Tax - General (GTG) — Title 10. Income Tax

an investment conduit under subsection (h)(2) of this section; or

a special exempt entity under subsection (m)(2) of this section.

an agent holding custody or possession of property that the principal of the agent owns; or

a guardian, as defined in § 13–101 of the Estates and Trusts Article.

a regulated investment company;

a real estate investment trust; or

a real estate mortgage investment conduit; or

an individual, other than a fiduciary, who:

a personal representative of an estate if the decedent was domiciled in this State on the date of the decedent’s death; or

a fiduciary, other than a personal representative, of a trust if:

moves to this State with the intent to be domiciled in this State; or

is domiciled in this State and moves outside this State before the last day of the taxable year with the bona fide intention to remain permanently outside of this State.

a farmers’ cooperative;

a political organization; or

a homeowners association; or

the period for which Maryland taxable income is computed under this title; and

the annual accounting period defined in § 441 of the Internal Revenue Code.

a calendar year ending on December 31, as defined in § 441 of the Internal Revenue Code;

a fiscal year ending on the last day of a month other than December, as defined in § 441 of the Internal Revenue Code;

if a return is made for a period of less than 1 year, the period for which the return is made; or

if an election is made under § 441(f) of the Internal Revenue Code, the period for which a return is made.

adjusted, in the case of an entity using the accrual method of accounting to report federal taxable income, to reflect the amount of taxable income that would have been reported under the cash method of accounting;

increased by the sum of:

decreased by the sum of:

a shareholder of an S corporation;

a general or limited partner of a partnership, limited partnership, or limited liability partnership;

a member of a limited liability company; or

a beneficiary of a business trust or statutory trust.

an S corporation;

a partnership;

a limited liability company that is not taxed as a corporation under this title; or

a business trust or statutory trust that is not taxed as a corporation under this title.

in the case of a member who is a resident:

in the case of a nonresident member, derived from or reasonably attributable to the trade or business of the pass–through entity in this State.

shall pay the tax imposed under paragraph (1) of this subsection with respect to the distributive shares or pro rata shares of the nonresident and nonresident entity members of the pass–through entity; or

may elect to pay the tax imposed under paragraph (1) of this subsection with respect to the distributive shares or pro rata shares of all members of the pass–through entity.

a rate equal to the sum of the rate of the tax imposed under § 10–106.1 of this subtitle and the top marginal State tax rate for individuals under § 10–105(a) of this subtitle applied to the sum of each nonresident individual member’s distributive share or pro rata share of the pass–through entity’s nonresident taxable income; and

the rate of the tax for a corporation under § 10–105(b) of this subtitle applied to the sum of each nonresident entity member’s distributive share or pro rata share of the pass–through entity’s nonresident taxable income.

a rate equal to the sum of the rate of the tax imposed under § 10–106.1 of this subtitle and the top marginal State tax rate for individuals under § 10–105(a) of this subtitle applied to the sum of each individual member’s distributive share or pro rata share of the pass–through entity’s taxable income; and

the rate of the tax for a corporation under § 10–105(b) of this subtitle applied to the sum of each entity member’s distributive share or pro rata share of the pass–through entity’s taxable income.

a rate equal to the sum of the rate of the tax imposed under § 10–106.1 of this subtitle and the top marginal State tax rate for individuals under § 10–105(a) of this subtitle applied to the sum of each resident individual member’s distributive share or pro rata share of the pass–through entity’s taxable income as described under subsection (a)(8)(i)2 of this section;

the rate of the tax for a corporation under § 10–105(b) of this subtitle applied to the sum of each resident entity member’s distributive share or pro rata share of the pass–through entity’s taxable income as described under subsection (a)(8)(i)2 of this section;

a rate equal to the sum of the rate of the tax imposed under § 10–106.1 of this subtitle and the top marginal State tax rate for individuals under § 10–105(a) of this subtitle applied to the sum of each nonresident individual member’s distributive share or pro rata share of the pass–through entity’s nonresident taxable income; and

the rate of the tax for a corporation under § 10–105(b) of this subtitle applied to the sum of each nonresident entity member’s distributive share or pro rata share of the pass–through entity’s nonresident taxable income.

A pass–through entity that pays the tax under subsection (b)(1) of this section in accordance with subsection (b)(2)(ii) of this section shall indicate, in the form and manner prescribed by the Comptroller, whether the pass–through entity is calculating the tax in accordance with paragraph (2) or (4) of this subsection.

If a pass–through entity fails to indicate in accordance with subparagraph (i) of this paragraph the manner in which the pass–through entity is calculating the tax, the tax shall be calculated in accordance with paragraph (2) of this subsection.

with respect to a pass–through entity that pays the tax imposed under subsection (b)(1) of this section in accordance with subsection (b)(2)(i) of this section, the sum of all of the nonresident and nonresident entity members’ shares of the pass–through entity’s distributable cash flow; and

with respect to a pass–through entity that pays the tax imposed under subsection (b)(1) of this section in accordance with subsection (b)(2)(ii) of this section, the sum of all of the members’ shares of the pass–through entity’s distributable cash flow.

The tax imposed under subsection (b)(1) of this section that is paid in accordance with subsection (b)(2)(i) of this section and for which no election is made under subsection (b)(2)(ii) of this section does not apply with respect to the distributive share or pro rata share of a member that is itself a pass–through entity formed under the laws of the State or qualified by or registered with the Department of Assessments and Taxation to do business in the State.

A member of a pass–through entity that is itself a pass–through entity as described in subparagraph (i) of this paragraph shall itself comply with the provisions of this section.

a real estate investment trust as defined by § 856 of the Internal Revenue Code; or

an entity that is exempt from taxation under § 501 of the Internal Revenue Code.

that files a composite return on behalf of nonresident and nonresident entity members; or

the entity members of which are tax exempt.

is domiciled in the county; or

maintains a principal residence or a place of abode in the county;

a trust that is principally administered in the county; or

a trust that is otherwise principally connected to the county and is not principally administered in the State; and

2% of Maryland taxable income of $1 through $1,000;

3% of Maryland taxable income of $1,001 through $2,000;

4% of Maryland taxable income of $2,001 through $3,000;

5% of Maryland taxable income of $100,001 through $125,000;

2% of Maryland taxable income of $1 through $1,000;

3% of Maryland taxable income of $1,001 through $2,000;

4% of Maryland taxable income of $2,001 through $3,000;

5% of Maryland taxable income of $150,001 through $175,000;

Except as provided in subparagraph (ii) of this paragraph, if the Maryland adjusted gross income of an individual described in paragraph (1) or (2) of this subsection includes any amount of net capital gain, as defined and determined under the Internal Revenue Code, the State income tax for the individual is the sum of:

To the extent included in calculating net capital gain for federal income tax purposes, any amount of capital gain from the sale or exchange of the following assets is not subject to the additional 2% tax rate specified in subparagraph (i)2 of this paragraph:

the numerator of which is the nonresident’s Maryland taxable income, calculated with the subtractions under § 10–210(b), (e), and (f) of this title; and

the denominator of which is the nonresident’s Maryland taxable income, calculated without regard to the subtractions under § 10–210(b), (e), and (f) of this title.

A county may not increase its county income tax rate above 2.6% until after the county has held a public hearing on the proposed act, ordinance, or resolution to increase the rate.

The county shall publish at least once each week for 2 successive weeks in a newspaper of general circulation in the county:

shall set, by ordinance or resolution, the income brackets that apply to each income tax rate;

may set income brackets that differ from the income brackets to which the State income tax applies;

may not set a minimum income tax rate less than 2.25% of an individual’s Maryland taxable income; and

may not apply an income tax rate to a higher income bracket that is less than the income tax rate applied to a lower income bracket.

the United States or a foreign government; or

an authority, a commission, an instrumentality, a possession, or a territory of the United States or of a foreign government.

60% of the capital gains portion of the total taxable amount; and

the minimum distribution allowance.

the numerator of which is the number of calendar years of active participation by the employee in the plan before January 1, 1974; and

the denominator of which is the number of calendar years of active participation by the employee in the plan.

nonresidents during the entire taxable year; or

corporations not doing business in the State.

In this subsection the following words have the meanings indicated.

“Loss year” means the taxable year in which there occurs a net operating loss that is carried back or carried over in whole or in part to another taxable year.

“Net addition modification” means, for any taxable year, the amount by which the sum of the addition modifications required under this title exceeds the sum of the subtraction modifications allowed under this title.

“Net operating loss deduction” means a net operating loss deduction allowed for federal income tax purposes under § 172 of the Internal Revenue Code.

the amount of the net operating loss deduction attributable to that loss year; or

the amount by which the total net operating loss in the loss year is less than the sum of:

In this subsection the following words have the meanings indicated.

“Account holder” means an account holder as defined in § 18–1901, § 18–19A–01, or § 18–19B–01 of the Education Article.

“Qualified beneficiary” has the meaning stated in § 18–1901 of the Education Article.

“Qualified designated beneficiary” means a qualified designated beneficiary as defined in § 18–19A–01 or § 18–19B–01 of the Education Article.

“Qualified higher education expenses” has the meaning stated in § 529 of the Internal Revenue Code.

any refund received in the taxable year by an account holder under a prepaid contract in accordance with the Maryland Senator Edward J. Kasemeyer Prepaid College Trust; or

any distribution received in the taxable year by an account holder under a prepaid contract in accordance with the Maryland Senator Edward J. Kasemeyer Prepaid College Trust or under an investment account in accordance with the Maryland Senator Edward J. Kasemeyer College Investment Plan or the Maryland Broker–Dealer College Investment Plan that is not used on behalf of the qualified beneficiary or qualified designated beneficiary for qualified higher education expenses.

under § 10–208(n) of this subtitle for the taxable year and all prior taxable years for the account holder’s payments to the prepaid contract under which the refund or distribution is received; or

under § 10–208(o) of this subtitle for the taxable year and all prior taxable years for contributions made by an account holder to an investment account under which the distribution is received.

In this subsection the following words have the meanings indicated.

“ABLE account contributor” means an individual who contributes money to an ABLE account as defined in § 18–19C–01 of the Education Article.

“ABLE account holder” means the holder of an account as defined in § 18–19C–01 of the Education Article.

“Designated beneficiary” has the meaning stated in § 18–19C–01 of the Education Article.

“Qualified disability expenses” has the meaning stated in § 18–19C–01 of the Education Article.

any refund received in the taxable year by an ABLE account contributor under the Maryland ABLE Program; or

any distribution received in the taxable year by an ABLE account holder in accordance with the Maryland ABLE Program that is not used for the benefit of the designated beneficiary for qualified disability expenses.

In this subsection the following words have the meanings indicated.

“Mutual fund” means a regulated investment company as defined under § 851 of the Internal Revenue Code.

“United States government obligation” means an obligation of the United States or an authority, commission, instrumentality, possession, or territory of the United States.

a payment from a pension system to the surviving spouse or other beneficiary of a law enforcement officer or fire fighter whose death arises out of or in the course of employment as a law enforcement officer or fire fighter; and

a payment of a death benefit under a collective bargaining agreement from a county or municpality in the State to the surviving spouse or other beneficiary of a law enforcement officer or fire fighter whose death arises out of or in the course of employment as a law enforcement officer or fire fighter.

money contributed by an individual before 1967 for which the individual was not allowed a deduction at the time of contribution to the account; or

interest or dividends paid on the account on which a State tax on income was paid at the time that the interest or dividends accumulated in the account.

income derived from intangible personal property that is held in trust for the benefit of a nonresident or a corporation not doing business in the State; and

to the extent not included under item (i) of this paragraph, capital gain income derived from the sale or other disposition of intangible personal property that is held in trust, if the proceeds thereof are added to the principal of the trust, and if all the remaindermen in being are:

In this subsection the following words have the meanings indicated.

“Military pay” means pay received as a result of military service.

“Military service” has the meaning stated in subsection (q)(1) of this section.

received by an individual who is in active military service; and

attributable to military service of the individual outside the United States.

is reduced dollar for dollar in the amount by which military pay received by the individual exceeds $15,000; and

is reduced to zero if the amount of military pay received by the individual exceeds $30,000.

In this subsection the following words have the meanings indicated.

“Armed forces” has the meaning stated in § 9–901 of the State Government Article.

“Military retirement income” means retirement income, including death benefits, received as a result of military service.

“Military service” means:

if, on the last day of the taxable year, the individual is under the age of 55 years, the first $12,500 of military retirement income received by an individual during the taxable year; and

if, on the last day of the taxable year, the individual is at least 55 years old, the first $20,000 of military retirement income received by an individual during the taxable year.

In this subsection the following words have the meanings indicated.

“Qualified beneficiary” has the meaning stated in § 18–1901 of the Education Article.

“Qualified designated beneficiary” means a qualified designated beneficiary as defined in § 18–19A–01 or § 18–19B–01 of the Education Article.

“Qualified higher education expenses” has the meaning stated in § 529 of the Internal Revenue Code.

a qualified beneficiary pursuant to a prepaid contract under the Maryland Senator Edward J. Kasemeyer Prepaid College Trust;

a qualified designated beneficiary from an investment account under the Maryland Senator Edward J. Kasemeyer College Investment Plan; or

a qualified designated beneficiary from an investment account under the Maryland Broker–Dealer College Investment Plan.

a refund under the Maryland Senator Edward J. Kasemeyer Prepaid College Trust; or

a distribution that is not used by the qualified beneficiary or qualified designated beneficiary for qualified higher education expenses.

In this subsection the following words have the meanings indicated.

“Holocaust victim” means an individual who died or lost property as a result of discriminatory laws, policies, or actions targeted against discrete groups of individuals based on race, religion, ethnicity, sexual orientation, or national origin, whether or not the individual was actually a member of any of those groups, or because the individual assisted or allegedly assisted any of those groups, between January 1, 1929 and December 31, 1945, in the country of Nazi Germany, areas occupied by Nazi Germany, those European countries allied with Nazi Germany, areas occupied by those European countries allied with Nazi Germany, or any other neutral European country or area in Europe under the influence or threat of invasion by Nazi Germany or by any European country allied with or occupied by Nazi Germany.

“Nazi Germany” means:

income of an individual related to tangible or intangible property that was seized, misappropriated, or lost as a result of the actions or policies of Nazi Germany toward a Holocaust victim; and

amounts received by an individual as reparations or restitution for the loss of liberty or damage to the health of the individual because the individual is:

assets acquired with the assets described in paragraph (2) of this subsection; or

assets acquired with the proceeds from the sale of the assets described in paragraph (2) of this subsection.

is the first recipient of the assets described in paragraph (2)(i) of this subsection after their recovery; and

is:

except as provided in item (ii) of this paragraph, “foreign earned income” means foreign earned income within the meaning of § 911(b)(1) of the Internal Revenue Code, subject to the limitation under § 911(b)(2) of the Internal Revenue Code; and

“foreign earned income” includes amounts paid by the United States or an agency of the United States to an employee of the United States or of an agency of the United States.

does not include any amount subtracted under any other provisions of this section; and

may not exceed $3,500 for any taxable year.

In this subsection the following words have the meanings indicated.

“Lost pay” means wages, salary, or other compensation attributable to services performed, or that would have been performed but for a claimed violation of law, as an employee, a former employee, or a prospective employee.

“Unlawful discrimination” has the meaning stated in § 62(e) of the Internal Revenue Code.

In this subsection the following words have the meanings indicated.

“Designated beneficiary” means a designated beneficiary as defined in § 18–19C–01 of the Education Article.

“Qualified disability expenses” has the meaning stated in § 18–19C–01 of the Education Article.

a refund under the Maryland ABLE Program; or

a distribution that is not used for the benefit of the designated beneficiary for qualified disability expenses.

In this subsection the following words have the meanings indicated.

“Law enforcement agency” has the meaning stated in § 3–201 of the Public Safety Article.

“Law enforcement officer” means an individual who:

“Maryland Police Training and Standards Commission” means the unit established under § 3–202 of the Public Safety Article.

$100,000 for an individual; or

$200,000 for a married couple filing a joint return or an individual described in § 2 of the Internal Revenue Code as a head of household or as a surviving spouse.

the International Olympic Committee;

the International Paralympic Committee;

the Special Olympics International Committee; or

the International Committee of Sports for the Deaf; and

the amount of gain recognized as a result of the direct or indirect transfer or conveyance of:

the amount of income recognized as a result of any expenditure of funds directly or indirectly by the State or Baltimore City with respect to the Pimlico site.

for which a person applied on or after March 5, 2020; and

that was provided to the person for the purpose of assisting with the economic hardships resulting from the coronavirus pandemic.

The Comptroller shall publish guidance to taxpayers regarding eligibility for the subtraction allowed under this subsection, including a list of grants and loans that are eligible for the subtraction.

Within 30 days after the effective date of Chapter 39 of the Acts of the General Assembly of 2021, or if created after the effective date of those Acts, within 30 days after creating a coronavirus relief payment program, a unit of State government or a local government shall provide to the Comptroller the name of the coronavirus relief payment programs administered by the unit or local government.

On request by the Comptroller, a unit of State government or a local government that administers a coronavirus relief payment program shall provide to the Comptroller, within 30 days of the date of the request and in the manner requested by the Comptroller, the following information:

In this subsection the following words have the meanings indicated.

“Correctional officer” means an individual who:

“Emergency services personnel” means emergency medical technicians or paramedics.

“Employee retirement system” has the meaning stated under § 10–209(a) of this subtitle.

“Public safety employee” means an individual who is a retired correctional officer, law enforcement officer, or fire, rescue, or emergency services personnel of the United States, the State, or a political subdivision of the State.

for a taxable year beginning after December 31, 2024, but before January 1, 2026, the first $15,000 of income described under paragraph (2) of this subsection;

for a taxable year beginning after December 31, 2025, but before January 1, 2027, the first $16,000 of income described under paragraph (2) of this subsection;

for a taxable year beginning after December 31, 2026, but before January 1, 2028, the first $17,000 of income described under paragraph (2) of this subsection;

for a taxable year beginning after December 31, 2027, but before January 1, 2029, the first $18,000 of income described under paragraph (2) of this subsection;

for a taxable year beginning after December 31, 2028, but before January 1, 2030, the first $19,000 of income described under paragraph (2) of this subsection; and

for a taxable year beginning after December 31, 2029, the first $20,000 of income described under paragraph (2) of this subsection.

of 20/200 or less in the better eye, with corrective glasses; or

of more than 20/200 if there is a field defect in which the peripheral field is limited so that the widest diameter of visual field subtends an angular distance no greater than 20 degrees on the better eye.

$1,000 of expenses that an employer incurs for a reader used in the course of a blind individual’s employment; and

to the extent that an expense is not allowed as a medical expense under § 213 of the Internal Revenue Code, $5,000 of the expenses that a blind individual incurs for personal use or use in employment.

“enhanced agricultural management equipment” means:

“enhanced agricultural management equipment” includes equipment that attaches to or is pulled by equipment listed in item (i) of this paragraph.

the equipment has a useful life of at least 4 years;

the taxpayer:

for liquid manure soil injection equipment, the equipment is:

the equipment has a useful life of at least 4 years; and

the taxpayer:

In this subsection the following words have the meanings indicated.

“Farm product” means a farm product, as defined in § 10–601 of the Agriculture Article, that:

“Gleaning cooperative” means a nonprofit organization that is:

“Wholesale market value” means the value of donated farm products based on the wholesale market price of the farm product in the nearest regional market during the calendar week in which the donation is made, determined without consideration of grade or quality of the product, as if the quantity of the product donated were marketable.

the wholesale market value, determined as of the date of the donation, of farm products donated by an individual during the taxable year to a gleaning cooperative; exceeds

the amount attributable to the donated farm products that the individual claims as a deduction for a charitable contribution under § 170 of the Internal Revenue Code.

a written statement from the gleaning cooperative that receives the farm products that certifies:

a written statement from the Maryland Department of Agriculture, using such market data as is deemed suitable by the Secretary of that Department, that certifies the wholesale market value of the donated farm products.

50% may be claimed in the taxable year in which the Department of Natural Resources issues an initial certificate of reforestation or timber stand improvement; and

50% may be claimed in the taxable year in which the Department of Natural Resources issues a final certificate of reforestation or timber stand improvement.

In this subsection the following words have the meanings indicated.

“Public safety organization” means:

“Public safety volunteer” means a member of a public safety organization.

is an active member of a public safety organization;

serves the public safety organization in a volunteer capacity without compensation, except nominal expenses or meals;

will have been an active member of a public safety organization for at least 36 months during the last 10 calendar years by December 31 of the taxable year.

Each police agency shall:

Each fire, rescue, or emergency medical services organization or auxiliary organization shall:

An individual may not qualify for the subtraction under this subsection based on membership in the United States Coast Guard Auxiliary, the Maryland Defense Force, or the Maryland Civil Air Patrol unless the United States Coast Guard Auxiliary, the Maryland Defense Force, or the Maryland Civil Air Patrol:

On or before October 1 each year, each bona fide Maryland police agency shall submit to the Department of Public Safety and Correctional Services and the Office of the Comptroller a report listing the names and Social Security numbers of individuals who qualified for the subtraction modification under this subsection for the preceding taxable year.

On or before October 1 of each year, the Maryland State Firefighters Association shall submit to the Department of Public Safety and Correctional Services and the Office of the Comptroller a report stating the participation in the point system by the various local subdivisions with the names and Social Security numbers of individuals who qualified for the subtraction modification under this subsection for the preceding taxable year.

A person may not knowingly make or cause any false statement or report to be made in any application or in any document required under this subsection.

Any person who violates or attempts to violate any provision of subparagraph (i) of this paragraph shall be subject to a fine of $1,000.

is required to file an income tax return for the taxable year; or

would have been required to file an income tax return for the taxable year if the parent had not elected the application of § 1(g)(7) of the Internal Revenue Code.

to a nonprofit volunteer fire company;

to an organization whose principal purpose is to provide medical, health, or nutritional care and to which a contribution is deductible under § 170 of the Internal Revenue Code; or

to provide assistance, other than transportation, to a handicapped individual, as defined under § 190 of the Internal Revenue Code, who is enrolled as a student in a community college of the State.

computed using the standard mileage rate allowed for unreimbursed automobile travel expenses under § 162 of the Internal Revenue Code; and

reduced by the amount of unreimbursed automobile travel expenses claimed as an itemized deduction for the same organization on the federal tax return under § 170 of the Internal Revenue Code.

In this subsection the following words have the meanings indicated.

“Account holder” has the meaning stated in § 18–1901 of the Education Article.

“Contributor” means an individual who contributes funds to a Maryland Senator Edward J. Kasemeyer Prepaid College Trust account under Title 18, Subtitle 19 of the Education Article.

“Qualified higher education expenses” has the meaning stated in § 529 of the Internal Revenue Code.

In this subsection the following words have the meanings indicated.

“Account holder” means an account holder as defined in § 18–19A–01 or § 18–19B–01 of the Education Article.

“Contributor” means an individual who contributes funds to a Maryland Senator Edward J. Kasemeyer College Investment Plan or Broker–Dealer College Investment Plan account under Title 18, Subtitle 19A or Subtitle 19B of the Education Article.

“Investment account” means an investment account as defined in § 18–19A–01 or § 18–19B–01 of the Education Article.

“Qualified designated beneficiary” means a qualified designated beneficiary as defined in § 18–19A–01 or § 18–19B–01 of the Education Article.

Except as provided in subparagraph (ii) of this paragraph and subject to the limitation under paragraph (3) of this subsection, the subtraction under subsection (a) of this section includes the amount contributed by an account holder or a contributor during the taxable year to an investment account.

The subtraction under subparagraph (i) of this paragraph may not be taken if the account holder received a State contribution under § 18–19A–04.1 of the Education Article during the taxable year.

Subject to paragraph (4) of this subsection, for each account holder or contributor for all investment accounts maintained in the Maryland Senator Edward J. Kasemeyer College Investment Plan and the Maryland Broker–Dealer College Investment Plan for the same qualified designated beneficiary, the subtraction under paragraph (2) of this subsection may not exceed $2,500 for any taxable year per qualified designated beneficiary.

For purposes of the limitation under this paragraph, each spouse on a joint return shall be treated separately.

In this subsection the following words have the meanings indicated.

“Nitrogen removal technology” has the meaning stated in § 9–1108 of the Environment Article.

“On–site sewage disposal system” has the meaning stated in § 9–1108 of the Environment Article.

In this subsection, “qualified conservation program expenses” means amounts expended by an individual during the taxable year related to an application for the Forest Conservation and Management Program within the Department of Natural Resources.

“Qualified conservation program expenses” includes the costs associated with hiring a professional land surveyor and the preparation of a land management program for the conserved property.

is paid by the taxpayer or the employer of the taxpayer to provide coverage for the taxpayer’s spouse; and

is subject to federal income tax under the Internal Revenue Code.

In this subsection the following words have the meanings indicated.

“Kinship parent” has the meaning stated in § 5–534 of the Family Law Article.

“Local department” means a department of social services in a county or the Montgomery County Department of Health and Human Services.

The subtraction allowed under paragraph (2) of this subsection includes only an expense that the local department approves as necessary.

The subtraction under paragraph (2) of this subsection may not include an expense for which the foster parent receives an allowance or a reimbursement from any public or private agency.

In this subsection the following words have the meanings indicated.

“ABLE account contributor” means an individual who contributes money to an ABLE account as defined in § 18–19C–01 of the Education Article.

“Designated beneficiary” means a designated beneficiary as defined in § 18–19C–01 of the Education Article.

“Qualified disability expenses” has the meaning stated in § 18–19C–01 of the Education Article.

Subject to paragraph (4) of this subsection, for each ABLE account contributor under the Maryland ABLE Program, the subtraction under paragraph (2) of this subsection may not exceed $2,500 for any taxable year per qualified designated beneficiary.

For purposes of the limitation under this paragraph, each spouse on a joint return shall be treated separately.

In this subsection the following words have the meanings indicated.

“Organ” means all or part of an individual’s liver, kidney, pancreas, intestine, lung, or bone marrow.

“Qualified expenses” means any unreimbursed travel expenses, lodging expenses, child or elder care expenses, medication expenses, or lost wages.

a kindergarten through grade 12 classroom teacher in an elementary or secondary school in the State.

students in the classroom; or

the eligible teacher to prepare for or during classroom teaching.

In this subsection the following words have the meanings indicated.

“Diaper bank” means a nonprofit organization located in the State that:

“Donation” means an irrevocable gift of:

“Feminine personal hygiene products” means sanitary pads, tampons, menstrual sponges, menstrual cups, or other similar feminine hygiene products, whether reusable or disposable.

“Qualified charitable entity” means a diaper bank, homeless shelter, domestic violence shelter, religious organization, or other charitable organization that has registered with the Comptroller as a distributor of disposable diapers, other hygiene products for infants or children, or feminine personal hygiene products.

the name of each qualified charitable entity to which a donation was made;

proof of the value of the donation; and

any other information that the Comptroller requires.

In this subsection the following words have the meanings indicated.

“Account holder” means a first–time homebuyer who establishes a first–time homebuyer savings account.

“Allowable closing costs” means a disbursement listed on a settlement statement for the purchase of a home in the State by an account holder.

“Eligible costs” means the down payment and allowable closing costs for the purchase of a home in the State by an account holder.

“Financial institution” has the meaning stated in § 1–101 of the Financial Institutions Article.

“First–time homebuyer” means an individual who is a resident of the State and who has not owned or purchased, either individually or jointly, a home in the State in the last 7 years.

“First–time homebuyer savings account” or “account” means an account with a financial institution that an account holder designates as a first–time homebuyer savings account on the account holder’s Maryland income tax return for taxable year 2021 or any following taxable year and that is established for the sole purpose of paying or reimbursing eligible costs for the purchase of a home in the State by the account holder.

“Home” means a single–family residential real property, including a mobile home as defined in § 8A–101 of the Real Property Article.

“Settlement statement” means the statement of receipts and disbursements for a transaction related to real estate, including a statement prescribed under the Real Estate Settlement Procedures Act of 1974, 12 U.S.C. § 2601 et seq., as amended, and associated regulations.

Except as otherwise provided in this subsection and subject to the limitations under this paragraph, the subtraction under subsection (a) of this section includes:

An account holder may claim a subtraction under this subsection:

An individual may jointly establish an account with another person if the joint account holders are both first–time homebuyers and file a joint income tax return.

An individual may not be the account holder of more than one account.

The account holder shall use the funds in the account for eligible costs related to the purchase of a home within 15 years following the date on which the account was established.

may not be held responsible for the use or application of funds deposited in or withdrawn from the account; and

may use funds held in the account for paying the expenses of administering the account.

Except as authorized under paragraph (6) of this subsection or as provided in subparagraph (ii) of this paragraph, if the account holder withdraws any funds from the account for a purpose other than eligible costs for the purchase of a home:

A disbursement of any assets of a first–time homebuyer savings account under a filing by an account holder for protection under the United States Bankruptcy Code, 11 U.S.C. §§ 101 through 1330, may not subject the account holder to tax liability.

submit to the Comptroller detailed information regarding the first–time homebuyer savings account with the account holder’s income tax return, including a list of transactions for the account during the taxable year; and

on a withdrawal of funds from the account, submit to the Comptroller a detailed account of the eligible costs toward which the account funds were applied and a statement of the amount of funds remaining in the account, if any.

The financial institution shall provide to each account holder, in the manner specified by the Department of Housing and Community Development, information about homebuyer education and housing counseling programs and services provided by nonprofit and government organizations certified by the U.S. Department of Housing and Urban Development that are available to residents of the State.

The Department of Housing and Community Development shall provide and maintain the information required under subparagraph (i) of this paragraph.

established and maintained by an employer for the benefit of its employees; and

qualified under § 401(a), § 403, or § 457(b) of the Internal Revenue Code; and

an individual retirement account or annuity under § 408 of the Internal Revenue Code;

a Roth individual retirement account under § 408A of the Internal Revenue Code;

a rollover individual retirement account;

a simplified employee pension under Internal Revenue Code § 408(k); or

an ineligible deferred compensation plan under § 457(f) of the Internal Revenue Code.

a business that is wholly carried on in the State and in which the individual is a partner, shareholder of an S corporation, member of a limited liability company as defined under Title 4A of the Corporations and Associations Article, but only to the extent the company is taxable as a partnership under § 761 of the Internal Revenue Code, or proprietor; or

an occupation, profession, or trade that is wholly carried on in the State;

a business that is carried on both in and out of the State and of which the individual is a partner, shareholder of an S corporation, member of a limited liability company as defined under Title 4A of the Corporations and Associations Article, but only to the extent the company is taxable as a partnership under § 761 of the Internal Revenue Code, or proprietor; or

an occupation, profession, or trade that is carried on both in and out of the State; and

is manufactured primarily for use on public streets, roads, and highways;

is rated at more than 6,000 but not more than 14,000 pounds gross vehicle weight; and

would be a passenger automobile as defined in § 280F of the Internal Revenue Code if it were rated at 6,000 pounds gross vehicle weight or less.

“Manufacturing entity” means a person conducting or operating a trade or business that is primarily engaged in activities that, in accordance with the North American Industrial Classification System (NAICS), United States Manual, United States Office of Management and Budget, 2012 Edition, would be included in Sector 31, 32, or 33.

“Manufacturing entity” does not include a refiner, as defined in § 10–101 of the Business Regulation Article.

except as provided in item (ii) of this item, an amount is added to or subtracted from federal adjusted gross income to reflect the determination of the depreciation deduction provided under § 167(a) of the Internal Revenue Code and the adjusted basis of property without regard to the additional allowance under § 168(k) of the Internal Revenue Code; and

for a manufacturing entity, an amount is added to or subtracted from federal adjusted gross income to reflect the determination of the depreciation deduction provided under § 167(a) of the Internal Revenue Code and the adjusted basis of property by limiting the additional allowance under § 168(k) of the Internal Revenue Code to 20% of the adjusted basis of the qualified property;

except as provided in item (ii) of this item, an amount is added to or subtracted from federal adjusted gross income to reflect the determination of the maximum aggregate costs that the taxpayer may treat as an expense under § 179 of the Internal Revenue Code for any taxable year without regard to any changes made to that section after December 31, 2002:

item (i) of this item does not apply to property that is placed in service by a manufacturing entity on or after January 1, 2019;

a joint return is not made by the taxpayer and the spouse; and

the spouse, for the calendar year in which the taxable year of the taxpayer begins, has no gross income and is not a dependent of another taxpayer; and

$1,600 if federal adjusted gross income for the taxable year does not exceed $125,000;

$800 if federal adjusted gross income for the taxable year is greater than $125,000 but not greater than $150,000; and

$0 if federal adjusted gross income for the taxable year is greater than $150,000.

$1,600 if federal adjusted gross income for the taxable year does not exceed $175,000;

$800 if federal adjusted gross income for the taxable year is greater than $175,000 but not greater than $200,000; and

$0 if federal adjusted gross income for the taxable year is greater than $200,000.