscal years when state revenue estimates fall more than 3.75% below projections, the credit amount is reduced to $500 for singles ($50,000-$100,000 income) or $875 for married couples ($100,000-$150,000 income). This change ensures seniors receive the full credit amount as a refund rather than losing unused portions under previous non-refundable rules.

SB 382, the "Retire in Maryland Tax Relief Act," provides a state income tax credit for Maryland residents aged 77 or older with federal adjusted gross income under $175,000 (for individuals or certain filing statuses). The credit amount increases with age: 25% of state tax for 77-year-olds, rising to 100% for those 80 or older. Married couples filing jointly must both be 77+ to qualify for the tiered credit, and unused credit amounts cannot be carried forward to future years. The bill applies to tax years beginning after December 31, 2025, and takes effect July 1, 2026.