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SB 291

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

2026 Regular Session Introduced by Jack Bailey

SB 291 creates an income tax credit for Maryland residents who paid taxes on money lost to financial exploitation, providing victim relief through the tax system.

Hearing 2/03 at 2:00 p.m.
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WeVote Research Nonpartisan
Bill Summary · SB 291

Legislative bill overview

SB 291 would establish an income tax credit for Maryland residents who have paid income taxes and penalties as a direct result of financial exploitation. The bill aims to provide relief to victims of fraud, scams, or other forms of financial abuse by offsetting the tax burden imposed on money they lost to exploitation.

Why is this important

Financial exploitation victims often face compounded harm—they lose money to fraudsters and then owe taxes on the stolen funds or related penalties. This bill recognizes that victims shouldn't bear the full financial burden of exploitation and attempts to make them whole through the tax system. It's one mechanism states can use to support vulnerable populations experiencing economic crime.

Potential points of contention

  • Definition and verification challenges: Determining what constitutes "financial exploitation" for tax purposes and preventing fraudulent claims could be administratively complex and costly
  • Scope limitations: The bill's definition of eligible exploitation may be too narrow or too broad, potentially excluding legitimate victims or including borderline cases
  • Revenue impact and fairness: Critics may argue that using tax credits to subsidize losses from private crimes shifts costs to other taxpayers rather than holding perpetrators accountable
  • Implementation burden: The Department of Revenue would need clear procedures for victims to document exploitation and claim credits, raising implementation costs

Compiled from official sources — confirm details with the bill’s official record.

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