Bill
SB 668
SB 668 expands Maryland’s childless EITC by raising and indexing the eligibility thresholds, boosting credits for low-income filers without qualifying children.
Status & Timing
- Introduced / first read: January 26, 2025 (assigned to Budget & Taxation).
- Scheduled hearing: February 12, 2025 at 1:00 p.m. (per bill tracker).
- Effective date in fiscal analysis: July 1, 2025; applies to tax year 2025 and thereafter.
Purpose and intent
- To expand Maryland’s earned income tax credit (EITC) for taxpayers who do not have a qualifying child by raising the income threshold at which the credit begins to phase out, and by indexing those thresholds for inflation. The change is designed to increase eligibility and credit amounts for childless workers.
Key provisions
- State EITC structure for childless individuals: the bill continues Maryland’s approach of providing a State credit equal to the federal EITC amount for childless taxpayers, but with modified calculation thresholds.
- Substituted income thresholds (starting tax year 2025):
- Earned income amount (replacement for the federal “earned income amount” in §32(b)(2)(A) of the IRC): $7,840.
- Phase‑out amount (replacement for the federal “phase‑out amount”): $19,160.
- Annual inflation adjustment: for each taxable year after 2024, both substituted amounts will be increased by a cost‑of‑living adjustment tied to the Internal Revenue Code’s §1(f)(3) method (as specified in the bill). Adjustments are rounded down to the nearest $10.
- Refundability: if the State credit in any year exceeds the taxpayer’s Maryland tax liability, the taxpayer may claim a refund for the excess (consistent with current treatment of the childless State EITC).
- Interaction with prior expansions: the bill builds on earlier Maryland changes that made the State childless EITC fully refundable and removed certain age and dollar caps.
Who is affected
- Primary beneficiaries: Maryland resident taxpayers without qualifying children who earn low to moderate incomes — expanding both the number of eligible filers and the amount of credit they receive.
- State government: General Fund revenues decline due to larger/more refunds.
- Local governments: counties that provide matching supplements (e.g., Montgomery County’s Working Families Income Supplement) may see increased program costs.
Fiscal impact (Department of Legislative Services)
- Estimated General Fund revenue loss:
- FY 2026: -$99.1 million
- FY 2027: -$103.1 million
- FY 2028: -$107.2 million
- FY 2029: -$111.5 million
- FY 2030: -$115.9 million
- The Comptroller’s Office can implement the change with existing resources.
- DLS noted that, based on 2022 filing patterns, roughly 164,000 returns claimed the State childless EITC and an additional ~171,000 returns might have been eligible under the bill’s thresholds.
Procedural notes / related legislation
- Cross-file / companion: HB 708 (Delegate Wilkins).
- The bill was assigned to the Budget & Taxation Committee; public hearing scheduled (see status above).
- Applies to tax year 2025 and subsequent years if enacted.
Bottom line
SB 668 increases the income range over which Maryland’s childless EITC is available and makes those thresholds inflation‑adjusted, which broadens eligibility and raises benefit amounts for many low‑income Marylanders without qualifying children. The expansion has a material near‑term cost to the State general fund (roughly $99 million in the first fiscal year modeled).
Compiled from official sources — confirm details with the bill’s official record.
Sign in to ask a question.
