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HB 761

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

2026 Regular Session Introduced by Nick Allen and 20 co-sponsors

Maryland HB 761 allows military retirees to subtract retirement income from state taxes, reducing tax burden to compete with neighboring states for veteran residents.

Hearing 2/19 at 1:00 p.m.
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Bill Summary · HB 761

Legislative bill overview

HB 761 modifies Maryland's state income tax code to allow military retirees to subtract a portion or all of their military retirement income when calculating state taxable income. The bill aims to provide tax relief specifically for retired military service members, potentially making Maryland more competitive in retaining veteran residents compared to other states that offer similar exemptions.

Why is this important

Military retirement income is a significant portion of many veterans' earnings, and several neighboring and competing states (like Virginia, North Carolina, and Pennsylvania) already exempt or substantially reduce taxes on military pensions. This bill addresses whether Maryland should adopt similar incentives to attract and retain retired service members and their families, which could have fiscal impacts on state revenue while potentially boosting the veteran population in the state.

Potential points of contention

  • Revenue impact: The bill would reduce state income tax collections from military retirees; the fiscal impact depends on how much income is subtracted and how many retirees qualify
  • Equity concerns: Critics may argue this creates a special tax status for one group of retirees while civilian retirees receive no such benefit, raising fairness questions
  • Targeting effect: The benefit primarily aids higher-income retirees (military pensions can be substantial), potentially concentrating tax relief among more affluent residents rather than lower-income populations

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

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