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HB 1390

Income Tax - Subtraction Modification - Losses From Theft or Fraud

2025 Regular Session Introduced by Joe Vogel

HB 1390 permits Maryland taxpayers to deduct theft and fraud losses from taxable income, providing tax relief to crime victims but with undefined scope and verification mechanisms.

Hearing 3/04 at 1:00 p.m.
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WeVote Research Nonpartisan
Bill Summary · HB 1390

Legislative bill overview

HB 1390 modifies Maryland's income tax code to allow taxpayers to subtract losses resulting from theft or fraud when calculating their taxable income. This would create a new deduction mechanism for victims of these crimes, reducing their overall tax burden in the year losses occur.

Why is this important

Theft and fraud victims already face financial hardship from their losses; this bill would provide tax relief by allowing them to offset income with documented losses. The provision could significantly benefit individuals who experience identity theft, investment fraud, or other criminal losses, though the fiscal impact on state revenue depends on how broadly "losses" are defined and claimed.

Potential points of contention

  • Definition and verification challenges: The bill doesn't specify what constitutes qualifying losses or what documentation is required, raising questions about preventing abuse or fraudulent deduction claims
  • Timing and interaction with insurance: Unclear whether this applies to uninsured losses only or also covers losses that insurance reimburses, and whether it conflicts with federal tax treatment
  • Revenue impact: Allowing broad loss deductions could reduce state tax revenue; fiscal note data would clarify the projected cost
  • Fairness questions: Some may argue tax code shouldn't compensate for what criminal justice and insurance systems should address, while others see it as appropriate assistance

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

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