WeVote
Log In

Bill

Bill

HB 124

Income Tax - Subtraction Modification - Losses From Theft or Fraud

2026 Regular Session Introduced by Joe Vogel

Maryland bill allows taxpayers to deduct theft and fraud losses from state income taxes, providing financial relief to victims while reducing state revenue.

Hearing 1/29 at 1:00 p.m.
0
WeVote Research Nonpartisan
Bill Summary · HB 124

Legislative bill overview

HB 124 modifies Maryland's income tax code to allow taxpayers to subtract losses resulting from theft or fraud when calculating their state taxable income. This would align Maryland's tax treatment with federal tax provisions that permit deductions for casualty and theft losses under certain circumstances. The bill provides relief to individuals and businesses that experience financial losses due to criminal victimization.

Why is this important

Theft and fraud can impose significant financial hardships on individuals and businesses. By allowing a tax subtraction for these losses, Maryland would reduce the effective cost of victimization and provide some tax relief to affected parties. This could particularly benefit small business owners and middle-income households recovering from identity theft, employee theft, or scams. The modification also creates parity with federal tax treatment, simplifying compliance.

Potential points of contention

  • Definition and verification challenges: The bill may require clear definitions of what qualifies as theft or fraud and what documentation proves such losses occurred, raising administrative complexity for the Maryland Department of Revenue.
  • Revenue impact and fairness concerns: Critics may argue that allowing these deductions reduces state tax revenue and potentially benefits wealthier individuals and businesses more than lower-income taxpayers who cannot claim losses.
  • Relationship to insurance and restitution: Questions may arise about how this deduction interacts with insurance proceeds, restitution orders, or federal claims—whether taxpayers can "double benefit" from both insurance payouts and tax deductions.

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

Sign in to ask a question.