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HB 355

Income Tax - Subtraction Modification - Retirement Income

2025 Regular Session Introduced by Lauren Arikan and 6 co-sponsors

HB 355 modifies Maryland's retirement income tax deductions, potentially reducing state taxes for retirees while decreasing state revenue and raising fairness questions between workers and retirees.

Hearing 1/30 at 1:00 p.m.
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Bill Summary · HB 355

Legislative bill overview

HB 355 modifies Maryland's income tax code to adjust how retirement income is treated for state tax purposes. The bill appears to expand or modify the subtraction modification (deduction) available to taxpayers with retirement income, potentially reducing their taxable income at the state level. This is in its early legislative stage with a hearing scheduled for January 30, 2025.

Why is this important

Maryland's tax treatment of retirement income directly affects tax burden for retirees and can influence where people choose to retire. Any changes to retirement income deductions affect state revenue and may shift the tax burden between working-age and retired taxpayers. Given Maryland's above-average state income tax rates, retirement income provisions significantly impact household finances for seniors.

Potential points of contention

  • Revenue impact: Expanding retirement income deductions reduces state tax revenue, requiring potential offsets elsewhere or affecting budget priorities for education, infrastructure, and services
  • Fairness questions: Changes may create disparities between workers still paying full income taxes and retirees receiving preferential treatment, or between those with retirement savings and those without
  • Specificity unclear: Without bill text details, it's unknown whether modifications benefit all retirees equally or target specific income sources (pensions, IRAs, Social Security, investments), which could create winners and losers

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

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