<section article="gtg" article_name="Tax - General" number="10-101" title_number="10" title_name="Income Tax" subtitle_number="1" subtitle_name="Definitions; General Provisions"> <level label="a"> <text>In this title the following words have the meanings indicated.</text> </level> <level label="a–1"> <text>“Active duty” has the meaning stated in § 9–901 of the State Government Article.</text> </level> <level label="b"> <text>“Applicable tax base” means the portion of the income of an investment conduit or a special exempt entity on which a tax is imposed under:</text> <level label="1"> <text>§ 11, § 527(b), § 528(b), § 852(b)(1), § 857(b)(1) or (4)(a), or § 860G(c)(1) of the Internal Revenue Code; or</text> </level> <level label="2"> <text>any other section of the Internal Revenue Code that the Comptroller determines by regulation to impose an entity level income tax on an entity that the Comptroller determines to be:</text> <level label="i"> <text>an investment conduit under subsection (h)(2) of this section; or</text> </level> <level label="ii"> <text>a special exempt entity under subsection (m)(2) of this section.</text> </level> </level> </level> <level label="c"> <text>“Corporation” includes an association or joint–stock company.</text> </level> <level label="d"> <text>“County income tax” means the county tax on income authorized in § 10–103 of this subtitle.</text> </level> <level label="e"> <text>“Federal adjusted gross income” means:</text> <level label="1"> <text>for an individual other than a fiduciary, the individual’s adjusted gross income as determined under the Internal Revenue Code;</text> </level> <level label="2"> <text>for a fiduciary other than one described in item (3) of this subsection, the fiduciary’s taxable income, as determined under the Internal Revenue Code, increased by the amount allowed to the fiduciary as a deduction for a personal exemption under § 642(b) of the Internal Revenue Code; or</text> </level> <level label="3"> <text>for a fiduciary exempt from taxation under § 408(e)(1) or § 501 of the Internal Revenue Code, the fiduciary’s unrelated business taxable income as defined under § 512 of the Internal Revenue Code.</text> </level> </level> <level label="f"> <level label="1"> <text>“Fiduciary” means a person holding the legal title to property for the use and benefit of another person.</text> </level> <level label="2"> <text>“Fiduciary” does not include:</text> <level label="i"> <text>an agent holding custody or possession of property that the principal of the agent owns; or</text> </level> <level label="ii"> <text>a guardian, as defined in § 13–101 of the Estates and Trusts Article.</text> </level> </level> </level> <level label="g"> <text>“Individual” means, unless expressly provided otherwise, a natural person or a fiduciary.</text> </level> <level label="h"> <text>“Investment conduit” means:</text> <level label="1"> <text>any of the following entities described in the Internal Revenue Code:</text> <level label="i"> <text>a regulated investment company;</text> </level> <level label="ii"> <text>a real estate investment trust; or</text> </level> <level label="iii"> <text>a real estate mortgage investment conduit; or</text> </level> </level> <level label="2"> <text>any other entity that the Comptroller determines by regulation to enjoy a status under the Internal Revenue Code pursuant to which the entity is not generally subject to income tax at the entity level so long as substantially all of its profits are distributed to the holders of equity interests in the entity.</text> </level> </level> <level label="i"> <text>“Maryland taxable income” means:</text> <level label="1"> <text>for an individual, Maryland adjusted gross income, less the exemptions and deductions allowed under this title; and</text> </level> <level label="2"> <text>for a corporation, Maryland modified income as allocated under this title.</text> </level> </level> <level label="j"> <text>“Nonresident” means an individual who is not a resident.</text> </level> <level label="k"> <level label="1"> <text>“Resident” means:</text> <level label="i"> <text>an individual, other than a fiduciary, who:</text> <level label="1"> <text>is domiciled in this State on the last day of the taxable year; or</text> </level> <level label="2"> <text>for more than 6 months of the taxable year, maintained a place of abode in this State, whether domiciled in this State or not;</text> </level> </level> <level label="ii"> <text>a personal representative of an estate if the decedent was domiciled in this State on the date of the decedent’s death; or</text> </level> <level label="iii"> <text>a fiduciary, other than a personal representative, of a trust if:</text> <level label="1"> <text>the trust was created, or consists of property transferred, by the will of a decedent who was domiciled in the State on the date of the decedent’s death;</text> </level> <level label="2"> <text>the creator or grantor of the trust is a current resident of the State; or</text> </level> <level label="3"> <text>the trust is principally administered in the State.</text> </level> </level> </level> <level label="2"> <text>“Resident” includes, for the part of the taxable year that an individual resides in this State, an individual who:</text> <level label="i"> <text>moves to this State with the intent to be domiciled in this State; or</text> </level> <level label="ii"> <text>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.</text> </level> </level> <level label="3"> <text>If an individual under paragraph (2)(ii) of this subsection again resides in this State within 6 months after having moved outside this State, there is a rebuttable presumption that the individual did not have a bona fide intention to remain permanently outside this State.</text> </level> </level> <level label="l"> <text>“S corporation” means a corporation that elects to be taxed as a small business corporation under Subchapter S of the Internal Revenue Code.</text> </level> <level label="m"> <text>“Special exempt entity” means:</text> <level label="1"> <text>any of the following entities described in the Internal Revenue Code:</text> <level label="i"> <text>a farmers’ cooperative;</text> </level> <level label="ii"> <text>a political organization; or</text> </level> <level label="iii"> <text>a homeowners association; or</text> </level> </level> <level label="2"> <text>any other entity not described in § 10–104(2) of this subtitle that the Comptroller determines by regulation to be exempt from federal income tax on all or some part of its income.</text> </level> </level> <level label="n"> <text>“State income tax” means the State tax on income imposed under this title.</text> </level> <level label="o"> <level label="1"> <text>“Taxable year” means:</text> <level label="i"> <text>the period for which Maryland taxable income is computed under this title; and</text> </level> <level label="ii"> <text>the annual accounting period defined in § 441 of the Internal Revenue Code.</text> </level> </level> <level label="2"> <text>“Taxable year” includes:</text> <level label="i"> <text>a calendar year ending on December 31, as defined in § 441 of the Internal Revenue Code;</text> </level> <level label="ii"> <text>a fiscal year ending on the last day of a month other than December, as defined in § 441 of the Internal Revenue Code;</text> </level> <level label="iii"> <text>if a return is made for a period of less than 1 year, the period for which the return is made; or</text> </level> <level label="iv"> <text>if an election is made under § 441(f) of the Internal Revenue Code, the period for which a return is made.</text> </level> </level> </level> </section> <section article="gtg" article_name="Tax - General" number="10-102" title_number="10" title_name="Income Tax" subtitle_number="1" subtitle_name="Definitions; General Provisions"> <text>Except as provided in § 10-104 of this subtitle, a tax is imposed on the Maryland taxable income of each individual and of each corporation.</text> </section> <section article="gtg" article_name="Tax - General" number="10-102.1" title_number="10" title_name="Income Tax" subtitle_number="1" subtitle_name="Definitions; General Provisions"> <level label="a"> <level label="1"> <text>In this section the following words have the meanings indicated.</text> </level> <level label="2"> <text>“Distributable cash flow” means taxable income reportable by a pass–through entity on its federal income tax return for the taxable year:</text> <level label="i"> <text>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;</text> </level> <level label="ii"> <text>increased by the sum of:</text> <level label="1"> <text>cash receipts for the taxable year that are not includable in the gross income of the entity, including capital contributions and loan proceeds;</text> </level> <level label="2"> <text>amounts allowable to the entity for the taxable year as deductions for depreciation, amortization, and depletion; and</text> </level> <level label="3"> <text>the decrease, if any, in the entity’s liability reserve as of the end of the taxable year; and</text> </level> </level> <level label="iii"> <text>decreased by the sum of:</text> <level label="1"> <text>cash expenditures for the taxable year that are not deductible in computing the taxable income of the entity, not including distributions to shareholders, partners, or members; and</text> </level> <level label="2"> <text>the increase, if any, in the entity’s liability reserve as of the end of the taxable year.</text> </level> </level> </level> <level label="3"> <text>“Liability reserve” means accrued unpaid liabilities that are not deductible in computing taxable income.</text> </level> <level label="4"> <text>“Member” means:</text> <level label="i"> <text>a shareholder of an S corporation;</text> </level> <level label="ii"> <text>a general or limited partner of a partnership, limited partnership, or limited liability partnership;</text> </level> <level label="iii"> <text>a member of a limited liability company; or</text> </level> <level label="iv"> <text>a beneficiary of a business trust or statutory trust.</text> </level> </level> <level label="5"> <text>“Nonresident entity” means an entity that is not formed under the laws of the State and is not qualified by or registered with the Department of Assessments and Taxation to do business in the State.</text> </level> <level label="6"> <text>“Nonresident taxable income” means any income described in § 10–210(b)(1) through (4) of this title.</text> </level> <level label="7"> <text>“Pass–through entity” means:</text> <level label="i"> <text>an S corporation;</text> </level> <level label="ii"> <text>a partnership;</text> </level> <level label="iii"> <text>a limited liability company that is not taxed as a corporation under this title; or</text> </level> <level label="iv"> <text>a business trust or statutory trust that is not taxed as a corporation under this title.</text> </level> </level> <level label="8"> <text>“Pass–through entity’s taxable income” means the portion of a pass–through entity’s income under the federal Internal Revenue Code, calculated without regard to any deduction for taxes based on net income that are imposed by any state or political subdivision of a state, that is:</text> <level label="i"> <text>in the case of a member who is a resident:</text> <level label="1"> <text>except as provided under item 2 of this item, equal to the member’s distributive or pro rata shares of the pass–through entity; or</text> </level> <level label="2"> <text>on election by a pass–through entity in accordance with subsection (d)(4) of this section, derived from or reasonably attributable to the trade or business of the pass–through entity in the State; or</text> </level> </level> <level label="ii"> <text>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.</text> </level> </level> </level> <level label="b"> <level label="1"> <text>Subject to paragraph (2) of this subsection, in addition to any other tax imposed under this title, a tax is imposed on each pass–through entity.</text> </level> <level label="2"> <text>Each pass–through entity:</text> <level label="i"> <text>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</text> </level> <level label="ii"> <text>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.</text> </level> </level> </level> <level label="c"> <level label="1"> <text>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 tax shall be treated as a tax imposed on the nonresident or nonresident entity members that is paid on behalf of the nonresidents or nonresident entities by the pass–through entity.</text> </level> <level label="2"> <text>The Comptroller shall provide by regulation for the treatment of the tax imposed under subsection (b) of this section that is paid on behalf of a nonresident entity member that is itself a pass–through entity.</text> </level> <level label="3"> <text>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 tax shall be treated as a tax imposed on the pass–through entity itself.</text> </level> </level> <level label="d"> <level label="1"> <text>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 tax imposed is the sum of:</text> <level label="i"> <text>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</text> </level> <level label="ii"> <text>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.</text> </level> </level> <level label="2"> <text>Except as provided in paragraph (4) of this subsection, 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 shall calculate pass–through entity taxable income for resident members in accordance with subsection (a)(8)(i)1 of this section.</text> </level> <level label="3"> <text>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 and calculates pass–through entity taxable income for resident members in accordance with subsection (a)(8)(i)1 of this section, the tax imposed is the sum of:</text> <level label="i"> <text>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</text> </level> <level label="ii"> <text>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.</text> </level> </level> <level label="4"> <text>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 may elect to calculate pass–through entity taxable income for resident members in accordance with subsection (a)(8)(i)2 of this section.</text> </level> <level label="5"> <text>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 and elects to calculate pass–through entity taxable income for resident members in accordance with subsection (a)(8)(i)2 of this section, the tax imposed is the sum of:</text> <level label="i"> <text>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;</text> </level> <level label="ii"> <text>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;</text> </level> <level label="iii"> <text>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</text> </level> <level label="iv"> <text>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.</text> </level> </level> <level label="6"> <level label="i"> <text>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.</text> </level> <level label="ii"> <text>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.</text> </level> </level> <level label="7"> <text>The tax required to be paid for any taxable year by a pass–through entity may not exceed:</text> <level label="i"> <text>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</text> </level> <level label="ii"> <text>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.</text> </level> </level> </level> <level label="e"> <text>In accordance with § 10–701.1 of this title, each member may claim a credit against the tax imposed on the member for the member’s proportionate share of the tax paid by the pass–through entity under subsection (b) of this section.</text> </level> <level label="f"> <level label="1"> <level label="i"> <text>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.</text> </level> <level label="ii"> <text>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.</text> </level> </level> <level label="2"> <text>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 direct or indirect distributive share or pro rata share of a member that is:</text> <level label="i"> <text>a real estate investment trust as defined by § 856 of the Internal Revenue Code; or</text> </level> <level label="ii"> <text>an entity that is exempt from taxation under § 501 of the Internal Revenue Code.</text> </level> </level> </level> <level label="g"> <text>The Comptroller may provide by regulation for:</text> <level label="1"> <text>the filing of composite returns by a pass–through entity on behalf of its nonresident and nonresident entity members; and</text> </level> <level label="2"> <text>application of or exemption from the tax imposed under subsection (b) of this section for a pass–through entity:</text> <level label="i"> <text>that files a composite return on behalf of nonresident and nonresident entity members; or</text> </level> <level label="ii"> <text>the entity members of which are tax exempt.</text> </level> </level> </level> <level label="h"> <level label="1"> <text>Subject to paragraph (2) of this subsection, if a partnership fails to pay the tax when due, the tax may be collected from the partners under the law applicable to debts of the partnership, with the partnership and partners having rights of contribution against any partner on whose behalf the tax is paid.</text> </level> <level label="2"> <text>Unless it is established by the Comptroller that the partner participated in a pattern of distributions to one or more partners with the intention of defeating the partnership liability for the tax imposed under subsection (b) of this section, any partner otherwise liable under paragraph (1) of this subsection shall be liable for the tax imposed on the partnership only to the extent of distributions from the partnership to that partner after the tax was due to be paid by the partnership.</text> </level> </level> <level label="i"> <text>Except as provided in § 10–701.1 of this title, nothing in this section limits or affects in any way the liability of an individual nonresident member or a nonresident entity member for the tax imposed on the individual nonresident or nonresident entity under § 10–102 of this subtitle.</text> </level> <level label="j"> <text>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 to a publicly traded pass–through entity that has agreed to file with the Comptroller an annual information return reporting the name, address, taxpayer identification number, and other information requested by the Comptroller of each nonresident or nonresident entity member whose distributive share or pro rata share of the pass–through entity’s nonresident taxable income for the taxable year exceeds $500.</text> </level> </section> <section article="gtg" article_name="Tax - General" number="10-103" title_number="10" title_name="Income Tax" subtitle_number="1" subtitle_name="Definitions; General Provisions"> <level label="a"> <text>Each county shall have a county income tax on the Maryland taxable income of:</text> <level label="1"> <text>each resident, other than a fiduciary, who on the last day of the taxable year:</text> <level label="i"> <text>is domiciled in the county; or</text> </level> <level label="ii"> <text>maintains a principal residence or a place of abode in the county;</text> </level> </level> <level label="2"> <text>each personal representative of an estate if the decedent was domiciled in the county on the date of the decedent’s death;</text> </level> <level label="3"> <text>each resident fiduciary of:</text> <level label="i"> <text>a trust that is principally administered in the county; or</text> </level> <level label="ii"> <text>a trust that is otherwise principally connected to the county and is not principally administered in the State; and</text> </level> </level> <level label="4"> <text>except as provided in § 10-806(c) of this title, a nonresident who derives income from salary, wages, or other compensation for personal services for employment in the county.</text> </level> </level> <level label="b"> <text>Except for the county income tax, a county, municipal corporation, special taxing district, or other political subdivision may not impose a general local income, earnings, or payroll tax, a general occupational license tax, or a general license or permit tax based on income, earnings, or gross receipts.</text> </level> </section> <section article="gtg" article_name="Tax - General" number="10-104" title_number="10" title_name="Income Tax" subtitle_number="1" subtitle_name="Definitions; General Provisions"> <text>The income tax does not apply to the income of:</text> <level label="1"> <text>a common trust fund, as defined in § 3–501(b) of the Financial Institutions Article;</text> </level> <level label="2"> <text>except as provided in §§ 10–101(e)(3) of this subtitle and 10–304(2) of this title, an organization that is exempt from taxation under § 408(e)(1) or § 501 of the Internal Revenue Code;</text> </level> <level label="3"> <text>a financial institution that is subject to the financial institution franchise tax;</text> </level> <level label="4"> <text>a person subject to taxation under Title 6 of the Insurance Article;</text> </level> <level label="5"> <text>except as provided in § 10–102.1 of this subtitle, a partnership, as defined in § 761 of the Internal Revenue Code;</text> </level> <level label="6"> <text>except as provided in § 10–102.1 of this subtitle and § 10–304(3) of this title, an S corporation;</text> </level> <level label="7"> <text>except as provided in § 10–304(4) of this title, an investment conduit or a special exempt entity; or</text> </level> <level label="8"> <text>except as provided in § 10–102.1 of this subtitle, a limited liability company as defined under Title 4A of the Corporations and Associations Article to the extent that the company is taxable as a partnership, as defined in § 761 of the Internal Revenue Code.</text> </level> </section> <section article="gtg" article_name="Tax - General" number="10-105" title_number="10" title_name="Income Tax" subtitle_number="1" subtitle_name="Definitions; General Provisions"> <level label="a"> <level label="1"> <text>For an individual other than an individual described in paragraph (2) of this subsection, the State income tax rate is:</text> <level label="i"> <text>2% of Maryland taxable income of $1 through $1,000;</text> </level> <level label="ii"> <text>3% of Maryland taxable income of $1,001 through $2,000;</text> </level> <level label="iii"> <text>4% of Maryland taxable income of $2,001 through $3,000;</text> </level> <level label="iv"> <level label="4"> <text>75% of Maryland taxable income of $3,001 through $100,000;</text> </level> </level> <level label="v"> <text>5% of Maryland taxable income of $100,001 through $125,000;</text> </level> <level label="vi"> <level label="5"> <text>25% of Maryland taxable income of $125,001 through $150,000;</text> </level> </level> <level label="vii"> <level label="5"> <text>5% of Maryland taxable income of $150,001 through $250,000;</text> </level> </level> <level label="viii"> <level label="5"> <text>75% of Maryland taxable income of $250,001 through $500,000;</text> </level> </level> <level label="ix"> <level label="6"> <text>25% of Maryland taxable income of $500,001 through $1,000,000; and</text> </level> </level> <level label="x"> <level label="6"> <text>50% of Maryland taxable income in excess of $1,000,000.</text> </level> </level> </level> <level label="2"> <text>For spouses filing a joint return or for a surviving spouse or head of household as defined in § 2 of the Internal Revenue Code, the State income tax rate is:</text> <level label="i"> <text>2% of Maryland taxable income of $1 through $1,000;</text> </level> <level label="ii"> <text>3% of Maryland taxable income of $1,001 through $2,000;</text> </level> <level label="iii"> <text>4% of Maryland taxable income of $2,001 through $3,000;</text> </level> <level label="iv"> <level label="4"> <text>75% of Maryland taxable income of $3,001 through $150,000;</text> </level> </level> <level label="v"> <text>5% of Maryland taxable income of $150,001 through $175,000;</text> </level> <level label="vi"> <level label="5"> <text>25% of Maryland taxable income of $175,001 through $225,000;</text> </level> </level> <level label="vii"> <level label="5"> <text>5% of Maryland taxable income of $225,001 through $300,000;</text> </level> </level> <level label="viii"> <level label="5"> <text>75% of Maryland taxable income of $300,001 through $600,000;</text> </level> </level> <level label="ix"> <level label="6"> <text>25% of Maryland taxable income of $600,001 through $1,200,000; and</text> </level> </level> <level label="x"> <level label="6"> <text>50% of Maryland taxable income in excess of $1,200,000.</text> </level> </level> </level> <level label="3"> <level label="i"> <text>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:</text> <level label="1"> <text>the rates specified in paragraph (1) or (2) of this subsection applied to Maryland taxable income; and</text> </level> <level label="2"> <text>an additional 2% of the amount of net capital gain included in the individual’s Maryland adjusted gross income.</text> </level> </level> <level label="ii"> <text>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:</text> <level label="1"> <text>any residential dwelling sold for less than $1,500,000 that is the individual’s primary residence, including the land on which the dwelling is located and any accessory dwelling unit associated with the residence, if the dwelling is a single–family home, a town house, a row home, a residential condominium unit, or a residential cooperative unit;</text> </level> <level label="2"> <text>assets held in:</text> </level> <level label="A"> <text>a cash or deferred arrangement plan under § 401(k) of the Internal Revenue Code;</text> </level> <level label="B"> <text>a tax–sheltered annuity or custodial account under § 403(b) of the Internal Revenue Code;</text> </level> <level label="C"> <text>a deferred compensation plan under § 457(b) of the Internal Revenue Code;</text> </level> <level label="D"> <text>an individual retirement account or individual retirement annuity under § 408 of the Internal Revenue Code;</text> </level> <level label="E"> <text>a Roth individual retirement account under § 408A of the Internal Revenue Code; or</text> </level> <level label="F"> <text>a defined contribution plan, a defined benefit plan, or a similar retirement savings plan;</text> </level> <level label="3"> <text>cattle, horses, or breeding livestock held for more than 12 months if, for the taxable year of the sale or exchange, more than 50% of the individual’s gross income for the taxable year, including income from the sale or exchange of capital assets, is from farming or ranching;</text> </level> <level label="4"> <text>land that is subject to a conservation, agricultural, or forest preservation easement or that will be subject to a conservation, agricultural, or forest preservation easement on the sale or exchange of the land;</text> </level> <level label="5"> <text>property used in a trade or business, the cost of which is deductible under § 179 of the Internal Revenue Code; or</text> </level> <level label="6"> <text>affordable housing owned by a nonprofit organization.</text> </level> </level> </level> <level label="4"> <text>The provisions of paragraph (3) of this subsection shall apply for individuals described in paragraph (1) or (2) of this subsection with a federal adjusted gross income in excess of $350,000.</text> </level> </level> <level label="b"> <text>The State income tax rate for a corporation is 8.25% of Maryland taxable income.</text> </level> <level label="c"> <text>For a married couple filing a joint income tax return, the rates specified in subsection (a) of this section apply to the joint Maryland taxable income of the married couple.</text> </level> <level label="d"> <text>For a nonresident:</text> <level label="1"> <text>the rates specified in subsection (a) of this section apply to the nonresident’s Maryland taxable income, calculated without regard to the subtractions under § 10–210(b), (e), and (f) of this title; and</text> </level> <level label="2"> <text>the State income tax imposed equals the result obtained under item (1) of this subsection multiplied times a fraction:</text> <level label="i"> <text>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</text> </level> <level label="ii"> <text>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.</text> </level> </level> </level> </section> <section article="gtg" article_name="Tax - General" number="10-106" title_number="10" title_name="Income Tax" subtitle_number="1" subtitle_name="Definitions; General Provisions"> <level label="a"> <level label="1"> <text>Each county shall set, by ordinance or resolution, a county income tax equal to at least 2.25% but not more than 3.30% of an individual’s Maryland taxable income for a taxable year beginning after December 31, 2001.</text> </level> <level label="2"> <text>A county income tax rate continues until the county changes the rate by ordinance or resolution.</text> </level> <level label="3"> <level label="i"> <text>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.</text> </level> <level label="ii"> <text>The county shall publish at least once each week for 2 successive weeks in a newspaper of general circulation in the county:</text> <level label="1"> <text>notice of the public hearing; and</text> </level> <level label="2"> <text>a fair summary of the proposed act, ordinance, or resolution to increase the county income tax rate above 2.6%.</text> </level> </level> </level> <level label="4"> <text>Notwithstanding paragraph (1) or (2) of this subsection, in Howard County, the county income tax rate may be changed only by ordinance and not by resolution.</text> </level> </level> <level label="b"> <text>If a county changes its county income tax rate, the county shall:</text> <level label="1"> <text>increase or decrease the rate in increments of one one–hundredth of a percentage point, effective on January 1 of the year that the county designates; and</text> </level> <level label="2"> <text>give the Comptroller notice of the rate or income bracket change and the effective date of the rate or income bracket change on or before July 1 prior to its effective date.</text> </level> </level> <level label="c"> <level label="1"> <text>For any county income tax rate that is effective on or after January 1, 2022, the county may apply the county income tax on a bracket basis.</text> </level> <level label="2"> <text>A county that imposes the county income tax on a bracket basis:</text> <level label="i"> <text>shall set, by ordinance or resolution, the income brackets that apply to each income tax rate;</text> </level> <level label="ii"> <text>may set income brackets that differ from the income brackets to which the State income tax applies;</text> </level> <level label="iii"> <text>may not set a minimum income tax rate less than 2.25% of an individual’s Maryland taxable income; and</text> </level> <level label="iv"> <text>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.</text> </level> </level> <level label="3"> <text>A county may request information from the Comptroller to assist the county in determining income brackets and applicable income tax rates that are revenue–neutral for the county.</text> </level> </level> </section> <section article="gtg" article_name="Tax - General" number="10-106.1" title_number="10" title_name="Income Tax" subtitle_number="1" subtitle_name="Definitions; General Provisions"> <level label="a"> <text>An individual subject to the State income tax under § 10-105(a) of this subtitle, but not subject to the county income tax under § 10-106 of this subtitle, shall be subject to the tax imposed under this section.</text> </level> <level label="b"> <text>The rate of the tax imposed under this section shall be equal to the lowest county income tax rate set by any Maryland county in accordance with § 10-106 of this subtitle.</text> </level> <level label="c"> <text>The tax imposed under this section shall be distributed by the Comptroller in accordance with § 2-609 of this article.</text> </level> </section> <section article="gtg" article_name="Tax - General" number="10-107" title_number="10" title_name="Income Tax" subtitle_number="1" subtitle_name="Definitions; General Provisions"> <text>To the extent practicable, the Comptroller shall apply the administrative and judicial interpretations of the federal income tax law to the administration of the income tax laws of this State.</text> </section> <section article="gtg" article_name="Tax - General" number="10-108" title_number="10" title_name="Income Tax" subtitle_number="1" subtitle_name="Definitions; General Provisions"> <level label="a"> <text>Except as provided in subsection (c) of this section and unless expressly provided otherwise by law, an amendment of the Internal Revenue Code that affects the determination of federal adjusted gross income or federal taxable income, does not affect the determination of Maryland taxable income under this title for:</text> <level label="1"> <text>any taxable year that begins in the calendar year in which the amendment is enacted; or</text> </level> <level label="2"> <text>any taxable year that precedes the calendar year in which the amendment is enacted.</text> </level> </level> <level label="b"> <text>Within 60 days after an amendment of the Internal Revenue Code is enacted, the Comptroller shall prepare and submit to the Governor and, subject to § 2–1257 of the State Government Article, the President of the Senate and the Speaker of the House a report that outlines:</text> <level label="1"> <text>the changes in the Internal Revenue Code; and</text> </level> <level label="2"> <text>the impact of those changes on State revenue and on various classes and types of taxpayers.</text> </level> </level> <level label="c"> <text>Subsection (a) of this section does not apply to an amendment of the Internal Revenue Code if the Comptroller determines that the impact of the amendment on State income tax revenue is less than $5,000,000 for:</text> <level label="1"> <text>the fiscal year that begins during the calendar year in which the amendment is enacted; or</text> </level> <level label="2"> <text>any fiscal year that precedes the calendar year in which the amendment is enacted.</text> </level> </level> </section> <section article="gtg" article_name="Tax - General" number="10-109" title_number="10" title_name="Income Tax" subtitle_number="1" subtitle_name="Definitions; General Provisions"> <level label="a"> <text>The Comptroller may distribute, apportion, or allocate gross income, deductions, credits, or allowances between and among two or more organizations, trades, or businesses, whether or not incorporated, whether or not organized in the United States, and whether or not affiliated, if:</text> <level label="1"> <text>the organizations, trades, or businesses are owned or controlled directly or indirectly by the same interests within the meaning of § 482 of the Internal Revenue Code; and</text> </level> <level label="2"> <text>the Comptroller determines that the distribution, apportionment, or allocation is necessary in order to reflect an arm’s length standard within the meaning of § 1.482-1 of the Regulations of the Internal Revenue Service of the U.S. Treasury and to reflect clearly the income of those organizations, trades, or businesses.</text> </level> </level> <level label="b"> <text>The Comptroller shall apply the administrative and judicial interpretations of § 482 of the Internal Revenue Code in administering this section.</text> </level> </section> <section article="gtg" article_name="Tax - General" number="10-201" title_number="10" title_name="Income Tax" subtitle_number="2" subtitle_name="Maryland Taxable Income Calculations for Individual"> <text>An individual shall calculate Maryland taxable income by subtracting from the individual’s Maryland adjusted gross income calculated under Part II of this subtitle an amount that equals:</text> <level label="1"> <text>the exemptions allowed under Part III of this subtitle; and</text> </level> <level label="2"> <text>the deductions allowed under Part IV of this subtitle.</text> </level> </section> <section article="gtg" article_name="Tax - General" number="10-203" title_number="10" title_name="Income Tax" subtitle_number="2" subtitle_name="Maryland Taxable Income Calculations for Individual"> <text>Except as provided in Subtitle 4 of this title, the Maryland adjusted gross income of an individual is the individual's federal adjusted gross income for the taxable year as adjusted under this Part II of this subtitle.</text> </section> <section article="gtg" article_name="Tax - General" number="10-204" future_version_removed="true" title_number="10" title_name="Income Tax" subtitle_number="2" subtitle_name="Maryland Taxable Income Calculations for Individual"> <level label="a"> <text>To the extent excluded from federal adjusted gross income, the amounts under this section are added to the federal adjusted gross income of a resident to determine Maryland adjusted gross income.</text> </level> <level label="b"> <text>The addition under subsection (a) of this section includes interest or dividends, less related expenses, attributable to an obligation or security of:</text> <level label="1"> <text>another state; or</text> </level> <level label="2"> <text>a political subdivision or authority of another state.</text> </level> </level> <level label="c"> <level label="1"> <text>If exempted by federal law or by treaty from federal but not State tax on income, the addition under subsection (a) of this section includes salary, wages, or other compensation for personal services.</text> </level> <level label="2"> <text>If exempted by federal law or by treaty from federal but not State tax on income, the addition under subsection (a) of this section includes interest or dividends attributable to an obligation of:</text> <level label="i"> <text>the United States or a foreign government; or</text> </level> <level label="ii"> <text>an authority, a commission, an instrumentality, a possession, or a territory of the United States or of a foreign government.</text> </level> </level> </level> <level label="d"> <level label="1"> <text>In this subsection, “lump–sum distribution”, “minimum distribution allowance”, and “total taxable amount” have the meanings stated in § 402(e) of the Internal Revenue Code.</text> </level> <level label="2"> <text>The addition under subsection (a) of this section includes the amount by which the total taxable amount of a lump–sum distribution exceeds the sum of:</text> <level label="i"> <text>60% of the capital gains portion of the total taxable amount; and</text> </level> <level label="ii"> <text>the minimum distribution allowance.</text> </level> </level> <level label="3"> <text>For purposes of this subsection, the capital gains portion of the total taxable amount is determined by multiplying the total taxable amount by a fraction:</text> <level label="i"> <text>the numerator of which is the number of calendar years of active participation by the employee in the plan before January 1, 1974; and</text> </level> <level label="ii"> <text>the denominator of which is the number of calendar years of active participation by the employee in the plan.</text> </level> </level> </level> <level label="e"> <text>The addition under subsection (a) of this section includes the oil percentage depletion allowance claimed under § 613 or § 613A of the Internal Revenue Code.</text> </level> <level label="f"> <text>The addition under subsection (a) of this section includes the amount of pickup contributions of a member of a retirement or pension system:</text> <level label="1"> <text>provided for under § 21–313 of the State Personnel and Pensions Article; and</text> </level> <level label="2"> <text>excluded from federal adjusted gross income under § 414(h)(2) of the Internal Revenue Code.</text> </level> </level> <level label="g"> <level label="1"> <text>In this subsection, “remaindermen” includes a person whose remainder interest is vested, contingent, or vested subject to divestment.</text> </level> <level label="2"> <text>The addition under subsection (a) of this section includes any capital loss 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:</text> <level label="i"> <text>nonresidents during the entire taxable year; or</text> </level> <level label="ii"> <text>corporations not doing business in the State.</text> </level> </level> <level label="3"> <text>The addition required under paragraph (2) of this subsection does not apply if there are no remaindermen of the trust in being.</text> </level> </level> <level label="h"> <text>The addition under subsection (a) of this section includes the amount deducted under § 222 of the Internal Revenue Code for qualified tuition and related expenses paid during the taxable year.</text> </level> <level label="i"> <text>Repealed.</text> </level> <level label="j"> <text>The addition under subsection (a) of this section includes any amount deducted for costs, as defined under § 10–732 of this title, for security clearance administrative expenses and construction and equipment costs incurred to construct or renovate a sensitive compartmented information facility if an amount is included in the application for a credit under § 10–732 of this title.</text> </level> <level label="k"> <text>For a taxable year beginning after December 31, 2012, the addition under subsection (a) of this section includes the amount of income of an electing small business trust, as defined under § 1361(e)(1) of the Internal Revenue Code, that is subject to the special taxing rules under § 641(c) of the Internal Revenue Code.</text> </level> <level label="l"> <text>The addition under subsection (a) of this section includes any amount deducted as a donation, as defined under § 10–736 or § 10–749 of this title, to the extent that the amount of the donation is included in an application for a credit that is certified under § 10–736 or § 10–749 of this title.</text> </level> </section> <section article="gtg" article_name="Tax - General" number="10-205" title_number="10" title_name="Income Tax" subtitle_number="2" subtitle_name="Maryland Taxable Income Calculations for Individual"> <level label="a"> <text>In addition to the modification under § 10–204 of this subtitle, the amounts under this section are added to the federal adjusted gross income of a resident to determine Maryland adjusted gross income.</text> </level> <level label="b"> <text>The addition under subsection (a) of this section includes the amount of a credit claimed under:</text> <level label="1"> <text>§ 10–702 of this title for wages paid to an employee in an enterprise zone; and</text> </level> <level label="2"> <text>§ 10–704.7 of this title or § 8–216 of this article for wages paid and qualified child care or transportation expenses incurred with respect to a qualified employee with a disability.</text> </level> </level> <level label="c"> <text>In the year after decertification of land used for commercial forest land under § 5–219 of the Natural Resources Article, the addition under subsection (a) of this section includes the amount allowed in a prior taxable year as a subtraction under § 10–208(i) of this subtitle for reforestation or timber stand improvement.</text> </level> <level label="d"> <text>The addition under subsection (a) of this section includes the amount of a credit that is claimed under § 10–703 of this title and is based on a tax paid by an S corporation to a state that does not recognize the federal tax treatment of an S corporation.</text> </level> <level label="d–1"> <text>The addition under subsection (a) of this section includes the amount of a credit that is claimed under § 10–703 of this title and is based on a tax imposed on any pass–through entity by another state that is deductible in determining the pass–through entity’s income under the Internal Revenue Code.</text> </level> <level label="e"> <level label="1"> <level label="i"> <text>In this subsection the following words have the meanings indicated.</text> </level> <level label="ii"> <text>“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.</text> </level> <level label="iii"> <text>“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.</text> </level> <level label="iv"> <text>“Net operating loss deduction” means a net operating loss deduction allowed for federal income tax purposes under § 172 of the Internal Revenue Code.</text> </level> </level> <level label="2"> <text>If a net operating loss deduction is allowed for the taxable year, the addition under subsection (a) of this section for the taxable year includes, for each loss year as to which a portion of the net operating loss deduction is attributable, an amount equal to the lesser of:</text> <level label="i"> <text>the amount of the net operating loss deduction attributable to that loss year; or</text> </level> <level label="ii"> <text>the amount by which the total net operating loss in the loss year is less than the sum of:</text> <level label="1"> <text>the net addition modification for that loss year; and</text> </level> <level label="2"> <text>the cumulative net operating loss deductions attributable to that loss year allowed for the taxable year and all prior taxable years.</text> </level> </level> </level> </level> <level label="f"> <text>The addition under subsection (a) of this section includes 50% of the sum of tax preference items under § 10–222 of this subtitle.</text> </level> <level label="g"> <text>The addition under subsection (a) of this section includes the amount claimed and allowed as a deduction for federal income tax purposes for expenses attributable to:</text> <level label="1"> <text>operating a family child care home in the State without having the registration required by § 9.5–304 of the Education Article; or</text> </level> <level label="2"> <text>operating a child care center in the State without having the license required by § 9.5–405 of the Education Article.</text> </level> </level> <level label="h"> <level label="1"> <level label="i"> <text>In this subsection the following words have the meanings indicated.</text> </level> <level label="ii"> <text>“Account holder” means an account holder as defined in § 18–1901, § 18–19A–01, or § 18–19B–01 of the Education Article.</text> </level> <level label="iii"> <text>“Qualified beneficiary” has the meaning stated in § 18–1901 of the Education Article.</text> </level> <level label="iv"> <text>“Qualified designated beneficiary” means a qualified designated beneficiary as defined in § 18–19A–01 or § 18–19B–01 of the Education Article.</text> </level> <level label="v"> <text>“Qualified higher education expenses” has the meaning stated in § 529 of the Internal Revenue Code.</text> </level> </level> <level label="2"> <text>The addition under subsection (a) of this section includes the amount of:</text> <level label="i"> <text>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</text> </level> <level label="ii"> <text>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.</text> </level> </level> <level label="3"> <text>The amount of the addition required under this subsection shall be reduced by any amount included in the individual’s federal adjusted gross income as a result of the refund or distribution.</text> </level> <level label="4"> <text>The cumulative amount of the addition under this subsection for the taxable year and all prior taxable years may not exceed the cumulative amount allowed as a subtraction:</text> <level label="i"> <text>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</text> </level> <level label="ii"> <text>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.</text> </level> </level> </level> <level label="i"> <text>The addition under subsection (a) of this section includes the amount of a credit claimed under § 10–721 of this title for Maryland qualified research and development expenses.</text> </level> <level label="j"> <text>The addition under subsection (a) of this section includes the amount of a credit claimed under § 10–726 of this title for research and development expenses for cellulosic ethanol technology.</text> </level> <level label="k"> <text>The addition under subsection (a) of this section includes, if a taxpayer sold or exchanged a property for which a subtraction modification enacted by Chapters 544 and 545 of the Acts of the General Assembly of 2012, as amended, or Chapter 231 of the Acts of the General Assembly of 2017 has been claimed, the difference between:</text> <level label="1"> <text>the taxpayer’s federal adjusted gross income as reportable under the federal Mortgage Forgiveness Debt Relief Act of 2007, as amended, prior to its expiration on December 31, 2012, and without regard to the date limitation in § 108(a)(1)(e) of the Internal Revenue Code; and</text> </level> <level label="2"> <text>the taxpayer’s federal adjusted gross income as claimed in the taxable year.</text> </level> </level> <level label="l"> <level label="1"> <level label="i"> <text>In this subsection the following words have the meanings indicated.</text> </level> <level label="ii"> <text>“ABLE account contributor” means an individual who contributes money to an ABLE account as defined in § 18–19C–01 of the Education Article.</text> </level> <level label="iii"> <text>“ABLE account holder” means the holder of an account as defined in § 18–19C–01 of the Education Article.</text> </level> <level label="iv"> <text>“Designated beneficiary” has the meaning stated in § 18–19C–01 of the Education Article.</text> </level> <level label="v"> <text>“Qualified disability expenses” has the meaning stated in § 18–19C–01 of the Education Article.</text> </level> </level> <level label="2"> <text>The addition under subsection (a) of this section includes the amount of:</text> <level label="i"> <text>any refund received in the taxable year by an ABLE account contributor under the Maryland ABLE Program; or</text> </level> <level label="ii"> <text>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.</text> </level> </level> <level label="3"> <text>The amount of the addition required under this subsection shall be reduced by any amount included in the individual’s federal adjusted gross income as a result of a refund or distribution.</text> </level> <level label="4"> <text>The cumulative amount of the addition under this subsection for the taxable year and all prior taxable years may not exceed the cumulative amount allowed as a subtraction under § 10–208(v) of this subtitle for the taxable year and all prior taxable years for contributions made by an ABLE account contributor to an ABLE account under the Maryland ABLE Program under which the distribution is received.</text> </level> </level> <level label="m"> <text>The addition under subsection (a) of this section includes the amount of credit that is claimed under § 10–701.1 of this title for the amount of tax paid by a pass–through entity under § 10–102.1 of this title and is attributable to the member’s share of tax on the member’s share of the pass–through entity’s taxable income, as defined in § 10–102.1(a)(8) of this title.</text> </level> </section> <section article="gtg" article_name="Tax - General" number="10-206" title_number="10" title_name="Income Tax" subtitle_number="2" subtitle_name="Maryland Taxable Income Calculations for Individual"> <level label="a"> <text>The amounts under this section are added to the federal adjusted gross income of a nonresident to determine Maryland adjusted gross income.</text> </level> <level label="b"> <text>To the extent attributable to Maryland sources the addition under subsection (a) of this section includes the additions required for a resident under § 10-204 of this subtitle.</text> </level> <level label="c"> <text>The addition under subsection (a) of this section includes the additions required for a resident under § 10-205 of this subtitle.</text> </level> <level label="d"> <text>The addition under subsection (a) of this section includes the amount of any loss or adjustment to income that:</text> <level label="1"> <text>is included in computing federal adjusted gross income; and</text> </level> <level label="2"> <text>is not attributable to Maryland sources.</text> </level> </level> </section> <section article="gtg" article_name="Tax - General" number="10-207" title_number="10" title_name="Income Tax" subtitle_number="2" subtitle_name="Maryland Taxable Income Calculations for Individual"> <level label="a"> <text>To the extent included in federal adjusted gross income, the amounts under this section are subtracted from the federal adjusted gross income of a resident to determine Maryland adjusted gross income.</text> </level> <level label="b"> <text>The subtraction under subsection (a) of this section includes a distribution, to a beneficiary, of accumulated income on which a fiduciary has paid the income tax.</text> </level> <level label="c"> <text>The subtraction under subsection (a) of this section includes interest or dividends attributable to an obligation of the United States or an authority, commission, instrumentality, possession, or territory of the United States.</text> </level> <level label="c–1"> <level label="1"> <level label="i"> <text>In this subsection the following words have the meanings indicated.</text> </level> <level label="ii"> <text>“Mutual fund” means a regulated investment company as defined under § 851 of the Internal Revenue Code.</text> </level> <level label="iii"> <text>“United States government obligation” means an obligation of the United States or an authority, commission, instrumentality, possession, or territory of the United States.</text> </level> </level> <level label="2"> <text>The subtraction under subsection (a) of this section includes a distribution or dividend by a mutual fund of interest or dividends attributable to a United States government obligation.</text> </level> </level> <level label="d"> <text>The subtraction under subsection (a) of this section includes income attributable to an employer–provided official vehicle used in accordance with law by a member of a State, county, or local:</text> <level label="1"> <text>police force; or</text> </level> <level label="2"> <text>fire department.</text> </level> </level> <level label="e"> <text>The subtraction under subsection (a) of this section includes a payment from a pension system to an individual for a disability or injury that arose out of and in the course of the individual’s employment as a policeman or fire fighter.</text> </level> <level label="e–1"> <level label="1"> <text>In this subsection, “law enforcement officer” means a law enforcement officer as defined in § 1–101 of the Public Safety Article or other sworn law enforcement officer of the United States, a state, or a political subdivision of a state.</text> </level> <level label="2"> <text>The subtraction under subsection (a) of this section includes:</text> <level label="i"> <text>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</text> </level> <level label="ii"> <text>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.</text> </level> </level> </level> <level label="f"> <text>The subtraction under subsection (a) of this section includes income that:</text> <level label="1"> <text>is received by withdrawing money from a retirement account known as a Keogh Plan and established under Subchapter D of the Internal Revenue Code; and</text> </level> <level label="2"> <text>is attributable to:</text> <level label="i"> <text>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</text> </level> <level label="ii"> <text>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.</text> </level> </level> </level> <level label="g"> <text>The subtraction under subsection (a) of this section includes a payment received under a fire, rescue, or ambulance personnel length of service award program that is funded by any county or municipal corporation of the State.</text> </level> <level label="h"> <text>Repealed.</text> </level> <level label="i"> <text>The subtraction under subsection (a) of this section includes profit realized from the sale or exchange of a bond issued by the State or a political subdivision of the State.</text> </level> <level label="j"> <text>The subtraction under subsection (a) of this section includes a payment received:</text> <level label="1"> <text>under Title II of the Social Security Act; or</text> </level> <level label="2"> <text>as a benefit under the Railroad Retirement Act.</text> </level> </level> <level label="k"> <text>The subtraction under subsection (a) of this section includes payment for relocation and assistance under Title 12, Subtitle 2 of the Real Property Article.</text> </level> <level label="l"> <text>The subtraction under subsection (a) of this section includes that portion of an annuity received by a retiree of a retirement or pension system:</text> <level label="1"> <text>for which pickup contributions were made under § 21–313 of the State Personnel and Pensions Article; and</text> </level> <level label="2"> <text>that is included in federal adjusted gross income under § 414(h)(2) of the Internal Revenue Code.</text> </level> </level> <level label="m"> <text>The subtraction under subsection (a) of this section includes a refund of tax on income received from a state or a political subdivision of a state.</text> </level> <level label="n"> <text>The subtraction under subsection (a) of this section includes any income that federal law or treaty exempts from a state but not federal tax on income.</text> </level> <level label="o"> <level label="1"> <text>In this subsection, “remaindermen” includes a person whose remainder interest is vested, contingent, or vested subject to divestment.</text> </level> <level label="2"> <text>The subtraction under subsection (a) of this section includes:</text> <level label="i"> <text>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</text> </level> <level label="ii"> <text>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:</text> <level label="1"> <text>nonresidents during the entire taxable year; or</text> </level> <level label="2"> <text>corporations not doing business in the State.</text> </level> </level> </level> <level label="3"> <text>The subtraction allowed under paragraph (2)(ii) of this subsection does not apply if there are no remaindermen of the trust in being.</text> </level> </level> <level label="p"> <level label="1"> <level label="i"> <text>In this subsection the following words have the meanings indicated.</text> </level> <level label="ii"> <text>“Military pay” means pay received as a result of military service.</text> </level> <level label="iii"> <text>“Military service” has the meaning stated in subsection (q)(1) of this section.</text> </level> </level> <level label="2"> <text>The subtraction under subsection (a) of this section includes the first $15,000 of military pay that is:</text> <level label="i"> <text>received by an individual who is in active military service; and</text> </level> <level label="ii"> <text>attributable to military service of the individual outside the United States.</text> </level> </level> <level label="3"> <text>The amount of the subtraction under paragraph (2) of this subsection:</text> <level label="i"> <text>is reduced dollar for dollar in the amount by which military pay received by the individual exceeds $15,000; and</text> </level> <level label="ii"> <text>is reduced to zero if the amount of military pay received by the individual exceeds $30,000.</text> </level> </level> </level> <level label="q"> <level label="1"> <level label="i"> <text>In this subsection the following words have the meanings indicated.</text> </level> <level label="ii"> <text>“Armed forces” has the meaning stated in § 9–901 of the State Government Article.</text> </level> <level label="iii"> <text>“Military retirement income” means retirement income, including death benefits, received as a result of military service.</text> </level> <level label="iv"> <text>“Military service” means:</text> <level label="1"> <text>induction into the armed forces for training and service under the Selective Training and Service Act of 1940 or a subsequent act of a similar nature;</text> </level> <level label="2"> <text>membership in a reserve component;</text> </level> <level label="3"> <text>membership in an active component of the armed forces; or</text> </level> <level label="4"> <text>active duty with the commissioned corps of the Public Health Service, the National Oceanic and Atmospheric Administration, or the Coast and Geodetic Survey.</text> </level> </level> </level> <level label="2"> <text>The subtraction under subsection (a) of this section includes:</text> <level label="i"> <text>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</text> </level> <level label="ii"> <text>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.</text> </level> </level> </level> <level label="r"> <level label="1"> <text>In this subsection, “modified Maryland adjusted gross income” means Maryland adjusted gross income determined separately for each spouse on a joint return without regard to the subtraction allowed under this subsection.</text> </level> <level label="2"> <text>For a two–income married couple filing a joint return, the subtraction under subsection (a) of this section includes the lesser of $1,200 or the modified Maryland adjusted gross income of the spouse with the lesser modified Maryland adjusted gross income for the taxable year.</text> </level> </level> <level label="s"> <level label="1"> <level label="i"> <text>In this subsection the following words have the meanings indicated.</text> </level> <level label="ii"> <text>“Qualified beneficiary” has the meaning stated in § 18–1901 of the Education Article.</text> </level> <level label="iii"> <text>“Qualified designated beneficiary” means a qualified designated beneficiary as defined in § 18–19A–01 or § 18–19B–01 of the Education Article.</text> </level> <level label="iv"> <text>“Qualified higher education expenses” has the meaning stated in § 529 of the Internal Revenue Code.</text> </level> </level> <level label="2"> <text>Except as provided in paragraph (3) of this subsection, the subtraction under subsection (a) of this section includes any amount included in federal adjusted gross income as a result of a distribution to:</text> <level label="i"> <text>a qualified beneficiary pursuant to a prepaid contract under the Maryland Senator Edward J. Kasemeyer Prepaid College Trust;</text> </level> <level label="ii"> <text>a qualified designated beneficiary from an investment account under the Maryland Senator Edward J. Kasemeyer College Investment Plan; or</text> </level> <level label="iii"> <text>a qualified designated beneficiary from an investment account under the Maryland Broker–Dealer College Investment Plan.</text> </level> </level> <level label="3"> <text>The subtraction under paragraph (2) of this subsection does not apply to:</text> <level label="i"> <text>a refund under the Maryland Senator Edward J. Kasemeyer Prepaid College Trust; or</text> </level> <level label="ii"> <text>a distribution that is not used by the qualified beneficiary or qualified designated beneficiary for qualified higher education expenses.</text> </level> </level> </level> <level label="t"> <level label="1"> <level label="i"> <text>In this subsection the following words have the meanings indicated.</text> </level> <level label="ii"> <text>“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.</text> </level> <level label="iii"> <text>“Nazi Germany” means:</text> <level label="1"> <text>for the period from 1929 to 1933, the Republic of Germany, commonly referred to as the Weimar Republic; and</text> </level> <level label="2"> <text>for the period from 1933 through 1945, Deutsche Reich.</text> </level> </level> </level> <level label="2"> <text>The subtraction under subsection (a) of this section includes:</text> <level label="i"> <text>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</text> </level> <level label="ii"> <text>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:</text> <level label="1"> <text>a Holocaust victim; or</text> </level> <level label="2"> <text>a spouse or descendant of a Holocaust victim.</text> </level> </level> </level> <level label="3"> <text>The subtraction under paragraph (2) of this subsection includes interest on the proceeds receivable as insurance under policies issued to a Holocaust victim by European insurance companies prior to and during World War II.</text> </level> <level label="4"> <text>The subtraction under paragraph (2) of this subsection does not include:</text> <level label="i"> <text>assets acquired with the assets described in paragraph (2) of this subsection; or</text> </level> <level label="ii"> <text>assets acquired with the proceeds from the sale of the assets described in paragraph (2) of this subsection.</text> </level> </level> <level label="5"> <text>The subtraction under paragraph (2)(i) of this subsection shall only apply if the individual:</text> <level label="i"> <text>is the first recipient of the assets described in paragraph (2)(i) of this subsection after their recovery; and</text> </level> <level label="ii"> <text>is:</text> <level label="1"> <text>a Holocaust victim; or</text> </level> <level label="2"> <text>a spouse or descendant of a Holocaust victim.</text> </level> </level> </level> </level> <level label="u"> <text>Repealed.</text> </level> <level label="v"> <level label="1"> <text>In this subsection, “artistic work”, “arts and entertainment district”, and “qualifying residing artist” have the meanings stated in § 4–701 of the Economic Development Article.</text> </level> <level label="2"> <text>The subtraction under subsection (a) of this section includes the amount of income derived within an arts and entertainment district by a qualifying residing artist from the publication, production, or sale of an artistic work that the artist created, wrote, composed, or executed in the arts and entertainment district.</text> </level> <level label="3"> <text>For the purpose of determining whether income is derived within an arts and entertainment district for the purpose of this subsection, a qualifying residing artist shall allocate receipts and expenses as the Comptroller may require.</text> </level> </level> <level label="w"> <level label="1"> <text>In this subsection:</text> <level label="i"> <text>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</text> </level> <level label="ii"> <text>“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.</text> </level> </level> <level label="2"> <text>Subject to the limitation under paragraph (3) of this subsection, for each taxable year beginning after December 31, 2006, but before January 1, 2010, the subtraction under subsection (a) of this section includes the foreign earned income of an individual earned as an employee of the United States or of an agency of the United States.</text> </level> <level label="3"> <text>The amount subtracted under this section:</text> <level label="i"> <text>does not include any amount subtracted under any other provisions of this section; and</text> </level> <level label="ii"> <text>may not exceed $3,500 for any taxable year.</text> </level> </level> </level> <level label="x"> <text>The subtraction under subsection (a) of this section includes an amount received as a grant under the Solar Energy Grant Program under § 9–2007 of the State Government Article.</text> </level> <level label="y"> <level label="1"> <text>In this subsection, “principal residence” has the meaning stated in § 121 of the Internal Revenue Code.</text> </level> <level label="2"> <text>Subject to paragraph (3) of this subsection, the subtraction under subsection (a) of this section includes the amount of a gain resulting from a payment from the Maryland Department of Transportation to an individual for the acquisition of a portion of the individual’s property on which the individual’s principal residence is located.</text> </level> <level label="3"> <text>The amount subtracted under this subsection may not exceed the amount that may be excluded from income on the condemnation of an individual’s principal residence under § 121 of the Internal Revenue Code.</text> </level> </level> <level label="z"> <level label="1"> <level label="i"> <text>In this subsection the following words have the meanings indicated.</text> </level> <level label="ii"> <text>“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.</text> </level> <level label="iii"> <level label="1"> <text>“Noneconomic damages” means amounts received by a claimant in satisfaction of a claim of unlawful discrimination, other than compensation for lost pay or punitive damages.</text> </level> <level label="2"> <text>“Noneconomic damages” includes amounts received as a result of a claim of unlawful discrimination:</text> </level> <level label="A"> <text>whether by judgment or other order or by settlement; and</text> </level> <level label="B"> <text>whether payable in a lump sum or periodic payments.</text> </level> </level> <level label="iv"> <text>“Unlawful discrimination” has the meaning stated in § 62(e) of the Internal Revenue Code.</text> </level> </level> <level label="2"> <text>The subtraction under subsection (a) of this section includes any amount received by a claimant for noneconomic damages as a result of a claim of unlawful discrimination.</text> </level> </level> <level label="aa"> <level label="1"> <text>The subtraction under subsection (a) of this section includes the amount of student loan indebtedness discharged.</text> </level> <level label="2"> <text>To qualify for the subtraction modification provided under this subsection, an individual must attach to the individual’s income tax return or otherwise file with the Comptroller a copy of the notice stating that the loans have been discharged.</text> </level> </level> <level label="bb"> <level label="1"> <level label="i"> <text>In this subsection the following words have the meanings indicated.</text> </level> <level label="ii"> <text>“Designated beneficiary” means a designated beneficiary as defined in § 18–19C–01 of the Education Article.</text> </level> <level label="iii"> <text>“Qualified disability expenses” has the meaning stated in § 18–19C–01 of the Education Article.</text> </level> </level> <level label="2"> <text>Except as provided in paragraph (3) of this subsection, the subtraction under subsection (a) of this section includes any amount included in federal adjusted gross income as a result of a distribution to a designated beneficiary from an ABLE account under the Maryland ABLE Program.</text> </level> <level label="3"> <text>The subtraction under paragraph (2) of this subsection does not apply to:</text> <level label="i"> <text>a refund under the Maryland ABLE Program; or</text> </level> <level label="ii"> <text>a distribution that is not used for the benefit of the designated beneficiary for qualified disability expenses.</text> </level> </level> </level> <level label="cc"> <level label="1"> <level label="i"> <text>In this subsection the following words have the meanings indicated.</text> </level> <level label="ii"> <text>“Law enforcement agency” has the meaning stated in § 3–201 of the Public Safety Article.</text> </level> <level label="iii"> <text>“Law enforcement officer” means an individual who:</text> <level label="1"> <text>in an official capacity is authorized by law to make arrests; and</text> </level> <level label="2"> <text>is a member of the Maryland–National Capital Park Police, the Washington Suburban Sanitary Commission Police Force, or a law enforcement agency, including a law enforcement officer who serves in a probationary status or at the pleasure of the appointing authority of a county or municipal corporation.</text> </level> </level> <level label="iv"> <text>“Maryland Police Training and Standards Commission” means the unit established under § 3–202 of the Public Safety Article.</text> </level> </level> <level label="2"> <text>The subtraction under subsection (a) of this section includes the first $5,000 of income earned by a law enforcement officer if:</text> <level label="i"> <level label="1"> <text>the law enforcement officer resides in the political subdivision in which the law enforcement officer is employed; and</text> </level> <level label="2"> <text>the crime rate in the political subdivision exceeds the State’s crime rate;</text> </level> </level> <level label="ii"> <level label="1"> <text>the law enforcement officer is a member of the Maryland Transportation Authority Police or any other State law enforcement unit; and</text> </level> <level label="2"> <text>the law enforcement officer resides in a political subdivision in which the crime rate exceeds the State’s crime rate;</text> </level> </level> <level label="iii"> <level label="1"> <text>the law enforcement officer is a member of the Maryland–National Capital Park Police;</text> </level> <level label="2"> <text>the law enforcement officer resides in a political subdivision that lies wholly or partially within the Maryland–Washington Regional District established under § 20–101 of the Land Use Article; and</text> </level> <level label="3"> <text>the crime rate in the political subdivision exceeds the State’s crime rate; or</text> </level> </level> <level label="iv"> <level label="1"> <text>the law enforcement officer is a member of the Washington Suburban Sanitary Commission Police Force;</text> </level> <level label="2"> <text>the law enforcement officer resides in a political subdivision that lies wholly or partially within the Washington Suburban Sanitary District; and</text> </level> <level label="3"> <text>the crime rate in the political subdivision exceeds the State’s crime rate.</text> </level> </level> </level> <level label="3"> <text>On or before September 1, 2016, and every 3 years thereafter, the Maryland Police Training and Standards Commission shall certify to the Comptroller the political subdivisions in which the crime rate exceeds the State’s crime rate.</text> </level> </level> <level label="dd"> <text>The subtraction under subsection (a) of this section includes an amount contributed by the State into an investment account under § 18–19A–04.1 of the Education Article.</text> </level> <level label="ee"> <level label="1"> <text>The subtraction under subsection (a) of this section includes the amount that would have been allowed for indebtedness discharged for qualified principal residence indebtedness under the federal Mortgage Forgiveness Debt Relief Act of 2007, as amended, prior to its expiration on December 31, 2012, and without regard to the date limitation in § 108(a)(1)(E) of the Internal Revenue Code.</text> </level> <level label="2"> <text>The subtraction under paragraph (1) of this subsection applies only to an owner–occupied principal residence.</text> </level> <level label="3"> <text>The subtraction under paragraph (1) of this subsection may not exceed:</text> <level label="i"> <text>$100,000 for an individual; or</text> </level> <level label="ii"> <text>$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.</text> </level> </level> </level> <level label="ff"> <text>The subtraction under subsection (a) of this section includes:</text> <level label="1"> <text>the value of any medal given by:</text> <level label="i"> <text>the International Olympic Committee;</text> </level> <level label="ii"> <text>the International Paralympic Committee;</text> </level> <level label="iii"> <text>the Special Olympics International Committee; or</text> </level> <level label="iv"> <text>the International Committee of Sports for the Deaf; and</text> </level> </level> <level label="2"> <text>any prize money or honoraria received from the United States Olympic Committee that is the result of a performance at the Olympic Games, the Paralympic Games, the Special Olympic Games, or the Deaflympic Games.</text> </level> </level> <level label="gg"> <text>The subtraction under subsection (a) of this section includes the first $50,000 of compensation received by an individual during the taxable year in exchange for the sale of a perpetual conservation easement on real property located in the State.</text> </level> <level label="hh"> <text>The subtraction under subsection (a) of this section includes the value of a subsidy for rental expenses received by a resident of Howard County under the “Live Where You Work” program of the Downtown Columbia Plan.</text> </level> <level label="ii"> <level label="1"> <text>In this subsection, “Pimlico site” has the meaning stated in § 10–601 of the Economic Development Article.</text> </level> <level label="2"> <text>The subtraction under subsection (a) of this section includes:</text> <level label="i"> <text>the amount of gain recognized as a result of the direct or indirect transfer or conveyance of:</text> <level label="1"> <text>any property located, or used, at or within the Pimlico site; and</text> </level> <level label="2"> <text>any portion of the Bowie Race Course Training Center property; and</text> </level> </level> <level label="ii"> <text>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.</text> </level> </level> </level> <level label="jj"> <level label="1"> <text>In this subsection, “coronavirus relief payment” means a federal, State, or local government grant or loan:</text> <level label="i"> <text>for which a person applied on or after March 5, 2020; and</text> </level> <level label="ii"> <text>that was provided to the person for the purpose of assisting with the economic hardships resulting from the coronavirus pandemic.</text> </level> </level> <level label="2"> <text>For a taxable year beginning after December 31, 2019, but before January 1, 2022, the subtraction under subsection (a) of this section includes the amount of a coronavirus relief payment, including any amount of a coronavirus relief loan that has been forgiven, received by the person during the taxable year.</text> </level> <level label="3"> <level label="i"> <text>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.</text> </level> <level label="ii"> <text>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.</text> </level> <level label="iii"> <text>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:</text> <level label="1"> <text>the names of the coronavirus relief payment programs administered by the unit or local government;</text> </level> <level label="2"> <text>a list of recipients of a coronavirus relief payment, including the name, address, and tax identification number of each recipient;</text> </level> <level label="3"> <text>the amount of the coronavirus relief payment provided to the person;</text> </level> <level label="4"> <text>the date that the coronavirus relief payment was provided to the person; and</text> </level> <level label="5"> <text>any other information requested regarding a coronavirus relief payment.</text> </level> </level> </level> </level> <level label="kk"> <text>For a taxable year beginning after December 31, 2020, but before January 1, 2022, the subtraction under subsection (a) of this section includes the amount of any State economic impact payment received by an individual in accordance with Chapter 39 of the Acts of the General Assembly of 2021.</text> </level> <level label="ll"> <text>For a taxable year beginning after December 31, 2020, but before January 1, 2022, the subtraction under subsection (a) of this section includes the amount of utility arrearages forgiven during the taxable year, if the forgiveness of the utility arrearages was offered through grants provided to utilities in accordance with Sections 9 and 10 of Chapter 39 of the Acts of the General Assembly of 2021.</text> </level> <level label="mm"> <level label="1"> <level label="i"> <text>In this subsection the following words have the meanings indicated.</text> </level> <level label="ii"> <text>“Correctional officer” means an individual who:</text> <level label="1"> <text>was employed in:</text> </level> <level label="A"> <text>a State correctional facility, as defined in § 1–101 of the Correctional Services Article;</text> </level> <level label="B"> <text>a local correctional facility, as defined in § 1–101 of the Correctional Services Article;</text> </level> <level label="C"> <text>a juvenile facility included in § 9–226 of the Human Services Article; or</text> </level> <level label="D"> <text>a facility of the United States that is equivalent to a State or local correctional facility or a juvenile facility included in § 9–226 of the Human Services Article; and</text> </level> <level label="2"> <text>is eligible to receive retirement income attributable to the individual’s employment under item 1 of this subparagraph.</text> </level> </level> <level label="iii"> <text>“Emergency services personnel” means emergency medical technicians or paramedics.</text> </level> <level label="iv"> <text>“Employee retirement system” has the meaning stated under § 10–209(a) of this subtitle.</text> </level> <level label="v"> <text>“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.</text> </level> </level> <level label="2"> <text>Subject to paragraph (3) of this subsection, the subtraction under subsection (a) of this section includes income from an employee retirement system that is attributable to service as a public safety employee, if the income is received by an individual who is at least 55 years old on the last day of the taxable year.</text> </level> <level label="3"> <text>The subtraction under subsection (a) of this section includes:</text> <level label="i"> <text>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;</text> </level> <level label="ii"> <text>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;</text> </level> <level label="iii"> <text>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;</text> </level> <level label="iv"> <text>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;</text> </level> <level label="v"> <text>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</text> </level> <level label="vi"> <text>for a taxable year beginning after December 31, 2029, the first $20,000 of income described under paragraph (2) of this subsection.</text> </level> </level> </level> <level label="nn"> <text>The subtraction under subsection (a) of this section includes the first $100,000 of income received by an individual during a taxable year if the individual is at least 100 years old on the last day of the taxable year.</text> </level> <level label="oo"> <text>The subtraction allowed under subsection (a) of this section includes the amount of union dues paid by an individual during the taxable year that were allowed as a deduction under § 162 of the Internal Revenue Code prior to January 1, 2018, without regard to the limitation imposed by § 67 of the Internal Revenue Code.</text> </level> <level label="pp"> <level label="1"> <text>In this subsection, “benefit payment” means a payment that is provided to an individual or the family member of an individual as a result of the individual being injured or killed in the collapse of the Francis Scott Key Bridge on March 26, 2024.</text> </level> <level label="2"> <text>For a taxable year beginning after December 31, 2023, but before January 1, 2026, the subtraction under subsection (a) of this section includes the amount of any benefit payment received by an individual.</text> </level> </level> <level label="qq"> <level label="1"> <text>In this subsection, “legislative energy relief refund” means a credit against a person’s electric utility bill that is offered through grants provided to electric companies in accordance with § 9–20B–05(i)(3) of the State Government Article.</text> </level> <level label="2"> <text>The subtraction under subsection (a) of this section includes the amount of a legislative energy relief refund received by a person during the taxable year.</text> </level> </level> </section> <section article="gtg" article_name="Tax - General" number="10-208" future_version_removed="true" title_number="10" title_name="Income Tax" subtitle_number="2" subtitle_name="Maryland Taxable Income Calculations for Individual"> <level label="a"> <text>In addition to the modification under § 10–207 of this subtitle, the amounts under this section are subtracted from the federal adjusted gross income of a resident to determine Maryland adjusted gross income.</text> </level> <level label="b"> <text>The subtraction under subsection (a) of this section includes an amount equal to:</text> <level label="1"> <text>$12,000, if during the taxable year the taxpayer adopts a child who the State determines is a child with a special need, as described in § 473(c)(1) and (2) of the Social Security Act, and the adoption is made through a private, nonprofit, licensed adoption agency or a public child welfare agency; and</text> </level> <level label="2"> <text>$10,000, if during the taxable year the taxpayer adopts a child without a special need as provided under item (1) of this subsection.</text> </level> </level> <level label="c"> <level label="1"> <text>The subtraction under subsection (a) of this section includes expenses that a blind individual or an employer of a blind individual incurs in providing a human or mechanical reader for the individual, if the individual has permanent impairment of both eyes with central visual acuity:</text> <level label="i"> <text>of 20/200 or less in the better eye, with corrective glasses; or</text> </level> <level label="ii"> <text>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.</text> </level> </level> <level label="2"> <text>The total amount of the reading service expenses under paragraph (1) of this subsection may not exceed:</text> <level label="i"> <text>$1,000 of expenses that an employer incurs for a reader used in the course of a blind individual’s employment; and</text> </level> <level label="ii"> <text>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.</text> </level> </level> </level> <level label="d"> <level label="1"> <text>In this subsection:</text> <level label="i"> <text>“enhanced agricultural management equipment” means:</text> <level label="1"> <text>a planter or drill that:</text> </level> <level label="A"> <text>is commonly known as a “no–till” planter or drill; and</text> </level> <level label="B"> <text>is designed to minimize the disturbance of the soil in planting crops;</text> </level> <level label="2"> <text>liquid manure soil injection equipment that is designed to inject manure into the soil to reduce nutrient runoff;</text> </level> <level label="3"> <text>a deep no–till ripper that does not invert the soil profile and is used to address compaction in high residue cropping systems;</text> </level> <level label="4"> <text>poultry or livestock manure spreading equipment used by a farm owner or tenant on farmland in accordance with a nutrient management plan prepared by an individual licensed by the Secretary of Agriculture in accordance with Title 8, Subtitle 8 of the Agriculture Article if the manure spreading equipment is used:</text> </level> <level label="A"> <text>to spread poultry manure and bedding from normal poultry production with a capability of being calibrated to 1 ton per acre; or</text> </level> <level label="B"> <text>to apply solid or liquid livestock waste;</text> </level> <level label="5"> <text>vertical tillage equipment used to incorporate livestock manure or poultry litter into the soil;</text> </level> <level label="6"> <text>a global positioning system device used for management of agricultural nutrient applications; and</text> </level> <level label="7"> <text>an integrated optical sensing and nutrient application system that measures crop status and applies the crop’s nitrogen requirements at variable rates based on predicted in–season yield potential for the crop and the predicted responsiveness of the crop to additional nitrogen; and</text> </level> </level> <level label="ii"> <text>“enhanced agricultural management equipment” includes equipment that attaches to or is pulled by equipment listed in item (i) of this paragraph.</text> </level> </level> <level label="2"> <text>Except as provided in paragraph (3) of this subsection, the subtraction under subsection (a) of this section includes 100% of the expenses that a taxpayer incurs to buy and install enhanced agricultural management equipment if:</text> <level label="i"> <text>the equipment has a useful life of at least 4 years;</text> </level> <level label="ii"> <text>the taxpayer:</text> <level label="1"> <text>bought the equipment:</text> </level> <level label="A"> <text>after December 31, 1985, if the equipment is a planter or drill;</text> </level> <level label="B"> <text>after December 31, 1989, if the equipment is liquid manure soil injection equipment;</text> </level> <level label="C"> <text>after December 31, 1997, if the equipment is poultry or livestock manure spreading equipment;</text> </level> <level label="D"> <text>after December 31, 2001, if the equipment is a deep no–till ripper that does not invert the soil profile; or</text> </level> <level label="E"> <text>after December 31, 2012, if the equipment is a global positioning system device used for management of agricultural nutrient applications or an integrated optical sensing and nutrient application system;</text> </level> <level label="2"> <text>owns the equipment for at least 3 years after the taxable year in which the subtraction is made; and</text> </level> <level label="3"> <text>uses the equipment in agricultural production; and</text> </level> </level> <level label="iii"> <text>for liquid manure soil injection equipment, the equipment is:</text> <level label="1"> <text>used on land upon which farm products, as defined under § 10–601 of the Agriculture Article, are raised; and</text> </level> <level label="2"> <text>not used to inject sludge into the soil.</text> </level> </level> </level> <level label="3"> <text>The subtraction under subsection (a) of this section includes 50% of the expenses that a taxpayer incurs to buy and install enhanced agricultural management equipment that is vertical tillage equipment used to incorporate livestock manure or poultry litter into the soil if:</text> <level label="i"> <text>the equipment has a useful life of at least 4 years; and</text> </level> <level label="ii"> <text>the taxpayer:</text> <level label="1"> <text>bought the equipment after December 31, 2012;</text> </level> <level label="2"> <text>owns the equipment for at least 3 years after the taxable year in which the subtraction is made; and</text> </level> <level label="3"> <text>uses the equipment in agricultural production.</text> </level> </level> </level> <level label="4"> <text>To qualify for the subtraction under paragraphs (2) and (3) of this subsection, a taxpayer shall file a statement from the Department of Agriculture certifying compliance with the requirements of this section.</text> </level> <level label="5"> <text>If the subtraction allowed under paragraphs (2) and (3) of this subsection exceeds the Maryland taxable income that is computed without the modification allowed under this subsection and the subtraction is not used for the taxable year, the excess may be carried over to succeeding taxable years, not to exceed 5, until the full amount of the subtraction is used.</text> </level> <level label="6"> <text>On or before December 1, 2026, and each December 1 thereafter, the Secretary of Agriculture shall report to the Governor and, in accordance with § 2–1257 of the State Government Article, the General Assembly on additional types of equipment that the Secretary recommends should qualify as enhanced agricultural management equipment under this subsection.</text> </level> </level> <level label="e"> <text>The subtraction under subsection (a) of this section includes expenses for household and dependent care services not exceeding the dollar limit allowed under § 21(c) of the Internal Revenue Code and determined without reference to the percentage limitation in § 21(a)(2) of the Internal Revenue Code.</text> </level> <level label="f"> <text>The subtraction under subsection (a) of this section includes the fair market value of any artistic, literary, or musical creation or other artwork donated to and accepted by a museum in the State that is open to the general public if:</text> <level label="1"> <text>the value is not deductible from federal adjusted gross income;</text> </level> <level label="2"> <text>at least 50% of total income for the current or prior taxable year is derived from the sale of artwork that the individual produced;</text> </level> <level label="3"> <text>an independent appraiser verifies the fair market value; and</text> </level> <level label="4"> <text>the adjustment for the artwork is not more than 50% of the individual’s gross income in the calendar year of the donation.</text> </level> </level> <level label="g"> <level label="1"> <level label="i"> <text>In this subsection the following words have the meanings indicated.</text> </level> <level label="ii"> <text>“Farm product” means a farm product, as defined in § 10–601 of the Agriculture Article, that:</text> <level label="1"> <text>is grown or raised primarily to be sold;</text> </level> <level label="2"> <level label="A"> <text>the farmer donates to a gleaning cooperative; or</text> </level> </level> <level label="B"> <text>the farmer allows to be harvested or collected, free of charge, by a gleaning cooperative; and</text> </level> <level label="3"> <text>is suitable for human consumption when donated.</text> </level> </level> <level label="iii"> <text>“Gleaning cooperative” means a nonprofit organization that is:</text> <level label="1"> <text>tax exempt under § 501 of the Internal Revenue Code; and</text> </level> <level label="2"> <text>organized and operated to provide and distribute food free of charge to needy individuals, including unemployed and low income individuals.</text> </level> </level> <level label="iv"> <text>“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.</text> </level> </level> <level label="2"> <text>The subtraction under subsection (a) of this section includes the amount by which:</text> <level label="i"> <text>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</text> </level> <level label="ii"> <text>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.</text> </level> </level> <level label="3"> <text>To qualify for the subtraction under paragraph (2) of this subsection, an individual shall file with the individual’s income tax return:</text> <level label="i"> <text>a written statement from the gleaning cooperative that receives the farm products that certifies:</text> <level label="1"> <text>the quantity of the donated farm products received; and</text> </level> <level label="2"> <text>that the donated farm products will be used exclusively to provide free food to needy individuals and will not be transferred in exchange for money, other property, or services; and</text> </level> </level> <level label="ii"> <text>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.</text> </level> </level> </level> <level label="h"> <text>Repealed.</text> </level> <level label="i"> <level label="1"> <text>The subtraction under subsection (a) of this section includes twice the amount of expenses for reforestation or timber stand improvement activity on 3 to 1,000 acres of commercial forest land, exclusive of federal funds.</text> </level> <level label="2"> <text>Of the amount under paragraph (1) of this subsection:</text> <level label="i"> <text>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</text> </level> <level label="ii"> <text>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.</text> </level> </level> </level> <level label="i–1"> <level label="1"> <level label="i"> <text>In this subsection the following words have the meanings indicated.</text> </level> <level label="ii"> <text>“Public safety organization” means:</text> <level label="1"> <text>a bona fide Maryland police agency;</text> </level> <level label="2"> <text>a bona fide Maryland fire, rescue, or emergency medical services organization;</text> </level> <level label="3"> <text>an auxiliary organization of a bona fide Maryland fire, rescue, or emergency medical services organization;</text> </level> <level label="4"> <text>the United States Coast Guard Auxiliary;</text> </level> <level label="5"> <text>the Maryland Defense Force; or</text> </level> <level label="6"> <text>the Maryland Civil Air Patrol.</text> </level> </level> <level label="iii"> <text>“Public safety volunteer” means a member of a public safety organization.</text> </level> </level> <level label="2"> <text>The subtraction under subsection (a) of this section includes an amount equal to the amount specified in paragraph (4) of this subsection if an individual is a qualifying public safety volunteer for the taxable year, as determined under paragraph (3) of this subsection.</text> </level> <level label="3"> <text>An individual is a qualifying public safety volunteer for the taxable year eligible for the subtraction modification under this subsection if the individual:</text> <level label="i"> <text>is an active member of a public safety organization;</text> </level> <level label="ii"> <text>serves the public safety organization in a volunteer capacity without compensation, except nominal expenses or meals;</text> </level> <level label="iii"> <level label="1"> <text>qualifies for active status during the taxable year under:</text> </level> <level label="A"> <text>a police auxiliary or reserve volunteer program approved by the Maryland Police Training and Standards Commission in conjunction with the Maryland Association of Counties and the Maryland Municipal League that includes uniform systems for qualification and record keeping, if the program is incorporated into the police agency’s rules and regulations;</text> </level> <level label="B"> <text>a volunteer fire, rescue, or emergency medical services personnel or auxiliary length of service award program operated by a county or municipal corporation of the State, if the length of service award program requires for active status qualification a minimum of 50 points per year and that points be earned in at least two different categories; or</text> </level> <level label="C"> <text>a point system established by a county or municipal corporation that does not operate a volunteer fire, rescue, or emergency medical services personnel or auxiliary length of service award program or by the United States Coast Guard Auxiliary, the Maryland Defense Force, or the Maryland Civil Air Patrol, to identify active members of a volunteer fire, rescue, or emergency medical services organization or auxiliary organization, if the point system requires for active status qualification a minimum of 50 points per year and that points be earned in at least two different categories;</text> </level> <level label="2"> <text>has maintained active status for at least 25 years under:</text> </level> <level label="A"> <text>a police auxiliary or reserve volunteer program; or</text> </level> <level label="B"> <text>a volunteer fire, rescue, or emergency medical services personnel or auxiliary length of service award program or a point system established in lieu of a length of service award program;</text> </level> <level label="3"> <text>is a member of a reserve component who serves on active duty orders during the taxable year; or</text> </level> <level label="4"> <text>is a civilian or a member of the Merchant Marine on assignment in support of the armed forces of the United States during the taxable year in an area designated as a combat zone by executive order of the President; and</text> </level> </level> <level label="iv"> <text>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.</text> </level> </level> <level label="4"> <text>The amount of the subtraction under paragraph (2) of this subsection is equal to $7,000.</text> </level> <level label="5"> <level label="i"> <text>Each police agency shall:</text> <level label="1"> <text>maintain a record of the activities of each member of a police auxiliary or reserve during the calendar year;</text> </level> <level label="2"> <text>provide each member a report by February 15 of the following year indicating that the member qualified during the preceding calendar year; and</text> </level> <level label="3"> <text>provide a report that includes the names, Social Security numbers, and a certification that the individual qualified for the subtraction modification under this section.</text> </level> </level> <level label="ii"> <text>Each fire, rescue, or emergency medical services organization or auxiliary organization shall:</text> <level label="1"> <text>maintain a record of the points earned by each individual during each calendar year;</text> </level> <level label="2"> <text>provide each member a report identifying the number of points earned in each category by February 15 of the following year; and</text> </level> <level label="3"> <text>provide a report that includes the names, Social Security numbers, and points earned by those members qualifying for the subtraction modification under this subsection to the Maryland State Firefighters Association by May 1 of the following year.</text> </level> </level> <level label="iii"> <text>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:</text> <level label="1"> <text>maintains a record of the points earned by each individual during each calendar year;</text> </level> <level label="2"> <text>provides each member a report identifying the number of points earned in each category by February 15 of the following year; and</text> </level> <level label="3"> <text>provides a report that includes the names, Social Security numbers, and points earned by those members qualifying for the subtraction modification under this subsection to the Comptroller on or before October 1 of each year.</text> </level> </level> </level> <level label="6"> <text>To qualify for the subtraction modification under this subsection, an individual shall attach to the individual’s income tax return a copy of the report provided by the public safety organization under paragraph (5) of this subsection.</text> </level> <level label="7"> <level label="i"> <text>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.</text> </level> <level label="ii"> <text>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.</text> </level> </level> <level label="8"> <level label="i"> <text>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.</text> </level> <level label="ii"> <text>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.</text> </level> </level> </level> <level label="i–2"> <level label="1"> <text>Except as provided in paragraph (2) of this subsection, the subtraction under subsection (a) of this section includes the gross income of a child included in a parent’s gross income under § 1(g)(7) of the Internal Revenue Code.</text> </level> <level label="2"> <text>The subtraction under paragraph (1) of this subsection does not apply for any child who, under § 10–805(b) of this title:</text> <level label="i"> <text>is required to file an income tax return for the taxable year; or</text> </level> <level label="ii"> <text>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.</text> </level> </level> </level> <level label="j"> <level label="1"> <text>The subtraction under subsection (a) of this section includes unreimbursed automobile travel expenses for volunteer service:</text> <level label="i"> <text>to a nonprofit volunteer fire company;</text> </level> <level label="ii"> <text>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</text> </level> <level label="iii"> <text>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.</text> </level> </level> <level label="2"> <text>The amount of the travel expenses under paragraph (1) of this subsection shall be:</text> <level label="i"> <text>computed using the standard mileage rate allowed for unreimbursed automobile travel expenses under § 162 of the Internal Revenue Code; and</text> </level> <level label="ii"> <text>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.</text> </level> </level> </level> <level label="k"> <level label="1"> <text>The subtraction under subsection (a) of this section includes the amount of salary or wages paid for which a deduction is not allowed under § 280C(a) of the Internal Revenue Code, not exceeding the credit allowed for targeted jobs under § 51 of the Internal Revenue Code.</text> </level> <level label="2"> <text>The subtraction allowed under this subsection shall be reduced by the amount of the credit claimed by the taxpayer under § 10–755 of this title.</text> </level> </level> <level label="l"> <text>Repealed.</text> </level> <level label="m"> <text>Repealed.</text> </level> <level label="n"> <level label="1"> <level label="i"> <text>In this subsection the following words have the meanings indicated.</text> </level> <level label="ii"> <text>“Account holder” has the meaning stated in § 18–1901 of the Education Article.</text> </level> <level label="iii"> <text>“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.</text> </level> <level label="iv"> <text>“Qualified higher education expenses” has the meaning stated in § 529 of the Internal Revenue Code.</text> </level> </level> <level label="2"> <text>The subtraction under subsection (a) of this section includes the amount of advance payments of qualified higher education expenses made by an account holder or a contributor during the taxable year as provided under a prepaid contract in accordance with the Maryland Senator Edward J. Kasemeyer Prepaid College Trust.</text> </level> <level label="3"> <text>Subject to paragraph (4) of this subsection, for each prepaid contract, the subtraction under paragraph (2) of this subsection may not exceed $2,500 for any taxable year.</text> </level> <level label="4"> <text>The amount disallowed as a subtraction under this subsection for any taxable year as a result of the limitation under paragraph (3) of this subsection shall be treated as having been made in the next succeeding taxable year and, subject to the $2,500 annual limitation for each prepaid contract, may be carried over to succeeding taxable years until the full amount of the advance payments has been allowed as a subtraction.</text> </level> </level> <level label="o"> <level label="1"> <level label="i"> <text>In this subsection the following words have the meanings indicated.</text> </level> <level label="ii"> <text>“Account holder” means an account holder as defined in § 18–19A–01 or § 18–19B–01 of the Education Article.</text> </level> <level label="iii"> <text>“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.</text> </level> <level label="iv"> <text>“Investment account” means an investment account as defined in § 18–19A–01 or § 18–19B–01 of the Education Article.</text> </level> <level label="v"> <text>“Qualified designated beneficiary” means a qualified designated beneficiary as defined in § 18–19A–01 or § 18–19B–01 of the Education Article.</text> </level> </level> <level label="2"> <level label="i"> <text>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.</text> </level> <level label="ii"> <text>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.</text> </level> </level> <level label="3"> <level label="i"> <text>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.</text> </level> <level label="ii"> <text>For purposes of the limitation under this paragraph, each spouse on a joint return shall be treated separately.</text> </level> </level> <level label="4"> <text>Subject to the $2,500 annual limitation for each account holder or contributor for each qualified designated beneficiary, the amount disallowed as a subtraction under this subsection for any taxable year as a result of the limitation under paragraph (3) of this subsection may be carried over until used to the next 10 succeeding taxable years as a subtraction.</text> </level> </level> <level label="p"> <level label="1"> <text>In this subsection, “health care facility” has the meaning stated in § 19–114 of the Health – General Article.</text> </level> <level label="2"> <text>The subtraction under subsection (a) of this section includes 100% of the expenses that a taxpayer incurs to buy and install handrails in an existing elevator in a health care facility or other building in which at least 50% of the space is used for medical purposes.</text> </level> </level> <level label="q"> <level label="1"> <level label="i"> <text>In this subsection the following words have the meanings indicated.</text> </level> <level label="ii"> <text>“Nitrogen removal technology” has the meaning stated in § 9–1108 of the Environment Article.</text> </level> <level label="iii"> <text>“On–site sewage disposal system” has the meaning stated in § 9–1108 of the Environment Article.</text> </level> </level> <level label="2"> <text>The subtraction under subsection (a) of this section includes the amount by which the cost difference between a conventional on–site sewage disposal system and a system that utilizes nitrogen removal technology exceeds the amount of assistance the Department of the Environment provides the homeowner under § 9–1108 of the Environment Article.</text> </level> </level> <level label="r"> <text>The subtraction under subsection (a) of this section includes any payment to an individual made as a result of a foreclosure settlement negotiated by the Attorney General.</text> </level> <level label="s"> <level label="1"> <level label="i"> <text>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.</text> </level> <level label="ii"> <text>“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.</text> </level> </level> <level label="2"> <text>The subtraction allowed under subsection (a) of this section includes up to $500 of qualified conservation program expenses paid by an individual who applies to enter into a forest conservation and management plan with the Department of Natural Resources, if the application is approved by the Department.</text> </level> </level> <level label="t"> <level label="1"> <text>Subject to paragraph (2) of this subsection, the subtraction under subsection (a) of this section includes 100% of the costs of health insurance that a taxpayer incurs on behalf of another individual if the other individual and taxpayer are recognized by the State as lawfully married.</text> </level> <level label="2"> <text>The subtraction under paragraph (1) of this subsection may not exceed the cost of a health insurance premium that:</text> <level label="i"> <text>is paid by the taxpayer or the employer of the taxpayer to provide coverage for the taxpayer’s spouse; and</text> </level> <level label="ii"> <text>is subject to federal income tax under the Internal Revenue Code.</text> </level> </level> </level> <level label="u"> <level label="1"> <level label="i"> <text>In this subsection the following words have the meanings indicated.</text> </level> <level label="ii"> <level label="1"> <text>“Foster parent” means an individual approved by a local department to provide 24–hour care for a foster child in the home where the individual resides.</text> </level> <level label="2"> <text>“Foster parent” includes a kinship parent.</text> </level> <level label="3"> <text>“Foster parent” does not include a treatment foster parent licensed by a child placement agency.</text> </level> </level> <level label="iii"> <text>“Kinship parent” has the meaning stated in § 5–534 of the Family Law Article.</text> </level> <level label="iv"> <text>“Local department” means a department of social services in a county or the Montgomery County Department of Health and Human Services.</text> </level> </level> <level label="2"> <text>Subject to the requirements of this subsection, the subtraction under subsection (a) of this section includes 100% of the unreimbursed expenses that a foster parent incurs on behalf of a foster child.</text> </level> <level label="3"> <level label="i"> <text>The subtraction allowed under paragraph (2) of this subsection includes only an expense that the local department approves as necessary.</text> </level> <level label="ii"> <text>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.</text> </level> </level> <level label="4"> <text>On or before October 1 of each year, the Department of Human Services shall submit to the Comptroller a list of approved foster parents.</text> </level> <level label="5"> <text>The subtraction allowed under paragraph (2) of this subsection may not exceed $1,500.</text> </level> </level> <level label="v"> <level label="1"> <level label="i"> <text>In this subsection the following words have the meanings indicated.</text> </level> <level label="ii"> <text>“ABLE account contributor” means an individual who contributes money to an ABLE account as defined in § 18–19C–01 of the Education Article.</text> </level> <level label="iii"> <text>“Designated beneficiary” means a designated beneficiary as defined in § 18–19C–01 of the Education Article.</text> </level> <level label="iv"> <text>“Qualified disability expenses” has the meaning stated in § 18–19C–01 of the Education Article.</text> </level> </level> <level label="2"> <text>Subject to the limitation under paragraph (3) of this subsection, the subtraction under subsection (a) of this section includes the amount contributed by an ABLE account contributor during the taxable year to an ABLE account under the Maryland ABLE Program.</text> </level> <level label="3"> <level label="i"> <text>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.</text> </level> <level label="ii"> <text>For purposes of the limitation under this paragraph, each spouse on a joint return shall be treated separately.</text> </level> </level> <level label="4"> <text>Subject to the $2,500 annual limitation for each ABLE account contributor per qualified designated beneficiary, any amount disallowed as a subtraction under this subsection for any taxable year as a result of the limitation under paragraph (3) of this subsection may be carried over until used to the next 10 succeeding taxable years as a subtraction.</text> </level> </level> <level label="w"> <level label="1"> <level label="i"> <text>In this subsection the following words have the meanings indicated.</text> </level> <level label="ii"> <text>“Organ” means all or part of an individual’s liver, kidney, pancreas, intestine, lung, or bone marrow.</text> </level> <level label="iii"> <text>“Qualified expenses” means any unreimbursed travel expenses, lodging expenses, child or elder care expenses, medication expenses, or lost wages.</text> </level> </level> <level label="2"> <text>The subtraction under subsection (a) of this section includes up to $10,000 of the qualified expenses paid or incurred by a living individual during the taxable year that are attributable to the donation of one or more of the individual’s organs to another individual for organ transplantation.</text> </level> </level> <level label="x"> <level label="1"> <text>In this subsection, “eligible teacher” means an individual who is employed on a full–time basis for an academic year ending during the taxable year as:</text> <level label="i"> <level label="1"> <text>a prekindergarten classroom teacher in a publicly funded prekindergarten program at an eligible public provider, as defined in § 7–1A–01 of the Education Article; or</text> </level> <level label="2"> <text>a lead teacher or consulting teacher in a publicly funded prekindergarten program at an eligible private provider, as defined in § 7–1A–01 of the Education Article; or</text> </level> </level> <level label="ii"> <text>a kindergarten through grade 12 classroom teacher in an elementary or secondary school in the State.</text> </level> </level> <level label="2"> <text>Subject to paragraph (3) of this subsection, the subtraction allowed under subsection (a) of this section includes up to $250 of the unreimbursed expenses paid or incurred by an eligible teacher during a taxable year for the purchase of classroom supplies if the supplies are used by:</text> <level label="i"> <text>students in the classroom; or</text> </level> <level label="ii"> <text>the eligible teacher to prepare for or during classroom teaching.</text> </level> </level> <level label="3"> <text>The amount allowed as a subtraction under paragraph (2) of this subsection does not include an expense that is subtracted from federal adjusted gross income under § 62 of the Internal Revenue Code.</text> </level> </level> <level label="y"> <text>For a taxable year beginning after December 31, 2019, but before January 1, 2022, the subtraction under subsection (a) of this section includes the amount of benefits paid to an individual in accordance with Title 8 of the Labor and Employment Article, or in accordance with the unemployment insurance progam of a jurisdiction with which the State has a reciprocal taxation agreement, if the individual’s federal adjusted gross income for the taxable year does not exceed:</text> <level label="1"> <text>$75,000 for an individual; or</text> </level> <level label="2"> <text>$100,000 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.</text> </level> </level> <level label="z"> <level label="1"> <level label="i"> <text>In this subsection the following words have the meanings indicated.</text> </level> <level label="ii"> <text>“Diaper bank” means a nonprofit organization located in the State that:</text> <level label="1"> <text>is qualified as tax exempt under § 501(c)(3) of the Internal Revenue Code;</text> </level> <level label="2"> <text>is established and operating primarily for the purpose of collecting or purchasing disposable diapers or other hygiene products for infants or children; and</text> </level> <level label="3"> <text>distributes those diapers or hygiene products through schools, health care facilities, government agencies, or other nonprofit entities for eventual distribution to individuals free of charge.</text> </level> </level> <level label="iii"> <text>“Donation” means an irrevocable gift of:</text> <level label="1"> <text>disposable diapers, other hygiene products for infants or children, or feminine personal hygiene products; or</text> </level> <level label="2"> <text>cash that is specifically designated for the purchase of disposable diapers, other hygiene products for infants or children, or feminine personal hygiene products.</text> </level> </level> <level label="iv"> <text>“Feminine personal hygiene products” means sanitary pads, tampons, menstrual sponges, menstrual cups, or other similar feminine hygiene products, whether reusable or disposable.</text> </level> <level label="v"> <text>“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.</text> </level> </level> <level label="2"> <text>Subject to the limitations of this subsection, the subtraction allowed under subsection (a) of this section includes up to $1,000 of donations made by the taxpayer during the taxable year to a qualified charitable entity.</text> </level> <level label="3"> <text>To qualify for the subtraction under this subsection, the taxpayer shall file with the taxpayer’s income tax return:</text> <level label="i"> <text>the name of each qualified charitable entity to which a donation was made;</text> </level> <level label="ii"> <text>proof of the value of the donation; and</text> </level> <level label="iii"> <text>any other information that the Comptroller requires.</text> </level> </level> <level label="4"> <text>The Comptroller shall adopt regulations to carry out the provisions of this section, including the criteria and procedures for registration as a qualified charitable entity.</text> </level> </level> <level label="aa"> <level label="1"> <level label="i"> <text>In this subsection the following words have the meanings indicated.</text> </level> <level label="ii"> <text>“Account holder” means a first–time homebuyer who establishes a first–time homebuyer savings account.</text> </level> <level label="iii"> <text>“Allowable closing costs” means a disbursement listed on a settlement statement for the purchase of a home in the State by an account holder.</text> </level> <level label="iv"> <text>“Eligible costs” means the down payment and allowable closing costs for the purchase of a home in the State by an account holder.</text> </level> <level label="v"> <text>“Financial institution” has the meaning stated in § 1–101 of the Financial Institutions Article.</text> </level> <level label="vi"> <text>“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.</text> </level> <level label="vii"> <text>“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.</text> </level> <level label="viii"> <text>“Home” means a single–family residential real property, including a mobile home as defined in § 8A–101 of the Real Property Article.</text> </level> <level label="ix"> <text>“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.</text> </level> </level> <level label="2"> <level label="i"> <text>Except as otherwise provided in this subsection and subject to the limitations under this paragraph, the subtraction under subsection (a) of this section includes:</text> <level label="1"> <text>up to $5,000 of the amount contributed by an account holder to a first–time homebuyer savings account during the taxable year; and</text> </level> <level label="2"> <text>the earnings, including interest and other income on the principal, from the account during the taxable year.</text> </level> </level> <level label="ii"> <text>An account holder may claim a subtraction under this subsection:</text> <level label="1"> <text>for a period not to exceed 10 years;</text> </level> <level label="2"> <text>for total earnings not to exceed $50,000 during that 10–year period; and</text> </level> <level label="3"> <text>except as provided in paragraph (5) of this subsection, only if the principal and earnings of the account remain in the account until a withdrawal is made for eligible costs related to the purchase of a home by the account holder.</text> </level> </level> </level> <level label="3"> <text>A transfer of money into or from the account by a person other than the account holder to the account is subject to the requirements and limitations provided under this subsection.</text> </level> <level label="4"> <text>A person other than an account holder who transfers money to the account is not entitled to the subtraction under this subsection.</text> </level> <level label="5"> <level label="i"> <text>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.</text> </level> <level label="ii"> <text>An individual may not be the account holder of more than one account.</text> </level> </level> <level label="6"> <text>An account holder may withdraw money from the account and deposit the money in a new first–time homebuyer savings account held by a different financial institution or the same financial institution.</text> </level> <level label="7"> <level label="i"> <text>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.</text> </level> <level label="ii"> <level label="1"> <text>This subparagraph does not apply to any funds in the account for which a subtraction has not been claimed under this subsection.</text> </level> <level label="2"> <text>Any funds in the account not expended on eligible costs by December 31 of the last year of the 15–year period under subparagraph (i) of this paragraph shall be subject to taxation as ordinary income.</text> </level> </level> </level> <level label="8"> <text>The financial institution holding the first–time homebuyer savings account:</text> <level label="i"> <text>may not be held responsible for the use or application of funds deposited in or withdrawn from the account; and</text> </level> <level label="ii"> <text>may use funds held in the account for paying the expenses of administering the account.</text> </level> </level> <level label="9"> <level label="i"> <text>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:</text> <level label="1"> <text>those funds shall be taxed as ordinary income of the account holder; and</text> </level> <level label="2"> <text>the account holder shall pay a penalty to the State equal to 10% of the amount withdrawn.</text> </level> </level> <level label="ii"> <text>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.</text> </level> </level> <level label="10"> <text>An account holder claiming a subtraction under this subsection shall:</text> <level label="i"> <text>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</text> </level> <level label="ii"> <text>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.</text> </level> </level> <level label="11"> <level label="i"> <text>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.</text> </level> <level label="ii"> <text>The Department of Housing and Community Development shall provide and maintain the information required under subparagraph (i) of this paragraph.</text> </level> </level> <level label="12"> <text>The Department of Housing and Community Development shall conduct outreach to communities of the State that have experienced lower rates of homeownership regarding first–time homebuyer savings accounts and the availability of the subtraction under this subsection.</text> </level> <level label="13"> <text>The Comptroller shall adopt regulations to carry out the provisions of this subsection.</text> </level> </level> <level label="bb"> <level label="1"> <text>The subtraction under subsection (a) of this section includes the amount of ordinary and necessary expenses paid or incurred during the taxable year in carrying on a trade or a business as a cannabis grower, processor, dispensary, or any other cannabis establishment licensed or registered by the State, if the deduction for ordinary and necessary expenses is disallowed under § 280E of the Internal Revenue Code.</text> </level> <level label="2"> <text>The subtraction allowed under paragraph (1) of this subsection includes a reasonable allowance for salaries or other compensation for personal services actually rendered during the taxable year.</text> </level> <level label="3"> <text>The subtraction allowed under this subsection is applicable to all taxable years beginning after December 31, 2021.</text> </level> </level> <level label="cc"> <text>For a taxable year beginning after December 31, 2024, the subtraction under subsection (a) of this section includes the amount of tuition assistance provided to students who are eligible dependents or surviving spouses of fallen transportation workers in accordance with Title 18, Subtitle 40 of the Education Article.</text> </level> </section> <section article="gtg" article_name="Tax - General" number="10-209" title_number="10" title_name="Income Tax" subtitle_number="2" subtitle_name="Maryland Taxable Income Calculations for Individual"> <level label="a"> <text>In this section:</text> <level label="1"> <text>“employee retirement system” means a plan:</text> <level label="i"> <text>established and maintained by an employer for the benefit of its employees; and</text> </level> <level label="ii"> <text>qualified under § 401(a), § 403, or § 457(b) of the Internal Revenue Code; and</text> </level> </level> <level label="2"> <text>“employee retirement system” does not include:</text> <level label="i"> <text>an individual retirement account or annuity under § 408 of the Internal Revenue Code;</text> </level> <level label="ii"> <text>a Roth individual retirement account under § 408A of the Internal Revenue Code;</text> </level> <level label="iii"> <text>a rollover individual retirement account;</text> </level> <level label="iv"> <text>a simplified employee pension under Internal Revenue Code § 408(k); or</text> </level> <level label="v"> <text>an ineligible deferred compensation plan under § 457(f) of the Internal Revenue Code.</text> </level> </level> </level> <level label="b"> <text>Subject to subsections (d) and (e) of this section, to determine Maryland adjusted gross income, if, on the last day of the taxable year, a resident is at least 65 years old or is totally disabled or the resident’s spouse is totally disabled, or the resident is 55 years old and is a retired forest ranger, park ranger, or wildlife ranger of the United States, the State, or a political subdivision of the State, an amount is subtracted from federal adjusted gross income equal to the lesser of:</text> <level label="1"> <text>the cumulative or total annuity, pension, or endowment income from an employee retirement system included in federal adjusted gross income; or</text> </level> <level label="2"> <text>the maximum annual benefit under the Social Security Act computed under subsection (c) of this section, less any payment received as old age, survivors, or disability benefits under the Social Security Act, the Railroad Retirement Act, or both.</text> </level> </level> <level label="c"> <text>For purposes of subsection (b)(2) of this section, the Comptroller:</text> <level label="1"> <text>shall determine the maximum annual benefit under the Social Security Act allowed for an individual who retired at age 65 for the prior calendar year; and</text> </level> <level label="2"> <text>may allow the subtraction to the nearest $100.</text> </level> </level> <level label="d"> <level label="1"> <text>Military retirement income that is included in the subtraction under § 10–207(q) of this subtitle may not be taken into account for purposes of the subtraction under this section.</text> </level> <level label="2"> <text>Public safety employee retirement income that is included in the subtraction under § 10–207(mm) of this subtitle may not be taken into account for purposes of the subtraction under this section.</text> </level> </level> <level label="e"> <text>In the case of a retired forest ranger, park ranger, or wildlife ranger of the United States, the State, or a political subdivision of the State, the amount included under subsection (b)(1) of this section is limited to the first $15,000 of retirement income that is attributable to the resident’s employment as a forest ranger, park ranger, or wildlife ranger of the United States, the State, or a political subdivision of the State unless:</text> <level label="1"> <text>the resident is at least 65 years old or is totally disabled; or</text> </level> <level label="2"> <text>the resident’s spouse is totally disabled.</text> </level> </level> </section> <section article="gtg" article_name="Tax - General" number="10-210" title_number="10" title_name="Income Tax" subtitle_number="2" subtitle_name="Maryland Taxable Income Calculations for Individual"> <level label="a"> <text>The amounts under this section are subtracted from the federal adjusted gross income of a nonresident to determine Maryland adjusted gross income.</text> </level> <level label="b"> <text>To the extent included in federal adjusted gross income, the subtraction under subsection (a) of this section includes all income other than:</text> <level label="1"> <text>income derived from real or tangible personal property located in the State, whether the income is derived directly or from a fiduciary;</text> </level> <level label="2"> <text>income derived from:</text> <level label="i"> <text>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</text> </level> <level label="ii"> <text>an occupation, profession, or trade that is wholly carried on in the State;</text> </level> </level> <level label="3"> <text>the part, allocable to the State under § 10-401 of this title, of income derived from:</text> <level label="i"> <text>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</text> </level> <level label="ii"> <text>an occupation, profession, or trade that is carried on both in and out of the State; and</text> </level> </level> <level label="4"> <text>income from Maryland State Lottery prizes or winnings from any other wagering, as defined in § 10-905(e) of this title, in the State.</text> </level> </level> <level label="c"> <text>To the extent not otherwise included under subsection (b) of this section, the subtraction under subsection (a) of this section includes the amounts allowed to be subtracted for residents under § 10-207 of this subtitle.</text> </level> <level label="d"> <text>Subject to § 10-219 of this subtitle, the subtraction under subsection (a) of this section includes the amounts allowed to be subtracted for residents under § 10-208 of this subtitle.</text> </level> <level label="e"> <text>The subtraction under subsection (a) of this section includes income derived from wages, as defined in § 10-905(f) of this title, that are earned in this State if the Comptroller and the state in which the nonresident resides have agreed in writing to allow a reciprocal exemption from tax and withholding for the wages of residents of each state that are earned in the other state.</text> </level> <level label="f"> <text>The subtraction under subsection (a) of this section includes income derived from wages that are earned in the State by a nonresident rendering police, fire, rescue, or emergency services in an area covered under a state of emergency declared by the Governor under § 14-107 of the Public Safety Article if the wages are paid by:</text> <level label="1"> <text>a nonprofit organization not registered to do business in the State and not otherwise doing business in the State; or</text> </level> <level label="2"> <text>a state, county, or political subdivision of a state, other than the State of Maryland.</text> </level> </level> </section> <section article="gtg" article_name="Tax - General" number="10-210.1" title_number="10" title_name="Income Tax" subtitle_number="2" subtitle_name="Maryland Taxable Income Calculations for Individual"> <level label="a"> <level label="1"> <text>In this section the following words have the meanings indicated.</text> </level> <level label="2"> <text>“Depreciation” includes any deduction allowed under § 179 of the Internal Revenue Code.</text> </level> <level label="3"> <text>“Heavy duty SUV” means a 4–wheeled vehicle that:</text> <level label="i"> <text>is manufactured primarily for use on public streets, roads, and highways;</text> </level> <level label="ii"> <text>is rated at more than 6,000 but not more than 14,000 pounds gross vehicle weight; and</text> </level> <level label="iii"> <text>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.</text> </level> </level> <level label="4"> <level label="i"> <text>“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.</text> </level> <level label="ii"> <text>“Manufacturing entity” does not include a refiner, as defined in § 10–101 of the Business Regulation Article.</text> </level> </level> </level> <level label="b"> <text>In addition to the modifications under §§ 10–204 through 10–210 of this subtitle, to determine Maryland adjusted gross income of an individual:</text> <level label="1"> <level label="i"> <text>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</text> </level> <level label="ii"> <text>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;</text> </level> </level> <level label="2"> <text>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(n) of the Internal Revenue Code;</text> </level> <level label="3"> <text>an amount is added to or subtracted from federal adjusted gross income to determine the net operating loss deduction allowed under § 172 of the Internal Revenue Code without regard to an election under § 172(b)(1)(H) of the Internal Revenue Code for a carryback period of up to 5 years;</text> </level> <level label="4"> <level label="i"> <text>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:</text> <level label="1"> <text>increasing above $25,000 the dollar limitation set forth in § 179(b)(1) of the Internal Revenue Code; or</text> </level> <level label="2"> <text>increasing above $200,000 the phase–out threshold set forth in § 179(b)(2) of the Internal Revenue Code; and</text> </level> </level> <level label="ii"> <text>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;</text> </level> </level> <level label="5"> <text>an amount is added to or subtracted from federal adjusted gross income to reflect the recognition of income from discharge of indebtedness and the allowance of any deduction with respect to original issue discount without regard to § 108(i) of the Internal Revenue Code; and</text> </level> <level label="6"> <text>an amount is added to or subtracted from federal adjusted gross income to reflect the determination of the depreciation deduction with respect to any heavy duty SUV as if the heavy duty SUV were subject to the limitations of § 280F of the Internal Revenue Code in the same manner as it would be if the vehicle were rated at 6,000 pounds gross vehicle weight or less.</text> </level> </level> </section> <section article="gtg" article_name="Tax - General" number="10-211" title_number="10" title_name="Income Tax" subtitle_number="2" subtitle_name="Maryland Taxable Income Calculations for Individual"> <level label="a"> <text>Subject to the provisions of this section, an individual may deduct an exemption for:</text> <level label="1"> <text>the taxpayer;</text> </level> <level label="2"> <text>the spouse of the taxpayer if:</text> <level label="i"> <text>a joint return is not made by the taxpayer and the spouse; and</text> </level> <level label="ii"> <text>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</text> </level> </level> <level label="3"> <text>each individual who is a dependent, as defined in § 152 of the Internal Revenue Code, of the taxpayer for the taxable year.</text> </level> </level> <level label="b"> <text>Except as provided in subsection (c) of this section, whether or not a federal return is filed, to determine Maryland taxable income, an individual other than a fiduciary may deduct as an exemption:</text> <level label="1"> <text>$3,200 for each exemption that the individual may deduct under subsection (a) of this section;</text> </level> <level label="2"> <text>an additional $3,200 for each dependent, as defined in § 152 of the Internal Revenue Code, who is at least 65 years old on the last day of the taxable year;</text> </level> <level label="3"> <text>an additional $1,000 if the individual, on the last day of the taxable year, is at least 65 years old; and</text> </level> <level label="4"> <text>an additional $1,000 if the individual, on the last day of the taxable year, is a blind individual, as described in § 10–208(c) of this subtitle.</text> </level> </level> <level label="c"> <level label="1"> <text>If an individual other than one described in paragraph (2) of this subsection has federal adjusted gross income for the taxable year greater than $100,000, the amount allowed for each exemption under subsection (b)(1) or (2) of this section is limited to:</text> <level label="i"> <text>$1,600 if federal adjusted gross income for the taxable year does not exceed $125,000;</text> </level> <level label="ii"> <text>$800 if federal adjusted gross income for the taxable year is greater than $125,000 but not greater than $150,000; and</text> </level> <level label="iii"> <text>$0 if federal adjusted gross income for the taxable year is greater than $150,000.</text> </level> </level> <level label="2"> <text>If 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 has federal adjusted gross income for the taxable year greater than $150,000, the amount allowed for each exemption under subsection (b)(1) or (2) of this section is limited to:</text> <level label="i"> <text>$1,600 if federal adjusted gross income for the taxable year does not exceed $175,000;</text> </level> <level label="ii"> <text>$800 if federal adjusted gross income for the taxable year is greater than $175,000 but not greater than $200,000; and</text> </level> <level label="iii"> <text>$0 if federal adjusted gross income for the taxable year is greater than $200,000.</text> </level> </level> </level> </section> <section article="gtg" article_name="Tax - General" number="10-212" title_number="10" title_name="Income Tax" subtitle_number="2" subtitle_name="Maryland Taxable Income Calculations for Individual"> <level label="a"> <text>To determine Maryland taxable income, a fiduciary other than a personal representative may deduct $200 as an exemption.</text> </level> <level label="b"> <text>To determine Maryland taxable income, a personal representative may deduct $600 as an exemption.</text> </level> </section> <section article="gtg" article_name="Tax - General" number="10-213" title_number="10" title_name="Income Tax" subtitle_number="2" subtitle_name="Maryland Taxable Income Calculations for Individual"> <text>The subtraction modifications for volunteer police, fire, rescue, and emergency medical services personnel under § 10-208(i-1) and (l) of this subtitle shall be known as the Honorable Louis L. Goldstein Volunteer Police, Fire, Rescue, and Emergency Medical Services Personnel Subtraction Modification Program.</text> </section> <section article="gtg" article_name="Tax - General" number="10-217" title_number="10" title_name="Income Tax" subtitle_number="2" subtitle_name="Maryland Taxable Income Calculations for Individual"> <level label="a"> <level label="1"> <level label="i"> <text>Except as otherwise provided in this subsection, an individual may elect to use the standard deduction to compute Maryland taxable income whether or not the individual itemizes deductions on the individual’s federal income tax return in determining federal taxable income.</text> </level> <level label="ii"> <text>If an individual elects to use the standard deduction on the federal income tax return, the individual may not take any itemized deduction in § 10–218 of this subtitle.</text> </level> </level> <level label="2"> <text>A fiduciary may not use the standard deduction.</text> </level> </level> <level label="b"> <level label="1"> <text>For an individual other than one described in paragraphs (2) and (3) of this subsection, the standard deduction is $3,350.</text> </level> <level label="2"> <text>For an individual described in § 2 of the Internal Revenue Code as a head of household or as a surviving spouse, the standard deduction is $6,700.</text> </level> <level label="3"> <text>For spouses on a joint return, the standard deduction</text> <text>is $6,700.</text> </level> </level> <level label="c"> <level label="1"> <text>For each taxable year beginning after December 31, 2025, the standard deduction amount specified in subsection (b) of this section shall be increased by an amount equal to the product of multiplying the standard deduction amount by the cost–of–living adjustment specified in this subsection.</text> </level> <level label="2"> <text>For purposes of this subsection, the cost–of–living adjustment is the cost–of–living adjustment within the meaning of § 1(f)(3) of the Internal Revenue Code for the calendar year in which a taxable year begins, as determined by the Comptroller, by substituting “calendar year 2024” for “calendar year 2016” in § 1(f)(3)(A) of the Internal Revenue Code.</text> </level> <level label="3"> <text>If any increase determined under paragraph (1) of this subsection is not a multiple of $50, the increase shall be rounded down to the next lowest multiple of $50.</text> </level> </level> </section> <section article="gtg" article_name="Tax - General" number="10-218" title_number="10" title_name="Income Tax" subtitle_number="2" subtitle_name="Maryland Taxable Income Calculations for Individual"> <level label="a"> <text>Only an individual who itemizes deductions on the individual’s federal income tax return may elect to itemize deductions on the individual’s income tax return.</text> </level> <level label="b"> <text>Subject to subsection (c) of this section, an individual who elects to itemize deductions is allowed as a deduction the sum of the individual’s federal itemized deductions:</text> <level label="1"> <text>limited and reduced as required under the Internal Revenue Code;</text> </level> <level label="2"> <text>further reduced by any amount deducted under § 170 of the Internal Revenue Code for contributions of a preservation or conservation easement for which a credit is claimed under § 10–723 of this title; and</text> </level> <level label="3"> <text>further reduced by the amount claimed as taxes on income paid to a state or political subdivision of a state, after subtracting a pro rata portion of the reduction to itemized deductions required under § 68 of the Internal Revenue Code.</text> </level> </level> <level label="c"> <level label="1"> <text>In this subsection, “applicable amount” means:</text> <level label="i"> <text>$100,000 for a married individual filing separately; and</text> </level> <level label="ii"> <text>$200,000 for all other filers.</text> </level> </level> <level label="2"> <text>This subsection does not apply to a fiduciary.</text> </level> <level label="3"> <text>In the case of an individual whose federal adjusted gross income exceeds the applicable amount, the amount of itemized deductions otherwise allowable for a taxable year shall be reduced by 7.5% of the excess of the federal adjusted gross income over the applicable amount.</text> </level> <level label="4"> <text>This subsection shall be applied after the application of any other limitation on the allowance of any itemized deduction.</text> </level> </level> </section> <section article="gtg" article_name="Tax - General" number="10-219" title_number="10" title_name="Income Tax" subtitle_number="2" subtitle_name="Maryland Taxable Income Calculations for Individual"> <level label="a"> <text>A nonresident may claim and shall include only the part attributable to Maryland, as determined under this section, of:</text> <level label="1"> <text>the subtractions from federal adjusted gross income under § 10-208 of this subtitle;</text> </level> <level label="2"> <text>the deduction for exemptions under § 10-211 or § 10-212 of this subtitle; and</text> </level> <level label="3"> <level label="i"> <text>the standard deduction under § 10-217 of this subtitle; or</text> </level> <level label="ii"> <text>itemized deductions under § 10-218 of this subtitle.</text> </level> </level> </level> <level label="b"> <text>Unless the Comptroller requires or allows another method to compute the items listed in subsection (a) of this section, a nonresident shall prorate the items using a fraction:</text> <level label="1"> <text>the numerator of which is the Maryland adjusted gross income of the nonresident; and</text> </level> <level label="2"> <text>the denominator of which is the federal adjusted gross income of the nonresident.</text> </level> </level> </section> <section article="gtg" article_name="Tax - General" number="10-220" title_number="10" title_name="Income Tax" subtitle_number="2" subtitle_name="Maryland Taxable Income Calculations for Individual"> <level label="a"> <text>An individual who is a resident of the State for only a part of the taxable year may claim and shall include only the part attributable to Maryland, as determined under this section, of:</text> <level label="1"> <text>the additions to federal adjusted gross income under § 10-204 of this subtitle;</text> </level> <level label="2"> <text>the subtractions from federal adjusted gross income under §§ 10-207 through 10-209 of this subtitle;</text> </level> <level label="3"> <text>the deduction for exemptions under § 10-211 or § 10-212 of this subtitle; and</text> </level> <level label="4"> <level label="i"> <text>the standard deduction under § 10-217 of this subtitle; or</text> </level> <level label="ii"> <text>itemized deductions under § 10-218 of this subtitle.</text> </level> </level> </level> <level label="b"> <text>Unless the Comptroller requires or allows another method to compute the items listed in subsection (a) of this section, an individual who is a resident for only a part of the taxable year shall prorate the items using a fraction:</text> <level label="1"> <text>the numerator of which is the number of months in which the individual was a resident; and</text> </level> <level label="2"> <text>the denominator of which is 12.</text> </level> </level> <level label="c"> <text>An individual who is a resident for a period of more than 15 days in a month is deemed to be a resident for the full month.</text> </level> </section> <section article="gtg" article_name="Tax - General" number="10-222" title_number="10" title_name="Income Tax" subtitle_number="2" subtitle_name="Maryland Taxable Income Calculations for Individual"> <level label="a"> <text>In this section, “tax preference items” mean the items that:</text> <level label="1"> <text>total more than $10,000 for an individual return or $20,000 for a joint return;</text> </level> <level label="2"> <text>are defined under § 57 of the Internal Revenue Code;</text> </level> <level label="3"> <text>are modified and apportioned under § 59 of the Internal Revenue Code; and</text> </level> <level label="4"> <text>are further modified by excluding:</text> <level label="i"> <text>the oil percentage depletion allowance claimed under § 613 or § 613A of the Internal Revenue Code; and</text> </level> <level label="ii"> <text>interest described in § 57(a)(5) of the Internal Revenue Code, if the interest is attributable to obligations of:</text> <level label="1"> <text>the State of Maryland;</text> </level> <level label="2"> <text>a political subdivision or authority of the State; or</text> </level> <level label="3"> <text>any other entity authorized under Maryland law to issue obligations the interest on which is excluded from gross income under § 103 of the Internal Revenue Code.</text> </level> </level> </level> </level> <level label="b"> <text>Each shareholder of an S corporation shall report the shareholder’s pro rata share of the tax preference items of the corporation.</text> </level> <level label="c"> <level label="1"> <text>A nonresident shall include as tax preference items only those items that are based on income taxable in the State.</text> </level> <level label="2"> <text>If the tax preference items are based on income derived both in and out of the State, the nonresident shall include only a fraction:</text> <level label="i"> <text>the numerator of which is the dollar amount of the tax preference items based on income taxable in the State; and</text> </level> <level label="ii"> <text>the denominator of which is the total dollar amount of the tax preference items.</text> </level> </level> </level> </section> <section article="gtg" article_name="Tax - General" number="10-223" title_number="10" title_name="Income Tax" subtitle_number="2" subtitle_name="Maryland Taxable Income Calculations for Individual"> <level label="a"> <text>Beginning with individual tax returns for the 1986 tax year, and for all subsequent tax years, the Comptroller shall collect and compile information from income tax returns regarding the various elements of the State income tax and, for the State and for each county and the City of Baltimore, the impact of those various elements on various classes of Maryland taxpayers and on revenues.</text> </level> <level label="b"> <text>The data base shall be comprehensive and shall include the following:</text> <level label="1"> <text>component items of federal adjusted gross income, including loss items and preference income;</text> </level> <level label="2"> <text>components of itemized deductions;</text> </level> <level label="3"> <text>components of Maryland addition and subtraction modifications; and</text> </level> <level label="4"> <text>the number of taxpayers reporting each of the elements contained in items (1), (2), and (3) of this subsection.</text> </level> </level> <level label="c"> <text>On or before January 1 of the second year after returns are received for a tax year, the Comptroller shall submit to the Governor and, subject to § 2-1257 of the State Government Article, the President of the Senate and the Speaker of the House of Delegates a report providing the information compiled for that tax year.</text> </level> </section> <section article="gtg" article_name="Tax - General" number="10-301" title_number="10" title_name="Income Tax" subtitle_number="3" subtitle_name="Maryland Taxable Income Calculations for Corporation"> <text>The Maryland taxable income of a corporation is its Maryland modified income as allocated to the State under Subtitle 4 of this title.</text> </section> <section article="gtg" article_name="Tax - General" number="10-304" title_number="10" title_name="Income Tax" subtitle_number="3" subtitle_name="Maryland Taxable Income Calculations for Corporation"> <text>Except as provided in Subtitle 4 of this title, the Maryland modified income of a corporation, including a real estate investment trust or regulated investment company, is:</text> <level label="1"> <text>the corporation’s federal taxable income for the taxable year as determined under the Internal Revenue Code and as adjusted under this Part II of this subtitle;</text> </level> <level label="2"> <text>if the corporation is exempt from taxation under § 501 of the Internal Revenue Code, the sum for the taxable year of the corporation’s unrelated business taxable income, as defined under § 512 of the Internal Revenue Code, and its income that is subject to tax under § 527(f)(1) of the Internal Revenue Code, as adjusted under this Part II of this subtitle;</text> </level> <level label="3"> <text>if the corporation is an S corporation, its income that is subject to federal income tax, for the taxable year, as adjusted under this Part II of this subtitle; or</text> </level> <level label="4"> <text>if the corporation is an investment conduit or a special exempt entity, the applicable tax base of the corporation as adjusted under this Part II of this subtitle.</text> </level> </section> <section article="gtg" article_name="Tax - General" number="10-305" title_number="10" title_name="Income Tax" subtitle_number="3" subtitle_name="Maryland Taxable Income Calculations for Corporation"> <level label="a"> <text>To the extent excluded from federal taxable income, the amounts under this section are added to the federal taxable income of a corporation to determine Maryland modified income.</text> </level> <level label="b"> <text>The addition under subsection (a) of this section includes the net capital loss carryback, as defined in § 1212 of the Internal Revenue Code.</text> </level> <level label="c"> <text>The addition under subsection (a) of this section includes any taxes based on net income that are imposed by any state or by a political subdivision of any state.</text> </level> <level label="d"> <text>The addition under subsection (a) of this section includes the additions required for an individual under:</text> <level label="1"> <text>§ 10–204(b) of this title (Dividends and interest from another state or local obligation);</text> </level> <level label="2"> <text>§ 10–204(c)(2) of this title (Federal tax–exempt income);</text> </level> <level label="3"> <text>§ 10–204(e) of this title (Oil percentage depletion allowance);</text> </level> <level label="4"> <text>§ 10–204(i) of this title (Deduction for qualified production activities income);</text> </level> <level label="5"> <text>§ 10–204(j) of this title (Deduction for costs for security clearance administrative expenses and construction and equipment costs incurred to construct or renovate a sensitive compartmented information facility); and</text> </level> <level label="6"> <text>§ 10–204(l) of this title (Deduction for donations to qualified permanent endowment funds).</text> </level> </level> </section> <section article="gtg" article_name="Tax - General" number="10-306" title_number="10" title_name="Income Tax" subtitle_number="3" subtitle_name="Maryland Taxable Income Calculations for Corporation"> <level label="a"> <text>In addition to the modification under § 10–305 of this subtitle, the amounts under this section are added to the federal taxable income of a corporation to determine Maryland modified income.</text> </level> <level label="b"> <text>The addition under subsection (a) of this section includes the additions required for an individual under:</text> <level label="1"> <text>§ 10–205(b) of this title (Enterprise zone wage credit, employment opportunity credit, disability credit, and qualified ex–felon employee credit);</text> </level> <level label="2"> <text>§ 10–205(c) of this title (Reforestation and timber stand modification);</text> </level> <level label="3"> <text>§ 10–205(e) of this title (Net operating loss modification);</text> </level> <level label="4"> <text>§ 10–205(g) of this title (Unlicensed child care facility operating expenses);</text> </level> <level label="5"> <text>§ 10–205(i) of this title (Maryland research and development tax credit); and</text> </level> <level label="6"> <text>§ 10–205(m) of this title (Credit for share of taxes paid by pass–through entities).</text> </level> </level> <level label="c"> <text>Repealed.</text> </level> <level label="d"> <text>Repealed.</text> </level> <level label="e"> <text>Repealed.</text> </level> <level label="f"> <text>The addition under subsection (a) of this section includes the amount of a credit claimed under § 10–726 of this title for research and development expenses for cellulosic ethanol technology.</text> </level> </section> <section article="gtg" article_name="Tax - General" number="10-306.1" title_number="10" title_name="Income Tax" subtitle_number="3" subtitle_name="Maryland Taxable Income Calculations for Corporation"> <level label="a"> <level label="1"> <text>In this section the following words have the meanings indicated.</text> </level> <level label="2"> <text>“Aggregate effective tax rate” means the sum of the effective rates of tax imposed by this State, other states or possessions of the United States, and foreign nations that have entered into comprehensive tax treaties with the United States government, where a related member receiving a payment of interest expense or intangible expense is subject to tax and where the measure of the tax imposed included the payment.</text> </level> <level label="3"> <text>“Bank” means:</text> <level label="i"> <text>a bank holding company as defined in the federal Bank Holding Company Act of 1956, as amended, or a bank, trust company, savings bank, or savings and loan association incorporated or chartered under the laws of this State, another state, or the United States; or</text> </level> <level label="ii"> <text>a subsidiary or affiliate of an entity described in item (i) of this paragraph.</text> </level> </level> <level label="4"> <text>“Effective rate of tax imposed” means, as to any state, possession of the United States, or foreign nation, the maximum statutory tax rate imposed by the state, possession, or foreign nation multiplied by the applicable apportionment rate.</text> </level> <level label="5"> <text>“Intangible expense” means:</text> <level label="i"> <text>an expense, loss, or cost for, related to, or in connection directly or indirectly with the direct or indirect acquisition, use, maintenance, management, ownership, sale, exchange, or any other disposition of intangible property, to the extent the expense, loss, or cost is allowed as a deduction or cost in determining taxable income for the taxable year under the Internal Revenue Code;</text> </level> <level label="ii"> <text>a loss related to or incurred in connection directly or indirectly with factoring transactions or discounting transactions;</text> </level> <level label="iii"> <text>a royalty, patent, technical, or copyright fee;</text> </level> <level label="iv"> <text>a licensing fee; or</text> </level> <level label="v"> <text>any other similar expense or cost.</text> </level> </level> <level label="6"> <text>“Intangible property” means patents, patent applications, trade names, trademarks, service marks, copyrights, and similar types of intangible assets.</text> </level> <level label="7"> <text>“Interest expense” means an amount directly or indirectly allowed as a deduction under § 163 of the Internal Revenue Code for purposes of determining taxable income under the Internal Revenue Code.</text> </level> <level label="8"> <text>“Related entity” means a person that, under the attribution rules of § 318 of the Internal Revenue Code, is:</text> <level label="i"> <text>a stockholder who is an individual or a member of the stockholder’s family enumerated in § 318 of the Internal Revenue Code, if the stockholder and the members of the stockholder’s family own directly, indirectly, beneficially, or constructively, in the aggregate, at least 50% of the value of the taxpayer’s outstanding stock;</text> </level> <level label="ii"> <text>a stockholder or a stockholder’s partnership, limited liability company, estate, trust, or corporation, if the stockholder and the stockholder’s partnership, limited liability company, estate, trust, or corporation own directly, indirectly, beneficially, or constructively, in the aggregate, at least 50% of the value of the taxpayer’s outstanding stock; or</text> </level> <level label="iii"> <text>a corporation or a party related to the corporation in a manner that would require an attribution of stock from the corporation to the party or from the party to the corporation under the attribution rules of § 318 of the Internal Revenue Code, if the taxpayer owns directly, indirectly, beneficially, or constructively, at least 50% of the value of the corporation’s outstanding stock.</text> </level> </level> <level label="9"> <text>“Related member” means a person that, with respect to the taxpayer during all or any portion of the taxable year, is:</text> <level label="i"> <text>a related entity;</text> </level> <level label="ii"> <text>a component member, as defined in § 1563(b) of the Internal Revenue Code; or</text> </level> <level label="iii"> <text>a person to or from whom there is attribution of stock ownership in accordance with § 1563(e) of the Internal Revenue Code.</text> </level> </level> </level> <level label="b"> <level label="1"> <text>Except as otherwise provided in this section, in addition to the modifications under §§ 10–305 and 10–306 of this subtitle, the amounts under paragraph (2) of this subsection are added to the federal taxable income of a corporation to determine Maryland modified income.</text> </level> <level label="2"> <text>The addition under this subsection includes any otherwise deductible interest expense or intangible expense if the interest expense or intangible expense is directly or indirectly paid, accrued, or incurred to, or in connection directly or indirectly with one or more direct or indirect transactions with, one or more related members.</text> </level> </level> <level label="c"> <text>The addition required under subsection (b) of this section does not apply to any portion of the interest expense or intangible expense to the extent that the corporation establishes, as determined by the Comptroller, that:</text> <level label="1"> <text>the transaction giving rise to the payment of the interest expense or intangible expense between the corporation and the related member did not have as a principal purpose the avoidance of any portion of the tax due under this title;</text> </level> <level label="2"> <text>the interest expense or intangible expense was paid pursuant to arm’s–length contracts at an arm’s–length rate of interest or price; and</text> </level> <level label="3"> <level label="i"> <text>during the same taxable year, the related member directly or indirectly paid, accrued, or incurred the interest expense or intangible expense to a person who is not a related member;</text> </level> <level label="ii"> <level label="1"> <text>the related member was subject to a tax measured by its net income or receipts in this State, another state or possession of the United States, or a foreign nation that has entered into a comprehensive tax treaty with the United States government;</text> </level> <level label="2"> <text>a measure of the tax imposed by this State, another state or possession of the United States, or a foreign nation that has entered into a comprehensive tax treaty with the United States government included the interest expense or intangible expense received by the related member from the corporation; and</text> </level> <level label="3"> <text>the aggregate effective tax rate imposed on the amounts received by the related member is equal to or greater than 4%; or</text> </level> </level> <level label="iii"> <text>in the case of an interest expense, the corporation and the related member are banks.</text> </level> </level> </level> <level label="d"> <level label="1"> <text>Subject to regulations adopted by the Comptroller, the addition required under subsection (b) of this section does not apply if, in lieu of the 4% effective tax rate requirement under subsection (c)(3)(ii)3 of this section, the aggregate effective tax rate imposed on the amounts received by the recipient is greater than or equal to the aggregate effective tax rate that would have been imposed on the additional income of the payor corporation if the interest expense or intangible expense had not been deducted.</text> </level> <level label="2"> <text>For purposes of subsection (c)(3)(ii) of this section, the Comptroller may provide by regulation for an alternative to the effective tax rate requirement of subsection (c)(3)(ii)3 of this section if:</text> <level label="i"> <text>the related member:</text> <level label="1"> <text>is subject in another state or in a foreign nation that has entered into a comprehensive tax treaty with the United States government to a tax that is measured by gross receipts or is measured by net capital or net worth; and</text> </level> <level label="2"> <text>is not subject in that state or in that foreign nation to a tax measured by net income or receipts; or</text> </level> </level> <level label="ii"> <text>under other circumstances demonstrating to the satisfaction of the Comptroller that avoidance of any portion of the tax due under this title is not a principal purpose of the transaction giving rise to the payment of the interest expense or intangible expense between the corporation and the related member, the Comptroller determines that it is impractical for a related member that is subject to tax in this State, another state, or a foreign nation that has entered into a comprehensive tax treaty with the United States government, where the measure of the tax includes the payment to satisfy the requirements of subsection (c)(3)(ii) of this section.</text> </level> </level> </level> <level label="e"> <text>If the payor and the recipient are both included in a combined or consolidated report filed in a jurisdiction:</text> <level label="1"> <text>for purposes of subsection (c)(3)(ii)2 of this section, the measure of the tax imposed by that jurisdiction shall be deemed to include the interest expense or intangible expense; and</text> </level> <level label="2"> <text>for purposes of determining the effective rate of tax imposed by the jurisdiction, the applicable apportionment rate is the lesser of:</text> <level label="i"> <text>the apportionment rate of the recipient corporation, determined by using only that corporation’s factors in the numerators and denominators of the apportionment formula; or</text> </level> <level label="ii"> <text>the apportionment rate of the combined or consolidated group, determined by combining the recipient corporation’s factors with the factors of other members of the group included in the combined or consolidated report.</text> </level> </level> </level> <level label="f"> <level label="1"> <text>In addition to the modifications under §§ 10–305 and 10–306 of this subtitle, subject to paragraph (2) of this subsection, to determine Maryland taxable income, an amount is subtracted from the federal taxable income of a corporation equal to the amount received as royalties, interest, or similar income from intangibles from a related member to the extent the related member, with respect to the payment, is subject to the addition modification under subsection (b) of this section or a similar addition modification of another state or of a foreign nation that has entered into a comprehensive tax treaty with the United States government for intangible expenses or interest expenses paid to related members.</text> </level> <level label="2"> <text>The subtraction modification under this subsection is not allowed to the extent that:</text> <level label="i"> <text>the transaction giving rise to the payment of the interest expense or intangible expense had as a principal purpose the avoidance of State income taxes;</text> </level> <level label="ii"> <text>the interest expense or intangible expense was not paid pursuant to arm’s–length contracts at an arm’s–length rate of interest or price; or</text> </level> <level label="iii"> <text>the aggregate effective tax rate imposed on the amounts received by the recipient exceeds the aggregate effective tax rate imposed on the income of the payor corporation.</text> </level> </level> </level> <level label="g"> <text>This section may not be construed:</text> <level label="1"> <text>to require a corporation to include in or add to its net income more than once any amount of interest expense or intangible expense that the corporation pays, accrues, or incurs to a related member; or</text> </level> <level label="2"> <text>to limit or negate any other authority provided to the Comptroller under this article, including:</text> <level label="i"> <text>the authority to make adjustments under § 10–109 or § 10–402(e) of this title; or</text> </level> <level label="ii"> <text>the authority to enter into agreements and compromises otherwise allowed by law.</text> </level> </level> </level> <level label="h"> <text>The Comptroller shall adopt any regulations that are necessary or appropriate to implement this section.</text> </level> </section> <section article="gtg" article_name="Tax - General" number="10-306.2" title_number="10" title_name="Income Tax" subtitle_number="3" subtitle_name="Maryland Taxable Income Calculations for Corporation"> <level label="a"> <level label="1"> <text>In this section the following words have the meanings indicated.</text> </level> <level label="2"> <level label="i"> <text>“Captive REIT” means a corporation, trust, or association:</text> <level label="1"> <text>that is considered a real estate investment trust for the taxable year under § 856 of the Internal Revenue Code;</text> </level> <level label="2"> <text>that is not regularly traded on an established securities market; and</text> </level> <level label="3"> <text>of which more than 50% of the voting power or value of the beneficial interests or shares, at any time during the last half of the taxable year, is owned or controlled, directly or indirectly, by a single entity that is subject to the provisions of Subchapter C of Chapter 1 of the Internal Revenue Code.</text> </level> </level> <level label="ii"> <text>“Captive REIT” does not include:</text> <level label="1"> <text>a corporation, trust, or association of which, at any time during which the corporation, trust, or association satisfies subparagraph (i)3 of this paragraph, more than 50% of the voting power or value of the beneficial interests or shares of the corporation, trust, or association is owned or controlled, directly or indirectly, by:</text> </level> <level label="A"> <text>a real estate investment trust other than a real estate investment trust described in subparagraph (i) of this paragraph;</text> </level> <level label="B"> <text>a person exempt from taxation under § 501 of the Internal Revenue Code;</text> </level> <level label="C"> <text>a listed Australian property trust, or an entity organized as a trust in which a listed Australian property trust owns or controls, directly or indirectly, 75% or more of the voting power or value of the beneficial interests or shares of the trust; or</text> </level> <level label="D"> <text>a qualified foreign entity; or</text> </level> <level label="2"> <text>subject to regulations that the Comptroller adopts, a real estate investment trust that is intended to become regularly traded on an established securities market and that satisfies the requirements of § 856(a)(5) and (6) of the Internal Revenue Code by reason of § 856(h)(2) of the Internal Revenue Code.</text> </level> </level> </level> <level label="3"> <text>“Qualified foreign entity” means a corporation, trust, association, or partnership that is organized under the laws of a foreign government and:</text> <level label="i"> <text>at least 75% of the total asset value of the entity at the close of the entity’s taxable year is represented by real estate assets, as defined in § 856 of the Internal Revenue Code, cash and cash equivalents, and United States government securities;</text> </level> <level label="ii"> <level label="1"> <text>is not subject to tax on amounts distributed to the entity’s beneficial owners; or</text> </level> <level label="2"> <text>is exempt from entity–level taxation;</text> </level> </level> <level label="iii"> <text>on an annual basis, distributes at least 85% of the taxable income of the entity, as computed in the jurisdiction in which the entity is organized, to the holders of the shares or certificates of the beneficial interests of the entity;</text> </level> <level label="iv"> <level label="1"> <text>of which not more than 10% of the voting power or value of the beneficial interests or shares of the entity is owned or controlled directly, indirectly, or constructively by a single entity or individual; or</text> </level> <level label="2"> <text>the beneficial interests or shares of the entity are regularly traded on an established securities market; and</text> </level> </level> <level label="v"> <text>the entity is organized in a foreign country that has a tax treaty with the United States government.</text> </level> </level> </level> <level label="b"> <text>In addition to the modifications under §§ 10–305 through 10–306.1 of this subtitle, an amount equal to the amount of the dividends paid deduction allowed under the Internal Revenue Code for the taxable year is added to federal taxable income to determine the Maryland modified income of a captive REIT.</text> </level> <level label="c"> <text>For purposes of this section, the constructive ownership rules prescribed under § 318(a) of the Internal Revenue Code, as modified by § 856(d)(5) of the Internal Revenue Code, shall apply in determining the ownership of stock, assets, or net profits of any person.</text> </level> </section> <section article="gtg" article_name="Tax - General" number="10-307" title_number="10" title_name="Income Tax" subtitle_number="3" subtitle_name="Maryland Taxable Income Calculations for Corporation"> <level label="a"> <text>To the extent included in federal taxable income, the amounts under this section are subtracted from the federal taxable income of a corporation to determine Maryland modified income.</text> </level> <level label="b"> <text>The subtraction under subsection (a) of this section includes the amount included in the income of a domestic corporation claiming a foreign tax credit as dividends under § 78 of the Internal Revenue Code.</text> </level> <level label="c"> <text>The subtraction under subsection (a) of this section includes the percentage of the dividends received from an affiliated domestic international sales corporation equal to the percentage that would be excluded if the corporation did not qualify under § 992(a) of the Internal Revenue Code.</text> </level> <level label="d"> <text>The subtraction under subsection (a) of this section includes dividends received from a corporation if:</text> <level label="1"> <text>the receiving corporation owns, directly or indirectly, 50% or more of the paying corporation’s outstanding shares of capital stock; and</text> </level> <level label="2"> <text>the paying corporation is organized under the laws of a foreign government.</text> </level> </level> <level label="e"> <text>Repealed.</text> </level> <level label="f"> <text>The subtraction under subsection (a) of this section includes interest attributable to an obligation of the United States or an instrumentality of the United States.</text> </level> <level label="g"> <text>The subtraction under subsection (a) of this section includes the amounts allowed to be subtracted for an individual under:</text> <level label="1"> <text>§ 10–207(i) of this title (Profits on sale or exchange of State or local bonds);</text> </level> <level label="2"> <text>§ 10–207(k) of this title (Relocation and assistance payments);</text> </level> <level label="3"> <text>§ 10–207(m) of this title (State or local income tax refunds);</text> </level> <level label="4"> <text>§ 10–207(c–1) of this title (State tax–exempt interest from mutual funds);</text> </level> <level label="5"> <text>§ 10–207(ii) of this title (Gain on the transfer of property within the Pimlico site or Bowie Race Course Training Center property and income recognized as result of governmental expenditures); or</text> </level> <level label="6"> <text>§ 10–207(jj) of this title (Coronavirus relief payments).</text> </level> </level> </section> <section article="gtg" article_name="Tax - General" number="10-308" future_version_removed="true" title_number="10" title_name="Income Tax" subtitle_number="3" subtitle_name="Maryland Taxable Income Calculations for Corporation"> <level label="a"> <text>In addition to the modification under § 10–307 of this subtitle, the amounts under this section are subtracted from the federal taxable income of a corporation to determine Maryland modified income.</text> </level> <level label="b"> <text>The subtraction under subsection (a) of this section includes the amounts allowed to be subtracted for an individual under:</text> <level label="1"> <text>§ 10–208(d) of this title (Enhanced agricultural management equipment expenses);</text> </level> <level label="2"> <text>§ 10–208(i) of this title (Reforestation or timber stand expenses);</text> </level> <level label="3"> <text>§ 10–208(k) of this title (Wage expenses for targeted jobs);</text> </level> <level label="4"> <text>§ 10–208(p) of this title (Elevator handrails in health care facilities);</text> </level> <level label="5"> <text>§ 10–208(z) of this title (Donations to diaper banks and other charitable entities); and</text> </level> <level label="6"> <text>§ 10–208(bb) of this title (Trade or business expenses of a licensed or registered cannabis grower, processor, dispensary, or any other cannabis establishment).</text> </level> </level> <level label="c"> <text>In the case of a regulated investment company, the subtraction under subsection (a) of this section includes an amount equal to the exempt–interest dividends paid by the company that are attributable to amounts received by the company that are included in the addition modification for dividends and interest from state or local obligations of another state under § 10–305(d)(1) of this subtitle.</text> </level> </section> <section article="gtg" article_name="Tax - General" number="10-309" title_number="10" title_name="Income Tax" subtitle_number="3" subtitle_name="Maryland Taxable Income Calculations for Corporation"> <level label="a"> <text>In addition to the modifications under §§ 10-307 and 10-308 of this subtitle, the amounts under this section are subtracted from federal taxable income to determine Maryland modified income of a public service company engaged in an electric or gas business if the public service company was subject to the public service company franchise tax on December 31, 1999.</text> </level> <level label="b"> <text>The gain or loss realized by a public service company on the sale, retirement, or other taxable disposition or transfer of assets used in its electric or gas business shall be adjusted in an amount equal to the difference between the adjusted basis of the assets as recorded on the books of the public service company and the adjusted basis of the assets for federal income tax purposes calculated as of January 1, 2000.</text> </level> <level label="c"> <text>If the adjustment determined under subsection (b) of this section results in a subtraction that exceeds Maryland modified income computed without regard to the subtraction under this section, the amount of the excess may be carried forward to succeeding taxable years and used to reduce Maryland modified income in each succeeding taxable year until the excess is fully used.</text> </level> <level label="d"> <text>The modifications under this section shall continue to apply to assets transferred under a reorganization within the meaning of § 368(a) of the Internal Revenue Code or on the organization of a corporation principally in consideration for the issuance of its stock.</text> </level> </section> <section article="gtg" article_name="Tax - General" number="10-310" title_number="10" title_name="Income Tax" subtitle_number="3" subtitle_name="Maryland Taxable Income Calculations for Corporation"> <text>In addition to the modifications under §§ 10-305 through 10-309 of this subtitle, to determine Maryland modified income the federal taxable income of a corporation shall be adjusted as provided for an individual under § 10-210.1 of this title.</text> </section> <section article="gtg" article_name="Tax - General" number="10-401" title_number="10" title_name="Income Tax" subtitle_number="4" subtitle_name="Special Treatment of Income"> <text>In computing the adjustments under §§ 10-206 and 10-210 of this title, a nonresident shall allocate to the State income, losses, or adjustments derived in connection with a business that is carried on both in and out of the State and of which the nonresident is a partner, shareholder of an S corporation, or proprietor, or in connection with an occupation, profession, or trade carried on both in and out of the State by:</text> <level label="1"> <text>separate accounting, if the Comptroller allows; or</text> </level> <level label="2"> <text>the method that the Comptroller requires to determine fairly the part of the income derived from or reasonably attributable to the trade, business, profession, or occupation carried on in the State.</text> </level> </section> <section article="gtg" article_name="Tax - General" number="10-402" title_number="10" title_name="Income Tax" subtitle_number="4" subtitle_name="Special Treatment of Income"> <level label="a"> <text>In this section, “worldwide headquartered company” means a corporation included in a group of corporations including a parent corporation that:</text> <level label="1"> <text>filed a Form 10–Q with the Securities and Exchange Commission for the quarterly period ending June 30, 2017;</text> </level> <level label="2"> <text>has its principal executive office in the State; and</text> </level> <level label="3"> <level label="i"> <text>employs at all times between July 1, 2017, and June 30, 2020, at least 500 full–time employees at the parent corporation’s principal executive office that is located within the State; or</text> </level> <level label="ii"> <text>if the parent corporation is a franchisor, is part of a group of corporations that employs at all times between July 1, 2017, and June 30, 2020, at least 400 full–time employees at the parent corporation’s principal executive office that is located within the State.</text> </level> </level> </level> <level label="b"> <text>In computing Maryland taxable income, a corporation shall allocate Maryland modified income derived from or reasonably attributable to its trade or business in this State in the following manner:</text> <level label="1"> <text>if a corporation carries on its trade or business wholly within the State, the corporation shall allocate to the State all of the Maryland modified income of the corporation; and</text> </level> <level label="2"> <text>if a corporation carries on its trade or business within and outside the State, the corporation shall allocate to the State the part of the corporation’s Maryland modified income that is derived from or reasonably attributable to the part of its trade or business carried on in the State, in the manner required in subsection (c), (d), or (e) of this section.</text> </level> </level> <level label="c"> <level label="1"> <text>Except as provided in subsection (d) or (e) of this section, the part of the corporation’s Maryland modified income derived from or reasonably attributable to trade or business carried on in the State may be determined by separate accounting if practicable.</text> </level> <level label="2"> <text>If in any taxable year a corporation is permitted or required to use the separate accounting method in determining all or a portion of its Maryland taxable income, the portion that is separately accounted for to Maryland shall be taxable whether or not the Maryland modified income of the corporation for the taxable year is zero or less.</text> </level> </level> <level label="d"> <level label="1"> <level label="i"> <text>In this paragraph:</text> <level label="1"> <text>“manufacturing corporation” means a domestic or foreign corporation which 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, 1997 Edition, would be included in Sector 11, 31, 32, or 33; and</text> </level> <level label="2"> <text>“manufacturing corporation” does not include a refiner, as defined in § 10–101 of the Business Regulation Article.</text> </level> </level> <level label="ii"> <text>If a manufacturing corporation carries on its trade or business within and outside the State and the trade or business is a unitary business, the part of the corporation’s Maryland modified income derived from or reasonably attributable to trade or business carried on in the State shall be determined using a single sales factor apportionment formula, by multiplying its Maryland modified income by 100% of the sales factor.</text> </level> <level label="iii"> <text>In filing its tax return for each year, a manufacturing corporation shall certify that the NAICS Code reported on its Maryland return is consistent with that reported to other government agencies.</text> </level> <level label="iv"> <text>If the Comptroller determines that a corporation has submitted information that incorrectly classifies the corporation as a manufacturing corporation under subparagraph (i) of this paragraph, the Comptroller shall reclassify the corporation in an appropriate manner.</text> </level> </level> <level label="2"> <text>Except as provided in paragraphs (1) and (3) of this subsection:</text> <level label="i"> <text>for a taxable year beginning after December 31, 2017, but before January 1, 2019, if the trade or business is a unitary business, the part of the corporation’s Maryland modified income derived from or reasonably attributable to trade or business carried on in the State shall be determined using a 3–factor apportionment fraction:</text> <level label="1"> <text>the numerator of which is the sum of the property factor, the payroll factor, and 3 times the sales factor; and</text> </level> <level label="2"> <text>the denominator of which is 5;</text> </level> </level> <level label="ii"> <text>for a taxable year beginning after December 31, 2018, but before January 1, 2020, if the trade or business is a unitary business, the part of the corporation’s Maryland modified income derived from or reasonably attributable to trade or business carried on in the State shall be determined using a 3–factor apportionment fraction:</text> <level label="1"> <text>the numerator of which is the sum of the property factor, the payroll factor, and 4 times the sales factor; and</text> </level> <level label="2"> <text>the denominator of which is 6;</text> </level> </level> <level label="iii"> <text>for a taxable year beginning after December 31, 2019, but before January 1, 2021, if the trade or business is a unitary business, the part of the corporation’s Maryland modified income derived from or reasonably attributable to trade or business carried on in the State shall be determined using a 3–factor apportionment fraction:</text> <level label="1"> <text>the numerator of which is the sum of the property factor, the payroll factor, and 5 times the sales factor; and</text> </level> <level label="2"> <text>the denominator of which is 7;</text> </level> </level> <level label="iv"> <text>for a taxable year beginning after December 31, 2020, but before January 1, 2022, if the trade or business is a unitary business, the part of the corporation’s Maryland modified income derived from or reasonably attributable to trade or business carried on in the State shall be determined using a 3–factor apportionment fraction:</text> <level label="1"> <text>the numerator of which is the sum of the property factor, the payroll factor, and 6 times the sales factor; and</text> </level> <level label="2"> <text>the denominator of which is 8; and</text> </level> </level> <level label="v"> <text>for a taxable year beginning after December 31, 2021, if the trade or business is a unitary business, the part of the corporation’s Maryland modified income derived from or reasonably attributable to trade or business carried on in the State shall be determined using a single sales factor apportionment formula, by multiplying its Maryland modified income by 100% of the sales factor.</text> </level> </level> <level label="3"> <level label="i"> <text>Each year a worldwide headquartered company that filed a federal corporate income tax return for the taxable year may elect to calculate its Maryland modified income derived from or reasonably attributable to trade or business carried on in the State using a 3–factor apportionment fraction:</text> <level label="1"> <text>the numerator of which is the sum of the property factor, the payroll factor, and twice the sales factor; and</text> </level> <level label="2"> <text>the denominator of which is 4.</text> </level> </level> <level label="ii"> <text>To determine under subparagraph (i) of this paragraph the Maryland modified income of a corporation or group of corporations that is a worldwide headquartered company that filed a federal corporate income tax return for the taxable year, gross income from intangible investments, including dividends, interest, royalties, and capital gains from the sale of intangible property, shall be included in the calculation of the numerator based on the average of the property and payroll factors.</text> </level> </level> <level label="4"> <text>The property factor under paragraphs (2) and (3) of this subsection shall include:</text> <level label="i"> <text>rented and owned real property; and</text> </level> <level label="ii"> <text>tangible personal property located in the State and used in the trade or business.</text> </level> </level> </level> <level label="e"> <text>To reflect clearly the income allocable to Maryland, the Comptroller may alter, if circumstances warrant, the methods under subsections (c) and (d) of this section, including:</text> <level label="1"> <text>the use of the separate accounting method;</text> </level> <level label="2"> <text>the use of the 3–factor double weighted sales factor formula method or the single sales factor formula method;</text> </level> <level label="3"> <text>the weight of any factor in the 3–factor formula;</text> </level> <level label="4"> <text>the valuation of rented property included in the property factor; and</text> </level> <level label="5"> <text>the determination of the extent to which tangible personal property is located in the State.</text> </level> </level> </section> <section article="gtg" article_name="Tax - General" number="10-403" title_number="10" title_name="Income Tax" subtitle_number="4" subtitle_name="Special Treatment of Income"> <level label="a"> <level label="1"> <text>In this section the following words have the meanings indicated.</text> </level> <level label="2"> <level label="i"> <text>“Financial institution” means:</text> <level label="1"> <text>a credit company;</text> </level> <level label="2"> <text>except as provided in subparagraph (ii)1 of this paragraph, a finance company;</text> </level> <level label="3"> <text>an international banking facility;</text> </level> <level label="4"> <text>a loan company;</text> </level> <level label="5"> <text>a mortgage company;</text> </level> <level label="6"> <text>a safe-deposit company; and</text> </level> <level label="7"> <text>a savings and loan association.</text> </level> </level> <level label="ii"> <text>“Financial institution” does not include:</text> <level label="1"> <text>a finance company that makes loans only to farmers for agricultural purposes;</text> </level> <level label="2"> <text>a company licensed under the federal Small Business Investment Act of 1958;</text> </level> <level label="3"> <text>a corporation that elects to be taxed as a small business corporation under Subchapter S of the Internal Revenue Code;</text> </level> <level label="4"> <text>an entity that is a real estate mortgage investment conduit as defined in the Internal Revenue Code;</text> </level> <level label="5"> <text>a limited liability company; or</text> </level> <level label="6"> <text>a commercial bank, savings bank, trust company, or company that substantially competes with national banks in the State.</text> </level> </level> </level> <level label="3"> <text>“Financial institution holding company” means a financial institution whose only activities are:</text> <level label="i"> <text>the maintenance and management of intangible investments; and</text> </level> <level label="ii"> <text>the collection and distribution of income from intangible investments.</text> </level> </level> </level> <level label="b"> <text>Notwithstanding § 10-402 of this subtitle, interest received by a financial institution holding company from one of its subsidiary corporations that is a financial institution shall be allocated to this State only to the extent that the interest is derived from the trade or business of the subsidiary corporation within this State.</text> </level> </section> <section article="gtg" article_name="Tax - General" number="10-501" title_number="10" title_name="Income Tax" subtitle_number="5" subtitle_name="Accounting Period"> <text>A person who files a federal income tax return shall compute Maryland taxable income for the same annual accounting period and by the same accounting method that is used to compute the income reported on the federal return.</text> </section> <section article="gtg" article_name="Tax - General" number="10-502" title_number="10" title_name="Income Tax" subtitle_number="5" subtitle_name="Accounting Period"> <level label="a"> <text>If a person does not file a federal income tax return, the person shall compute Maryland taxable income in accordance with the cash or accrual accounting method that:</text> <level label="1"> <text>the person uses to compute income regularly in keeping the person’s books; or</text> </level> <level label="2"> <text>the Comptroller requires to reflect clearly the person’s income.</text> </level> </level> <level label="b"> <text>If a person does not file a federal income tax return, the person shall compute Maryland taxable income:</text> <level label="1"> <text>for the calendar year; or</text> </level> <level label="2"> <text>if the person keeps adequate records for an annual fiscal year accounting period, for the fiscal year.</text> </level> </level> </section> <section article="gtg" article_name="Tax - General" number="10-503" title_number="10" title_name="Income Tax" subtitle_number="5" subtitle_name="Accounting Period"> <text>The taxable year of an individual terminates on the date of death.</text> </section> <section article="gtg" article_name="Tax - General" number="10-504" title_number="10" title_name="Income Tax" subtitle_number="5" subtitle_name="Accounting Period"> <level label="a"> <text>A person may change the accounting period used to compute Maryland taxable income to any other period that the Comptroller approves.</text> </level> <level label="b"> <text>If a person changes accounting periods, the person shall file a separate return for the period between the close of the previous accounting period and the beginning of the newly adopted accounting period.</text> </level> </section> <section article="gtg" article_name="Tax - General" number="10-601" title_number="10" title_name="Income Tax" subtitle_number="6" subtitle_name="Tax Computation"> <text>Except as provided in § 10–105(d) of this title and except as otherwise provided in this subtitle, a person shall compute the State income tax by applying the tax rates in § 10–105 of this title to Maryland taxable income.</text> </section> <section article="gtg" article_name="Tax - General" number="10-602" title_number="10" title_name="Income Tax" subtitle_number="6" subtitle_name="Tax Computation"> <text>An individual shall compute the tax for a taxable year from the tax tables if the individual has Maryland taxable income equal to or less than the maximum amount provided for in the tax tables.</text> </section> <section article="gtg" article_name="Tax - General" number="10-603" title_number="10" title_name="Income Tax" subtitle_number="6" subtitle_name="Tax Computation"> <text>Unless an act that changes the State income tax rate provides otherwise, if the rate changes on a date other than the 1st day of the taxable year of a person, the person shall compute State income tax using the tax rate that applies to each part of the year.</text> </section> <section article="gtg" article_name="Tax - General" number="10-604" title_number="10" title_name="Income Tax" subtitle_number="6" subtitle_name="Tax Computation"> <text>Except as otherwise provided in this subtitle, an individual shall compute the county income tax by applying the county tax rate in § 10-106 of this title to Maryland taxable income.</text> </section> <section article="gtg" article_name="Tax - General" number="10-701" title_number="10" title_name="Income Tax" subtitle_number="7" subtitle_name="Income Tax Credits"> <text>An individual may claim a credit against the income tax for a taxable year for income tax withheld and estimated tax payments made for the year under Subtitle 9 of this title.</text> </section> <section article="gtg" article_name="Tax - General" number="10-701.1" title_number="10" title_name="Income Tax" subtitle_number="7" subtitle_name="Income Tax Credits"> <text>A member of a pass–through entity may claim a credit against the income tax for a taxable year in the amount of tax paid by a pass–through entity under § 10–102.1 of this title that is attributable to the member’s share of the pass–through entity’s taxable income, as defined in § 10–102.1(a)(8) of this title.</text> </section> <section article="gtg" article_name="Tax - General" number="10-702" title_number="10" title_name="Income Tax" subtitle_number="7" subtitle_name="Income Tax Credits"> <level label="a"> <level label="1"> <text>In this section the following words have the meanings indicated.</text> </level> <level label="2"> <level label="i"> <text>“Business entity” means:</text> <level label="1"> <text>a person conducting or operating a trade or business; or</text> </level> <level label="2"> <text>an organization that is exempt from taxation under § 501(c)(3) or (4) of the Internal Revenue Code.</text> </level> </level> <level label="ii"> <text>“Business entity” does not include a person owning, operating, developing, constructing, or rehabilitating property intended for use primarily as single or multifamily residential property located within the enterprise zone.</text> </level> </level> <level label="3"> <text>“Economically disadvantaged individual” means an individual who is certified by provisions that the Maryland Department of Labor adopts as an individual who, before becoming employed by a business entity in an enterprise zone:</text> <level label="i"> <text>was both unemployed for at least 30 consecutive days and qualified to participate in training activities for the economically disadvantaged under the federal Workforce Innovation and Opportunity Act or its successor; or</text> </level> <level label="ii"> <text>in the absence of an applicable federal act, met the criteria for an economically disadvantaged individual that the Secretary of Labor sets.</text> </level> </level> <level label="4"> <level label="i"> <text>“Enterprise zone” has the meaning stated in § 5–701 of the Economic Development Article.</text> </level> <level label="ii"> <text>“Enterprise zone” includes a Regional Institution Strategic Enterprise zone established under Title 10, Subtitle 1 of the Economic Development Article.</text> </level> </level> <level label="5"> <text>“Focus area” has the meaning stated in § 5–701 of the Economic Development Article.</text> </level> <level label="6"> <text>“Focus area employee” means an individual who:</text> <level label="i"> <text>is a new employee or an employee rehired after being laid off for more than 1 year by a business entity;</text> </level> <level label="ii"> <text>is employed by a business entity at least 35 hours each week for at least 12 months before or during the taxable year for which the entity claims a credit;</text> </level> <level label="iii"> <text>spends at least 50% of the hours under item (ii) of this paragraph either in the focus area or on activities of the business entity resulting directly from its location in the focus area;</text> </level> <level label="iv"> <text>is hired by the business entity after the later of:</text> <level label="1"> <text>the date on which the focus area is designated; or</text> </level> <level label="2"> <text>the date on which the business entity located in the focus area; and</text> </level> </level> <level label="v"> <text>earns at least 120% of the State minimum wage.</text> </level> </level> <level label="7"> <text>“Qualified employee” means an individual who:</text> <level label="i"> <text>is hired to fill a newly created position or, if the individual is an economically disadvantaged individual, is hired to fill a position previously held by another economically disadvantaged individual;</text> </level> <level label="ii"> <text>is employed by a business entity at least 35 hours each week for at least 6 months before or during the taxable year for which the entity claims a credit;</text> </level> <level label="iii"> <text>spends at least 50% of the hours under item (ii) of this paragraph, either in the enterprise zone or on activities of the business entity resulting directly from its location in the enterprise zone;</text> </level> <level label="iv"> <text>earns at least 120% of the State minimum wage; and</text> </level> <level label="v"> <text>is hired by the business entity after the later of:</text> <level label="1"> <text>the date on which the enterprise zone is designated; or</text> </level> <level label="2"> <text>the date on which the business entity locates in the enterprise zone.</text> </level> </level> </level> </level> <level label="b"> <level label="1"> <text>Any business entity that is located in an enterprise zone and satisfies the requirements of § 5–707 of the Economic Development Article may claim a credit only against the State income tax for the wages specified in subsections (c) and (d) of this section that are paid in the taxable year for which the entity claims the credit.</text> </level> <level label="2"> <text>A business entity that is located in a focus area and satisfies the requirements of § 5–707 of the Economic Development Article may claim a credit only against the State income tax for the wages specified in subsection (e) of this section that are paid to a focus area employee in the taxable year for which the entity claims the credit.</text> </level> <level label="3"> <text>An organization that is exempt from taxation under § 501(c)(3) or (4) of the Internal Revenue Code may apply the credit under this section as a credit against income tax due on unrelated business taxable income as provided under §§ 10–304 and 10–812 of this title.</text> </level> </level> <level label="c"> <text>If a business entity does not claim an enhanced tax credit under subsection (e) of this section for a focus area employee, for the taxable year in which a business entity satisfies the requirements of § 5–707 or § 10–142 of the Economic Development Article, a credit is allowed that equals:</text> <level label="1"> <text>up to $3,000 of the wages paid to each qualified employee who:</text> <level label="i"> <text>is an economically disadvantaged individual; and</text> </level> <level label="ii"> <text>is not hired to replace an individual whom the business entity employed in that or any of the 3 preceding taxable years; and</text> </level> </level> <level label="2"> <text>up to $1,000 of the wages paid to each qualified employee who:</text> <level label="i"> <text>is not an economically disadvantaged individual; and</text> </level> <level label="ii"> <text>is not hired to replace an individual whom the business entity employed in that or any of the 3 preceding taxable years.</text> </level> </level> </level> <level label="d"> <level label="1"> <text>If a business entity does not claim an enhanced tax credit under subsection (e) of this section for a focus area employee, for each taxable year after the taxable year described in subsection (c) of this section, while the area is designated an enterprise zone, a credit is allowed that equals:</text> <level label="i"> <text>up to $3,000 of the wages paid to each qualified employee who:</text> <level label="1"> <text>is an economically disadvantaged individual;</text> </level> <level label="2"> <text>became a qualified employee during the taxable year to which the credit applies; and</text> </level> <level label="3"> <text>is not hired to replace an individual whom the business entity employed in that or any of the 3 preceding taxable years;</text> </level> </level> <level label="ii"> <text>up to $2,000 of the wages paid to each qualified employee who is an economically disadvantaged individual, if the business entity received a credit under subsection (c)(1) of this section for the qualified employee in the immediately preceding taxable year; and</text> </level> <level label="iii"> <text>up to $1,000 of the wages paid to each qualified employee who is not hired to replace an individual whom the business entity employed in that or any of the 3 preceding taxable years if the qualified employee:</text> <level label="1"> <text>is an economically disadvantaged individual for whom the business entity received a credit under subsection (c)(1) of this section or item (i) of this paragraph and a credit under item (ii) of this paragraph in the 2 immediately preceding taxable years; or</text> </level> <level label="2"> <text>is not an economically disadvantaged individual but became a qualified employee during the taxable year to which the credit applies.</text> </level> </level> </level> <level label="2"> <text>A business entity that hires a qualified employee to replace another qualified employee for whom the business entity received a credit under subsection (c)(1) of this section and paragraph (1)(ii) of this subsection in the immediately preceding taxable year may treat the new qualified employee as the replacement for the other qualified employee to determine any credit that may be available to the business entity under paragraph (1)(ii) or (iii) of this subsection.</text> </level> </level> <level label="e"> <level label="1"> <text>For the taxable year in which a business entity satisfies the requirements of §§ 5–706 and 5–707 or § 10–142 of the Economic Development Article, a credit is allowed that equals:</text> <level label="i"> <text>up to $4,500 of the wages paid to each focus area employee who:</text> <level label="1"> <text>is an economically disadvantaged individual; and</text> </level> <level label="2"> <text>is not hired to replace an individual whom the business entity employed in that year or any of the 3 preceding taxable years; and</text> </level> </level> <level label="ii"> <text>up to $1,500 of the wages paid to each focus area employee who:</text> <level label="1"> <text>is not an economically disadvantaged individual; and</text> </level> <level label="2"> <text>is not hired to replace an individual whom the business entity employed in that year or any of the 3 preceding taxable years.</text> </level> </level> </level> <level label="2"> <text>For each taxable year after the taxable year described in paragraph (1) of this subsection, while the area is designated a focus area, a credit is allowed that equals:</text> <level label="i"> <text>up to $4,500 of the wages paid to each focus area employee who:</text> <level label="1"> <text>is an economically disadvantaged individual;</text> </level> <level label="2"> <text>became a focus area employee during the taxable year to which the credit applies; and</text> </level> <level label="3"> <text>is not hired to replace an individual whom the business entity employed in that year or any of the 3 preceding taxable years;</text> </level> </level> <level label="ii"> <text>up to $3,000 of the wages paid to each focus area employee who is an economically disadvantaged individual, if the business entity received a credit under paragraph (1)(i) of this subsection for the focus area employee in the immediately preceding taxable year; and</text> </level> <level label="iii"> <text>up to $1,500 of the wages paid to each focus area employee who is not hired to replace an individual whom the business entity employed in that year or any of the 3 preceding taxable years if the focus area employee:</text> <level label="1"> <text>is an economically disadvantaged individual for whom the business entity received a credit under item (ii) of this paragraph in the 2 immediately preceding taxable years and under:</text> </level> <level label="A"> <text>paragraph (1)(i) of this subsection; or</text> </level> <level label="B"> <text>item (i) of this paragraph; or</text> </level> <level label="2"> <text>is not an economically disadvantaged individual but became a focus area employee during the taxable year to which the credit applies.</text> </level> </level> </level> <level label="3"> <text>A business entity that hires a focus area employee to replace another focus area employee for whom the business entity received a credit under paragraph (1)(i) of this subsection and paragraph (2)(ii) of this subsection in the immediately preceding taxable year may treat the focus area employee as the replacement for the other focus area employee to determine any credit that may be available to the business entity under paragraph (2)(ii) or (iii) of this subsection.</text> </level> </level> <level label="f"> <text>If the credit allowed under this section in any taxable year exceeds the State income tax for that taxable year, a business entity may apply the excess as a credit against the State income tax for succeeding taxable years until the earlier of:</text> <level label="1"> <text>the full amount of the excess is used; or</text> </level> <level label="2"> <text>the expiration of the 5th taxable year from the date on which the business entity hired the qualified employee to whom the credit first applies.</text> </level> </level> <level label="g"> <text>If a credit is claimed under this section, the claimant must make the addition required in § 10–205, § 10–206, or § 10–306 of this title.</text> </level> </section> <section article="gtg" article_name="Tax - General" number="10-703" title_number="10" title_name="Income Tax" subtitle_number="7" subtitle_name="Income Tax Credits"> <level label="a"> <text>In this section, “member” and “pass–through entity” have the meanings stated in § 10–102.1 of this title.</text> </level> <level label="b"> <text>Except as provided in subsection (c) of this section, a resident may claim a credit against the income tax for a taxable year in the amount determined under subsection (d) of this section for State tax on income paid to another state for the year.</text> </level> <level label="c"> <text>A credit under subsection (b) of this section is not allowed to:</text> <level label="1"> <text>a resident other than a fiduciary, if the laws of the other state allow the resident a credit for State income tax paid to this State;</text> </level> <level label="2"> <text>a resident fiduciary, if the fiduciary claims, and the other state allows, a credit for State income tax paid to this State;</text> </level> <level label="3"> <text>a resident for less than the full taxable year for tax on income that is paid to another state during residency in that state; or</text> </level> <level label="4"> <text>a nonresident.</text> </level> </level> <level label="d"> <level label="1"> <text>Except as provided in paragraph (2) of this subsection and subject to subsection (e) of this section, the credit allowed a resident under subsection (b) of this section is the lesser of:</text> <level label="i"> <text>the amount of allowable tax on income that the resident paid to another state; or</text> </level> <level label="ii"> <text>an amount that does not reduce the income tax to an amount less than would be payable if the income subjected to tax in the other state were disregarded.</text> </level> </level> <level label="2"> <text>If the credit allowed a resident under subsection (b) of this section is based on tax that a pass–through entity pays to another state, the credit allowable to a member of the pass–through entity:</text> <level label="i"> <text>may not exceed that member’s pro rata share of the tax; and</text> </level> <level label="ii"> <text>will be allowed for another state’s income taxes or taxes based on income.</text> </level> </level> </level> <level label="e"> <level label="1"> <text>The amount of the credit allowed under subsection (b) of this section to be applied against the State income tax is equal to the amount that would be calculated under subsection (d) of this section using the State income tax rate as the only applicable rate.</text> </level> <level label="2"> <text>The amount of the credit allowed under subsection (b) of this section to be applied against the county income tax is equal to the amount calculated under subsection (d) of this section less the amount calculated under paragraph (1) of this subsection.</text> </level> </level> </section> <section article="gtg" article_name="Tax - General" number="10-703.2" title_number="10" title_name="Income Tax" subtitle_number="7" subtitle_name="Income Tax Credits"> <level label="a"> <text>In this section, “installment sale” has the meaning stated in § 453(b) of the Internal Revenue Code.</text> </level> <level label="b"> <text>A credit against the State income tax in the amount determined under subsection (c) of this section may be claimed by a resident who recognizes income for the current taxable year for federal income tax purposes from an installment sale of property located in a state other than Maryland if:</text> <level label="1"> <text>the disposition of the property occurred in an earlier taxable year; and</text> </level> <level label="2"> <text>the taxpayer paid state tax on income for the earlier taxable year to the state where the property was located on the income that for federal income tax purposes is recognized in the current taxable year.</text> </level> </level> <level label="c"> <text>The amount of the credit allowed under this section is equal to the income recognized for federal income tax purposes for the current year on which state income tax was paid to another state in an earlier year, as described in subsection (b)(2) of this section, multiplied by the lesser of:</text> <level label="1"> <text>the rate of tax imposed by the other state on the income described in subsection (b)(2) of this section; or</text> </level> <level label="2"> <text>the maximum rate of Maryland State income tax.</text> </level> </level> </section> <section article="gtg" article_name="Tax - General" number="10-704" title_number="10" title_name="Income Tax" subtitle_number="7" subtitle_name="Income Tax Credits"> <level label="a"> <level label="1"> <text>In this section the following words have the meanings indicated.</text> </level> <level label="2"> <text>“Applicable county income tax rate” means:</text> <level label="i"> <text>if a county imposes a marginal income tax rate, the county’s lowest marginal income tax rate for the taxable year; or</text> </level> <level label="ii"> <text>if a county imposes one or more flat income tax rates, the county income tax rate for the taxable year that is applicable to the taxpayer’s income level and filing status as established by the county.</text> </level> </level> <level label="3"> <text>“Taxpayer” means:</text> <level label="i"> <text>an individual filing an income tax return; or</text> </level> <level label="ii"> <text>a married couple filing a joint income tax return.</text> </level> </level> </level> <level label="b"> <level label="1"> <text>A resident who is a taxpayer may claim a credit against the State income tax for a taxable year in the amount determined under subsection (c) of this section for earned income.</text> </level> <level label="2"> <text>A resident who is a taxpayer may claim a credit against the county income tax for a taxable year in the amount determined under subsection (d) of this section for earned income.</text> </level> </level> <level label="c"> <level label="1"> <text>Except as provided in paragraphs (2) and (3) of this subsection and subject to subsection (e) of this section, the credit allowed against the State income tax under subsection (b)(1) of this section is the lesser of:</text> <level label="i"> <text>50% of the earned income credit allowable for the taxable year under § 32 of the Internal Revenue Code or that would have been allowable but for the limitation under § 32(m) of the Internal Revenue Code; or</text> </level> <level label="ii"> <text>the State income tax for the taxable year.</text> </level> </level> <level label="2"> <level label="i"> <text>Subject to subparagraph (iii) of this paragraph and subsection (e) of this section, a resident may claim a refund in the amount, if any, by which the applicable percentage specified in subparagraph (ii) of this paragraph of the earned income credit allowable for the taxable year under § 32 of the Internal Revenue Code exceeds the State income tax for the taxable year.</text> </level> <level label="ii"> <text>Subject to subparagraph (iii) of this paragraph, the applicable percentage of the earned income credit allowable under § 32 of the Internal Revenue Code to be used for purposes of determining the refund provided under this paragraph is:</text> <level label="1"> <text>25% for a taxable year beginning after December 31, 2013, but before January 1, 2015;</text> </level> <level label="2"> <level label="25"> <text>5% for a taxable year beginning after December 31, 2014, but before January 1, 2016;</text> </level> </level> <level label="3"> <text>26% for a taxable year beginning after December 31, 2015, but before January 1, 2017;</text> </level> <level label="4"> <text>27% for a taxable year beginning after December 31, 2016, but before January 1, 2018;</text> </level> <level label="5"> <text>28% for a taxable year beginning after December 31, 2017, but before January 1, 2020; and</text> </level> <level label="6"> <text>45% for a taxable year beginning after December 31, 2019.</text> </level> </level> <level label="iii"> <text>For purposes of determining the refund provided under this paragraph, the earned income credit allowable under § 32 of the Internal Revenue Code is calculated without regard to the limitation under § 32(m) of the Internal Revenue Code.</text> </level> </level> <level label="3"> <level label="i"> <text>For purposes of this section for an individual without a qualifying child, the credit allowable for a taxable year under § 32 of the Internal Revenue Code is calculated without regard to:</text> <level label="1"> <text>the minimum age requirement under § 32(c)(1)(A)(ii)(II) of the Internal Revenue Code; or</text> </level> <level label="2"> <text>the limitation under § 32(m) of the Internal Revenue Code.</text> </level> </level> <level label="ii"> <text>Subject to subparagraph (iii) of this paragraph, the credit allowed against the State income tax under subsection (b)(1) of this section for an individual without a qualifying child is equal to 100% of the earned income credit allowable for a taxable year under § 32 of the Internal Revenue Code.</text> </level> <level label="iii"> <text>For a taxable year beginning after December 31, 2019, but before January 1, 2023, the tax credit allowed under this paragraph may not exceed $530 for a taxable year.</text> </level> <level label="iv"> <text>If the tax credit allowed under this paragraph in any taxable year exceeds the total tax otherwise payable by the individual without a qualifying child for that taxable year, the individual may claim a refund in the amount of the excess.</text> </level> </level> </level> <level label="d"> <level label="1"> <text>Except as provided in paragraph (2) of this subsection and subject to subsection (e) of this section, the credit allowed against the county income tax under subsection (b)(2) of this section is the lesser of:</text> <level label="i"> <text>the earned income credit allowable for the taxable year under § 32 of the Internal Revenue Code or that would have been allowable but for the limitation under § 32(m) of the Internal Revenue Code multiplied by 10 times the applicable county income tax rate for the taxable year; or</text> </level> <level label="ii"> <text>the county income tax for the taxable year.</text> </level> </level> <level label="2"> <level label="i"> <text>A county may provide, by law, for a refundable county earned income credit as provided in this paragraph.</text> </level> <level label="ii"> <text>If a county provides for a refundable county earned income credit under this paragraph, on or before July 1 prior to the beginning of the first taxable year for which it is applicable, the county shall give the Comptroller notice of the refundable county earned income credit.</text> </level> <level label="iii"> <text>If a county provides for a refundable county earned income credit under this paragraph, a resident may claim a refund of the amount, if any, by which the product of multiplying the credit allowable for the taxable year under § 32 of the Internal Revenue Code or that would have been allowable but for the limitation under § 32(m) of the Internal Revenue Code by 5 times the applicable county income tax rate for the taxable year exceeds the county income tax for the taxable year.</text> </level> <level label="iv"> <text>The amount of any refunds payable under a refundable county earned income credit operates to reduce the income tax revenue from individuals attributable to the county income tax for that county.</text> </level> </level> </level> <level label="e"> <level label="1"> <text>Subject to paragraph (2) of this subsection, for an individual who is a resident of the State for only a part of the year, the amount of the credit or refund allowed under this section shall be determined based on the part of the earned income credit allowable for the taxable year under § 32 of the Internal Revenue Code that is attributable to Maryland, determined by multiplying the federal earned income credit by a fraction:</text> <level label="i"> <text>the numerator of which is the Maryland adjusted gross income of the individual; and</text> </level> <level label="ii"> <text>the denominator of which is the federal adjusted gross income of the individual.</text> </level> </level> <level label="2"> <text>For purposes of determining the amount of the credit or refund under paragraph (1) of this subsection, the part of the earned income credit allowable for the taxable year under § 32 of the Internal Revenue Code is calculated without regard to the limitation under § 32(m) of the Internal Revenue Code.</text> </level> </level> </section> <section article="gtg" article_name="Tax - General" number="10-704.1" title_number="10" title_name="Income Tax" subtitle_number="7" subtitle_name="Income Tax Credits"> <level label="a"> <level label="1"> <text>In this section the following words have the meanings indicated.</text> </level> <level label="2"> <text>“Cogenerator” means a qualifying cogenerator or qualifying small power producer as determined by the Federal Energy Regulatory Commission under the Public Utility Regulatory Policies Act of 1978.</text> </level> <level label="3"> <text>“Electricity supplier” has the meaning stated in § 1–101 of the Public Utilities Article.</text> </level> </level> <level label="b"> <text>This section does not apply to:</text> <level label="1"> <text>a cogenerator or electricity supplier that is subject to the public service company franchise tax; or</text> </level> <level label="2"> <text>an electricity supplier that, before July 1, 1999, was not an electric company as defined in § 1–101 of the Public Utilities Article as in effect on June 30, 1999, unless the electricity supplier is an affiliate of such an electric company.</text> </level> </level> <level label="c"> <text>Subject to the limitations in § 8–406(b)(2) of this article, a cogenerator or electricity supplier may claim a credit against the State income tax in the amount of $3 for each ton of Maryland–mined coal that the cogenerator or electricity supplier purchased in the taxable year.</text> </level> <level label="d"> <level label="1"> <text>A cogenerator or electricity supplier may only apply the credit against the State income tax for the taxable year in which the credit was earned.</text> </level> <level label="2"> <text>The amount of the credit may not exceed the State income tax for that taxable year.</text> </level> <level label="3"> <text>The total amount of credits approved under this section shall be subject to the limitations in § 8–406(b)(2)(iv), (v), and (vi) of this article.</text> </level> </level> <level label="e"> <text>A cogenerator or electricity supplier shall submit an application in accordance with § 8–406(b)(2)(iii) of this article in order to claim the credit available under this section.</text> </level> </section> <section article="gtg" article_name="Tax - General" number="10-704.4" title_number="10" title_name="Income Tax" subtitle_number="7" subtitle_name="Income Tax Credits"> <text>An individual or a corporation may claim a credit against the income tax for wages paid to qualified employees as provided under Title 6, Subtitle 3 of the Economic Development Article.</text> </section> <section article="gtg" article_name="Tax - General" number="10-704.5" title_number="10" title_name="Income Tax" subtitle_number="7" subtitle_name="Income Tax Credits"> <level label="a"> <text>An individual or corporation may claim a credit against the State income tax for a certified rehabilitation as provided under § 5A-303 of the State Finance and Procurement Article.</text> </level> <level label="b"> <text>An individual or corporation that is not otherwise required to file an income tax return, including a corporation exempt from income tax under § 501(c)(3) of the Internal Revenue Code:</text> <level label="1"> <text>may file a return to claim a refund of the credit under this section; and</text> </level> <level label="2"> <text>shall file a return if the individual or corporation is subject to the recapture of the credit under this section as provided under § 5A-303 of the State Finance and Procurement Article.</text> </level> </level> </section> <section article="gtg" article_name="Tax - General" number="10-704.6" title_number="10" title_name="Income Tax" subtitle_number="7" subtitle_name="Income Tax Credits"> <text>An individual or a corporation may claim a credit against the State income tax for neighborhood and community assistance contributions as provided under § 6-404 of the Housing and Community Development Article.</text> </section> <section article="gtg" article_name="Tax - General" number="10-704.7" title_number="10" title_name="Income Tax" subtitle_number="7" subtitle_name="Income Tax Credits"> <level label="a"> <text>An individual or a corporation may claim a credit against the income tax for:</text> <level label="1"> <text>wages paid to a qualified employee with a disability; and</text> </level> <level label="2"> <level label="i"> <text>child care provided or paid for by a business entity for the children of a qualified employee with a disability as provided under § 21–309 of the Education Article; or</text> </level> <level label="ii"> <text>transportation provided or paid for by the business entity for a qualified employee with a disability as provided under § 21–309 of the Education Article.</text> </level> </level> </level> <level label="b"> <level label="1"> <text>An organization that is exempt from taxation under § 501(c)(3) or (4) of the Internal Revenue Code may apply the credit under this section:</text> <level label="i"> <text>as a credit against income tax due on unrelated business taxable income as provided under §§ 10–304 and 10–812 of this title; or</text> </level> <level label="ii"> <text>as a credit for the payment to the Comptroller of taxes that the organization:</text> <level label="1"> <text>is required to withhold from the wages of employees under § 10–908 of this title; and</text> </level> <level label="2"> <text>is required to pay to the Comptroller under § 10–906(a) of this title.</text> </level> </level> </level> <level label="2"> <text>If the credit allowed under this subsection in any taxable year exceeds the sum of the State income tax otherwise payable by the organization for that taxable year and the taxes that the organization has withheld from the wages of employees and is required to pay to the Comptroller under § 10–906(a) of this title for the taxable year, the organization may apply the excess as a credit under paragraph (1)(i) or (ii) of this subsection in succeeding taxable years for the carryforward period provided in § 21–309 of the Education Article.</text> </level> <level label="3"> <text>The Comptroller shall adopt regulations to provide procedures for claiming and applying credits authorized under paragraph (1)(ii) of this subsection.</text> </level> </level> </section> <section article="gtg" article_name="Tax - General" number="10-704.8" title_number="10" title_name="Income Tax" subtitle_number="7" subtitle_name="Income Tax Credits"> <text>An individual or a corporation may claim a State tax credit against the income tax as provided under § 9-230 of the Tax - Property Article.</text> </section> <section article="gtg" article_name="Tax - General" number="10-705" title_number="10" title_name="Income Tax" subtitle_number="7" subtitle_name="Income Tax Credits"> <text>To be allowed a credit under this subtitle, a person shall submit to the Comptroller satisfactory evidence that the person is entitled to the credit.</text> </section> <section article="gtg" article_name="Tax - General" number="10-706" title_number="10" title_name="Income Tax" subtitle_number="7" subtitle_name="Income Tax Credits"> <level label="a"> <text>Except as otherwise provided in this section, a credit allowed under this subtitle is allowed against the State income tax only.</text> </level> <level label="b"> <text>A credit under § 10–701 of this subtitle is allowed against the total county and State income taxes.</text> </level> <level label="c"> <level label="1"> <text>A credit allowed under § 10–704(b)(1) or § 10–709(b)(1) of this subtitle is allowed against the State income tax only.</text> </level> <level label="2"> <text>A credit allowed under § 10–704(b)(2) or § 10–709(b)(2) of this subtitle is allowed against the county income tax only.</text> </level> </level> </section> <section article="gtg" article_name="Tax - General" number="10-707" title_number="10" title_name="Income Tax" subtitle_number="7" subtitle_name="Income Tax Credits"> <level label="a"> <text>An individual may claim a credit against the State income tax for a taxable year in the amount specified in subsection (b) of this section for property tax paid in that taxable year for owner-occupied, residential real property that is granted a property tax credit under § 9-317(e), § 9-318(d), or § 9-326 of the Tax - Property Article.</text> </level> <level label="b"> <text>The credit shall equal the amount of the property tax credit granted for property tax paid under § 9-317(e), § 9-318(d), or § 9-326 of the Tax - Property Article.</text> </level> <level label="c"> <text>If the credit allowed under this section in any taxable year exceeds the State income tax for that taxable year, calculated before application of the credits under this section and §§ 10-701 and 10-701.1 of this subtitle, but after application of the other credits allowable under this subtitle, the excess of the credit shall be refunded.</text> </level> </section> <section article="gtg" article_name="Tax - General" number="10-709" title_number="10" title_name="Income Tax" subtitle_number="7" subtitle_name="Income Tax Credits"> <level label="a"> <level label="1"> <text>In this section the following words have the meanings indicated.</text> </level> <level label="2"> <text>“Applicable poverty income level” means the amount specified in the poverty income standard that corresponds to the number of exemptions which the individual is allowed and claims under § 10–211(b)(1) of this title.</text> </level> <level label="3"> <text>“Eligible low income taxpayer” means an individual, or an individual and the individual’s spouse if they file a joint income tax return:</text> <level label="i"> <text>whose federal adjusted gross income as modified under §§ 10–204 through 10–206 of this title does not exceed the applicable poverty income level;</text> </level> <level label="ii"> <text>whose earned income as defined under § 32(c)(2) of the Internal Revenue Code does not exceed the applicable poverty income level;</text> </level> <level label="iii"> <text>who is not claimed as an exemption on another individual’s tax return under § 10–211 of this title; and</text> </level> <level label="iv"> <text>for whom the credit allowed under § 10–704(a)(1) of this subtitle is less than the State income tax.</text> </level> </level> <level label="4"> <text>“Poverty income standard” means the most recent poverty income guideline published by the United States Department of Health and Human Services, available as of July 1 of the taxable year.</text> </level> </level> <level label="b"> <level label="1"> <text>An eligible low income taxpayer may claim a credit against the State income tax for a taxable year in the amount determined under subsection (c) of this section.</text> </level> <level label="2"> <text>An eligible low income taxpayer may claim a credit against the county income tax for a taxable year in the amount determined under subsection (d) of this section.</text> </level> </level> <level label="c"> <text>Except as provided in subsection (e) of this section, the credit allowed against the State income tax under subsection (b)(1) of this section equals the lesser of:</text> <level label="1"> <text>the State income tax determined after subtracting the credit allowed under § 10–704(b)(1) of this subtitle; or</text> </level> <level label="2"> <text>an amount equal to 5% of the eligible low income taxpayer’s earned income, as defined under § 32(c)(2) of the Internal Revenue Code.</text> </level> </level> <level label="d"> <text>Except as provided in subsection (e) of this section, the credit allowed against the county income tax under subsection (b)(2) of this section equals the lesser of:</text> <level label="1"> <text>the county income tax determined after subtracting the credit allowed under § 10–704(d) of this subtitle; or</text> </level> <level label="2"> <text>an amount equal to the county income tax rate multiplied times the eligible low income taxpayer’s earned income, as defined under § 32(c)(2) of the Internal Revenue Code.</text> </level> </level> <level label="e"> <text>Of the amount determined under subsection (c) or subsection (d) of this section, an individual who is a nonresident or is a resident of the State for only a part of the year is allowed only a fraction:</text> <level label="1"> <text>the numerator of which is the individual’s Maryland adjusted gross income; and</text> </level> <level label="2"> <text>the denominator of which is the individual’s federal adjusted gross income.</text> </level> </level> </section> <section article="gtg" article_name="Tax - General" number="10-710" title_number="10" title_name="Income Tax" subtitle_number="7" subtitle_name="Income Tax Credits"> <level label="a"> <text>In this section, “long-term care insurance” has the meaning stated in § 18-101 of the Insurance Article.</text> </level> <level label="b"> <level label="1"> <text>Subject to the limitation under paragraph (2) of this subsection, an employer may claim a tax credit in an amount equal to 5% of the costs incurred by the employer during the taxable year to provide long-term care insurance as part of an employee benefit package.</text> </level> <level label="2"> <text>The credit allowed under this section may not exceed the lesser of:</text> <level label="i"> <text>$5,000; or</text> </level> <level label="ii"> <text>$100 for each employee in the State covered by long-term care insurance provided under the employee benefit package.</text> </level> </level> </level> <level label="c"> <level label="1"> <text>An individual or corporation may apply the credit under subsection (b) of this section against the State income tax.</text> </level> <level label="2"> <text>An organization that is exempt from taxation under § 501(c)(3) or (4) of the Internal Revenue Code may apply the credit under this section against State income tax due on unrelated business taxable income as provided under §§ 10-304 and 10-812 of this title.</text> </level> </level> <level label="d"> <level label="1"> <text>If the employer is subject to more than one tax against which the credit allowed under this section may be applied, the same credit may not be applied more than once against different taxes.</text> </level> <level label="2"> <text>If the credit allowed under this subsection in any taxable year exceeds the total tax otherwise payable by the employer for that taxable year, the employer may apply the excess as a credit for succeeding taxable years until the earlier of:</text> <level label="i"> <text>the full amount of the excess is used; or</text> </level> <level label="ii"> <text>the expiration of the 5th taxable year after the taxable year in which the costs to provide long-term care insurance as part of an employee benefit package were incurred.</text> </level> </level> </level> </section> <section article="gtg" article_name="Tax - General" number="10-714" title_number="10" title_name="Income Tax" subtitle_number="7" subtitle_name="Income Tax Credits"> <text>An individual or corporation may claim a credit against the State income tax for One Maryland project costs and start–up costs as provided under Title 6, Subtitle 4 of the Economic Development Article.</text> </section> <section article="gtg" article_name="Tax - General" number="10-715" title_number="10" title_name="Income Tax" subtitle_number="7" subtitle_name="Income Tax Credits"> <level label="a"> <text>An individual or corporation may claim a credit against the State income tax for the cost of providing commuter benefits to the business entity’s employees as provided under § 2-901 of the Environment Article.</text> </level> <level label="b"> <text>An organization that is exempt from taxation under § 501(c)(3) or (4) of the Internal Revenue Code may apply the credit under this section as a credit for the payment to the Comptroller of taxes that the organization:</text> <level label="1"> <text>is required to withhold from the wages of employees under § 10-908 of this title; and</text> </level> <level label="2"> <text>is required to pay to the Comptroller under § 10-906(a) of this title.</text> </level> </level> </section> <section article="gtg" article_name="Tax - General" number="10-716" title_number="10" title_name="Income Tax" subtitle_number="7" subtitle_name="Income Tax Credits"> <level label="a"> <level label="1"> <text>In this section the following words have the meanings indicated.</text> </level> <level label="2"> <text>“Federal child and dependent care credit” means the child and dependent care credit properly claimed by an individual for the taxable year under § 21 of the Internal Revenue Code.</text> </level> <level label="3"> <text>“Qualifying individual” means a qualifying individual within the meaning of § 21(b) of the Internal Revenue Code.</text> </level> <level label="4"> <text>“Taxpayer” means:</text> <level label="i"> <text>an individual filing an income tax return; or</text> </level> <level label="ii"> <text>a married couple filing a joint income tax return.</text> </level> </level> </level> <level label="b"> <text>A resident who is a taxpayer may claim a credit against the State income tax as provided in this section for expenses paid by the taxpayer during a taxable year for the care of a qualifying individual if the federal adjusted gross income of the taxpayer for the taxable year does not exceed:</text> <level label="1"> <text>$92,000, in the case of an individual; or</text> </level> <level label="2"> <text>$143,000, in the case of a married couple filing a joint income tax return.</text> </level> </level> <level label="c"> <text>Subject to subsection (d) of this section and except as provided in subsection (e) of this section, the credit allowed under subsection (b) of this section equals the lesser of:</text> <level label="1"> <text>32% of the federal child and dependent care credit; or</text> </level> <level label="2"> <text>the State income tax for the taxable year.</text> </level> </level> <level label="d"> <level label="1"> <text>If the federal adjusted gross income of a taxpayer filing an individual return for the taxable year exceeds $30,000, the credit otherwise allowed under this section shall be reduced by 1% for each $2,000 or fraction of $2,000 by which the individual’s federal adjusted gross income exceeds $30,000.</text> </level> <level label="2"> <text>In the case of an individual who is a member of a married couple filing a joint income tax return, if the individual’s federal adjusted gross income for the taxable year exceeds $50,000, the credit otherwise allowed under this section shall be reduced by 1% for each $3,000 or fraction of $3,000 by which the individual’s federal adjusted gross income exceeds $50,000.</text> </level> </level> <level label="e"> <text>If the credit allowed under this section in any taxable year exceeds the State income tax for that taxable year, the taxpayer may claim a refund in the amount of the excess if the taxpayer’s federal adjusted gross income does not exceed:</text> <level label="1"> <text>$50,000 in the case of an individual; or</text> </level> <level label="2"> <text>$75,000 in the case of a married couple filing a joint income tax return.</text> </level> </level> <level label="f"> <level label="1"> <text>For each taxable year beginning after December 31, 2019, the maximum income thresholds under subsection (b) of this section and the maximum income thresholds under subsection (e) of this section shall be increased by an amount equal to the product of the maximum income thresholds and the cost–of–living adjustment specified in this subsection.</text> </level> <level label="2"> <text>For purposes of this subsection, the cost–of–living adjustment is the cost–of–living adjustment within the meaning of § 1(f)(3) of the Internal Revenue Code for the calendar year in which a taxable year begins, as determined by the Comptroller, by substituting “calendar year 2018” for “calendar year 2016” in § 1(f)(3)(A) of the Internal Revenue Code.</text> </level> <level label="3"> <text>If any increase determined under paragraph (1) of this subsection is not a multiple of $50, the increase shall be rounded down to the next lowest multiple of $50.</text> </level> </level> <level label="g"> <text>The credit allowed under this section does not affect the treatment under this title of any deduction or exclusion allowed under this title or allowed for federal income tax purposes for expenses paid by the taxpayer for the care of a qualifying individual.</text> </level> </section> <section article="gtg" article_name="Tax - General" number="10-717" title_number="10" title_name="Income Tax" subtitle_number="7" subtitle_name="Income Tax Credits"> <level label="a"> <text>An individual who is a classroom teacher or a teacher at a State or local correctional facility or a juvenile facility listed in § 9–226 of the Human Services Article and who holds a standard professional certificate or an advanced professional certificate may claim a credit against the State income tax for up to $1,500 of tuition paid by the individual during the taxable year for graduate level courses required to maintain certification if the individual:</text> <level label="1"> <text>successfully completes the courses with a grade of B or better;</text> </level> <level label="2"> <text>is employed by a county board of education, a State or local correctional facility, or a juvenile facility listed in § 9–226 of the Human Services Article;</text> </level> <level label="3"> <text>teaches in a public school, a State or local correctional facility, or a juvenile facility listed in § 9–226 of the Human Services Article and receives a satisfactory performance evaluation for that teaching; and</text> </level> <level label="4"> <text>has not been reimbursed by the State or a county for the tuition paid.</text> </level> </level> <level label="b"> <level label="1"> <text>If a county, the State or local correctional facility, or a juvenile facility listed in § 9–226 of the Human Services Article partially reimburses an individual for tuition paid, the individual may claim a tax credit allowed under this section for the balance of the tuition not paid by the county or the State.</text> </level> <level label="2"> <text>The credit allowed under this section may not exceed the State income tax for that taxable year, calculated before the application of the credits allowed under this section and §§ 10–701 and 10–701.1 of this subtitle but after the application of the other credits allowable under this subtitle.</text> </level> <level label="3"> <text>The unused amount of the credit for any taxable year may not be carried over to any other taxable year.</text> </level> </level> </section> <section article="gtg" article_name="Tax - General" number="10-718" title_number="10" title_name="Income Tax" subtitle_number="7" subtitle_name="Income Tax Credits"> <level label="a"> <text>In this section, “eligible long–term care premiums” means eligible long–term care premiums within the meaning of § 213(d)(10) of the Internal Revenue Code for a long–term care insurance contract covering an individual who is a Maryland resident.</text> </level> <level label="b"> <text>An individual may claim a credit against the State income tax in an amount equal to 100% of the eligible long–term care premiums paid by the individual during the taxable year for long–term care insurance covering the individual or the individual’s spouse, parent, stepparent, child, or stepchild.</text> </level> <level label="c"> <text>The credit allowed under this section:</text> <level label="1"> <text>may not exceed $500 for each insured covered by long–term care insurance for which the individual pays the premiums;</text> </level> <level label="2"> <text>may not be claimed by more than one taxpayer with respect to the same insured individual; and</text> </level> <level label="3"> <text>may not be claimed with respect to an insured individual if:</text> <level label="i"> <text>the insured individual was covered by long–term care insurance at any time before July 1, 2000; or</text> </level> <level label="ii"> <text>the credit has been claimed with respect to that insured individual by any taxpayer for any prior taxable year.</text> </level> </level> </level> <level label="d"> <level label="1"> <text>The total amount of the credit allowed under this section for any taxable year may not exceed the State income tax for that taxable year, calculated before application of the credits under this section and §§ 10–701 and 10–701.1 of this subtitle, but after application of the other credits allowable under this subtitle.</text> </level> <level label="2"> <text>The unused amount of the credit for any taxable year may not be carried over to any other taxable year.</text> </level> </level> <level label="e"> <text>The credit allowed under this section does not affect the treatment under this title of any deduction or exclusion allowed for federal income tax purposes for the eligible long–term care premiums paid by the individual.</text> </level> <level label="f"> <text>On or before December 1, 2005, and each December 1 thereafter, the Comptroller shall report to the Governor and, subject to § 2–1257 of the State Government Article, to the General Assembly, regarding the credit allowed under this section, including:</text> <level label="1"> <text>the number of individuals who have claimed the credit, the amount allowed as credits, and the additional number of individuals covered by long–term care insurance as a result of the credit; and</text> </level> <level label="2"> <text>the savings under the State’s Medical Assistance Program as a result of additional individuals being covered by long–term care insurance as a result of the credit.</text> </level> </level> </section> <section article="gtg" article_name="Tax - General" number="10-720" title_number="10" title_name="Income Tax" subtitle_number="7" subtitle_name="Income Tax Credits"> <level label="a"> <level label="1"> <text>In this section the following words have the meanings indicated.</text> </level> <level label="2"> <text>“Administration” means the Maryland Energy Administration.</text> </level> <level label="3"> <level label="i"> <text>Except as provided in subparagraphs (ii) and (iii) of this paragraph, “qualified energy resources” has the meaning stated in § 45(c)(1) of the Internal Revenue Code.</text> </level> <level label="ii"> <text>“Qualified energy resources” includes any nonhazardous waste material that is segregated from other waste materials and is derived from:</text> <level label="1"> <text>any of the following forest–related resources, not including old–growth timber:</text> </level> <level label="A"> <text>mill residues, except sawdust and wood shavings;</text> </level> <level label="B"> <text>forest thinnings;</text> </level> <level label="C"> <text>slash; or</text> </level> <level label="D"> <text>brush;</text> </level> <level label="2"> <text>waste pallets, crates, and dunnage and landscape or right–of–way trimmings; or</text> </level> <level label="3"> <text>agricultural sources, including, but not limited to, orchard tree crops, vineyard, grain, legumes, sugar, and other crop by–products or residues.</text> </level> </level> <level label="iii"> <text>“Qualified energy resources” includes methane gas or other combustible gases resulting from the decomposition of organic materials from an agricultural operation, or from a landfill or wastewater treatment plant using one or a combination of the following processes:</text> <level label="1"> <text>anaerobic decomposition; or</text> </level> <level label="2"> <text>thermal decomposition.</text> </level> </level> </level> <level label="4"> <text>“Qualified Maryland facility” means a facility located in the State that primarily uses qualified energy resources to produce electricity and is originally placed in service on or after January 1, 2006, but before January 1, 2019.</text> </level> </level> <level label="b"> <level label="1"> <text>Except as provided in paragraph (2) of this subsection, an individual or corporation that receives an initial credit certificate from the Administration may claim a credit against the State income tax for a taxable year in an amount equal to 0.85 cents for each kilowatt hour of electricity:</text> <level label="i"> <text>produced by the individual or corporation from qualified energy resources at a qualified Maryland facility during the 5–year period specified in the initial credit certificate; and</text> </level> <level label="ii"> <text>sold by the individual or corporation to a person other than a related person, within the meaning of § 45 of the Internal Revenue Code, during the taxable year.</text> </level> </level> <level label="2"> <text>The annual tax credit under this subsection may not exceed one–fifth of the maximum amount of credit stated in the initial credit certificate.</text> </level> </level> <level label="c"> <level label="1"> <text>Subject to the provisions of this subsection and subsection (d) of this section, on application by a taxpayer, the Administration shall issue an initial credit certificate if the taxpayer has demonstrated that the taxpayer will within the next 12 months produce electricity from qualified energy resources at a qualified Maryland facility.</text> </level> <level label="2"> <text>The initial credit certificate issued under this subsection shall:</text> <level label="i"> <text>state the maximum amount of credit that may be claimed by the taxpayer for electricity produced over a 5–year period;</text> </level> <level label="ii"> <text>state the earliest tax year for which the credit may be claimed; and</text> </level> <level label="iii"> <text>state the 5–year period during which electricity produced from qualified energy resources at the qualified Maryland facility qualifies for the credit.</text> </level> </level> <level label="3"> <text>The maximum amount of credit stated in the initial credit certificate shall, for an energy producer, be in an amount equal to the lesser of:</text> <level label="i"> <text>the product of multiplying 5 times the taxpayer’s estimated annual tax credit, based on estimated annual energy production, as certified by the Administration; or</text> </level> <level label="ii"> <text>$2,500,000.</text> </level> </level> <level label="4"> <text>The Administration shall approve all applications that qualify for an initial credit certificate under this subsection on a first–come, first–served basis.</text> </level> <level label="5"> <text>If a taxpayer over a 3–year period does not claim on average at least 10% of the maximum credit amount stated in the initial credit certificate, the Administration at its discretion may cancel an amount of the taxpayer’s initial credit certificate equal to the product of multiplying:</text> <level label="i"> <text>the amount of the credit on average that was not claimed over the 3–year period; and</text> </level> <level label="ii"> <text>the remaining number of tax years that the taxpayer is eligible to take the credit.</text> </level> </level> <level label="6"> <text>An applicant for an initial credit certificate or a taxpayer whose credits have been canceled under paragraph (5) of this subsection, may appeal a decision by the Administration to the Office of Administrative Hearings in accordance with Title 10, Subtitle 2 of the State Government Article.</text> </level> <level label="7"> <text>The Administration may not issue an initial credit certificate after December 31, 2018.</text> </level> <level label="8"> <text>The Administration may not issue initial credit certificates for credit amounts less than $1,000.</text> </level> </level> <level label="d"> <level label="1"> <text>In this subsection, “Reserve Fund” means the Maryland Clean Energy Incentive Tax Credit Reserve Fund established under paragraph (2) of this subsection.</text> </level> <level label="2"> <level label="i"> <text>There is a Maryland Clean Energy Incentive Tax Credit Reserve Fund that is a special continuing, nonlapsing fund that is not subject to § 7–302 of the State Finance and Procurement Article.</text> </level> <level label="ii"> <text>The money in the Reserve Fund shall be invested and reinvested by the Treasurer, and interest and earnings shall be credited to the General Fund.</text> </level> </level> <level label="3"> <level label="i"> <text>Except as otherwise provided in this paragraph, for any fiscal year, the Administration may not issue initial credit certificates for credit amounts in the aggregate totaling more than the amount appropriated to the Reserve Fund for that fiscal year in the State budget as approved by the General Assembly.</text> </level> <level label="ii"> <text>If the aggregate credit amounts under initial credit certificates issued in a fiscal year total less than the amount appropriated to the Reserve Fund for that fiscal year, any excess amount shall remain in the Reserve Fund and may be issued under initial credit certificates for the next fiscal year.</text> </level> <level label="iii"> <text>For any fiscal year, if funds are transferred from the Reserve Fund under the authority of any provision of law other than under paragraph (6) of this subsection, the maximum credit amounts in the aggregate for which the Administration may issue initial credit certificates shall be reduced by the amount transferred.</text> </level> </level> <level label="4"> <text>For each of fiscal years 2018 and 2019, the Governor may include in the budget bill an appropriation to the Reserve Fund.</text> </level> <level label="5"> <text>Notwithstanding the provisions of § 7–213 of the State Finance and Procurement Article, the Governor may not reduce an appropriation to the Reserve Fund in the State budget as approved by the General Assembly.</text> </level> <level label="6"> <level label="i"> <text>Except as provided in this paragraph, money appropriated to the Reserve Fund shall remain in the Fund.</text> </level> <level label="ii"> <level label="1"> <text>Within 15 days after the end of each calendar quarter, the Administration shall notify the Comptroller as to each final credit certificate issued during the quarter:</text> </level> <level label="A"> <text>the maximum credit amount stated in the initial tax credit certificate for the producer of electricity from qualified energy resources at a qualified Maryland facility; and</text> </level> <level label="B"> <text>the final certified credit amount for the electricity producer.</text> </level> <level label="2"> <text>On notification that a final credit amount has been certified, the Comptroller shall transfer an amount equal to the credit amount stated in the initial credit certificate for the electricity producer from the Reserve Fund to the General Fund.</text> </level> </level> </level> </level> <level label="e"> <text>If the credit allowed under this section in any taxable year exceeds the State income tax otherwise payable by the corporation or individual for that taxable year, the corporation or the individual may claim a refund in the amount of the excess.</text> </level> <level label="f"> <level label="1"> <text>On January 1, 2007, and each year thereafter, the Administration shall provide to the Comptroller a list of all taxpayers in the prior tax year that have been issued an initial credit certificate and shall specify for each taxpayer the earliest tax year for which the credit may be claimed and the maximum amount of credit allowed.</text> </level> <level label="2"> <level label="i"> <text>On or before October 1, 2007, and each year thereafter, the Comptroller and the Administration jointly shall submit to the Governor and, subject to § 2–1257 of the State Government Article, to the General Assembly a written report regarding:</text> <level label="1"> <text>the number of certifications and taxpayers claiming the credit under this section;</text> </level> <level label="2"> <text>the name and physical location of each taxpayer issued an initial credit certificate;</text> </level> <level label="3"> <text>the maximum credit amount approved for each taxpayer;</text> </level> <level label="4"> <text>the geographical distribution of the credits claimed; and</text> </level> <level label="5"> <text>any other available information the Administration determines to be meaningful and appropriate.</text> </level> </level> <level label="ii"> <text>The Comptroller shall ensure that the information is presented and classified in a manner consistent with the confidentiality of tax return information.</text> </level> </level> </level> </section> <section article="gtg" article_name="Tax - General" number="10-721" title_number="10" title_name="Income Tax" subtitle_number="7" subtitle_name="Income Tax Credits"> <level label="a"> <level label="1"> <text>In this section the following words have the meanings indicated.</text> </level> <level label="2"> <text>“Department” means the Department of Commerce.</text> </level> <level label="3"> <text>“Maryland base amount” means the base amount as defined in § 41(c) of the Internal Revenue Code that is attributable to Maryland, determined by:</text> <level label="i"> <text>substituting “Maryland qualified research and development expense” for “qualified research expense”;</text> </level> <level label="ii"> <text>substituting “Maryland qualified research and development” for “qualified research”; and</text> </level> <level label="iii"> <text>using, instead of the “fixed base percentage”:</text> <level label="1"> <text>the percentage that the Maryland qualified research and development expense for the 4 taxable years immediately preceding the taxable year in which the expense is incurred is of the gross receipts for those years; or</text> </level> <level label="2"> <text>for a taxpayer who has fewer than 4 but at least 1 prior taxable year, the percentage as determined under item 1 of this item, determined using the number of immediately preceding taxable years that the taxpayer has.</text> </level> </level> </level> <level label="4"> <text>“Maryland gross receipts” means gross receipts that are reasonably attributable to the conduct of a trade or business in this State, determined under methods prescribed by the Comptroller based on standards similar to the standards under § 10–402 of this title.</text> </level> <level label="5"> <text>“Maryland qualified research and development” means qualified research as defined in § 41(d) of the Internal Revenue Code that is conducted in this State.</text> </level> <level label="6"> <text>“Maryland qualified research and development expenses” means qualified research expenses as defined in § 41(b) of the Internal Revenue Code incurred for Maryland qualified research and development.</text> </level> <level label="7"> <text>“Net book value assets” means the total of a business’s net value of assets, including intangibles but not including liabilities, minus depreciation and amortization.</text> </level> <level label="8"> <text>“Small business” means a for–profit corporation, limited liability company, partnership, or sole proprietorship with net book value assets totaling, at the beginning or the end of the taxable year for which Maryland qualified research and development expenses are incurred, as reported on the balance sheet, less than $5,000,000.</text> </level> </level> <level label="b"> <level label="1"> <text>The purpose of the Research and Development Tax Credit Program is to foster increased research activities and expenditures in Maryland.</text> </level> <level label="2"> <text>Subject to the limitations of this section, an individual or a corporation may claim credits against the State income tax in an amount equal to 10% of the amount by which the Maryland qualified research and development expenses paid or incurred by the individual or corporation during the taxable year exceed the Maryland base amount for the individual or corporation.</text> </level> </level> <level label="c"> <level label="1"> <text>By November 15 of the calendar year following the end of the taxable year in which the Maryland qualified research and development expenses were incurred, an individual or corporation shall submit an application to the Department for the credits allowed under subsection (b) of this section.</text> </level> <level label="2"> <text>For each calendar year, the total amount of credits approved by the Department under subsection (b) of this section may not exceed $12,000,000.</text> </level> <level label="3"> <level label="i"> <text>Except as provided in paragraph (5) of this subsection, each calendar year, the Department shall reserve $3,500,000 of the credits authorized under subsection (b) of this section for applicants that are small businesses.</text> </level> <level label="ii"> <text>Subject to paragraph (5) of this subsection, if the total amount of credits applied for by all small businesses under this section exceeds the amount specified under subparagraph (i) of this paragraph, the Department shall approve a credit for each applicant in an amount equal to the product of multiplying the credit applied for by the applicant times a fraction:</text> <level label="1"> <text>the numerator of which is the amount specified under subparagraph (i) of this paragraph; and</text> </level> <level label="2"> <text>the denominator of which is the total of all credits applied for by all small businesses under this section in the calendar year.</text> </level> </level> </level> <level label="4"> <level label="i"> <text>Except as provided in paragraph (5) of this subsection, for each calendar year, the total amount of credits approved by the Department under this section to applicants that are not small businesses may not exceed $8,500,000.</text> </level> <level label="ii"> <text>Subject to paragraph (5) of this subsection, if the total amount of credits applied for by all applicants that are not small businesses exceeds the maximum specified under subparagraph (i) of this paragraph, the Department shall approve a credit under this section for each applicant in an amount equal to the product of multiplying the credit applied for by the applicant times a fraction:</text> <level label="1"> <text>the numerator of which is the maximum specified under subparagraph (i) of this paragraph; and</text> </level> <level label="2"> <text>the denominator of which is the total of all credits applied for by all applicants that are not small businesses in the calendar year.</text> </level> </level> </level> <level label="5"> <level label="i"> <text>For any calendar year, if the total amount of credits applied for by all small businesses is less than $3,500,000, the amount specified under paragraph (4)(i) of this subsection shall be increased for that calendar year by an amount equal to the difference between $3,500,000 and the total amount of credits applied for by small businesses.</text> </level> <level label="ii"> <text>For any calendar year, if the total amount of credits applied for by all applicants that are not small businesses is less than $8,500,000, the amount specified under paragraph (3)(i) of this subsection shall be increased for that calendar year by an amount equal to the difference between $8,500,000 and the total amount of credits applied for by applicants that are not small businesses.</text> </level> </level> <level label="6"> <text>The Department may not approve a tax credit for any single applicant in an amount exceeding $250,000.</text> </level> <level label="7"> <text>By February 15 of the calendar year following the end of the year in which the individual or corporation submitted an application for the credit in accordance with paragraph (1) of this subsection, the Department shall certify to the individual or corporation the amount of the research and development tax credits approved by the Department for the individual or corporation under this section.</text> </level> <level label="8"> <text>To claim the approved credits allowed under this section, an individual or corporation shall:</text> <level label="i"> <level label="1"> <text>file an amended income tax return for the taxable year in which the Maryland qualified research and development expense was incurred; and</text> </level> <level label="2"> <text>attach a copy of the Department’s certification of the approved credit amount to the amended income tax return; or</text> </level> </level> <level label="ii"> <text>subject to subsection (d) of this section, attach a copy of the Department’s certification of the approved credit amount to an income tax return filed for any of the 7 taxable years after the taxable year in which the Maryland qualified research and development expenses were incurred.</text> </level> </level> </level> <level label="d"> <level label="1"> <text>Except as provided in paragraph (2) of this subsection, if the credit allowed under this section in any taxable year exceeds the State income tax for that taxable year, an individual or corporation may apply the excess as a credit against the State income tax for succeeding taxable years until the earlier of:</text> <level label="i"> <text>the full amount of the excess is used; or</text> </level> <level label="ii"> <text>the expiration of the 7th taxable year after the taxable year in which the Maryland qualified research and development expense was incurred.</text> </level> </level> <level label="2"> <text>If the credit allowed under this section in any taxable year exceeds the State income tax for that taxable year, a small business may claim a refund in the amount of the excess.</text> </level> </level> <level label="e"> <level label="1"> <text>In determining the amount of the credit under this section:</text> <level label="i"> <text>all members of the same controlled group of corporations, as defined under § 41(f) of the Internal Revenue Code, shall be treated as a single taxpayer; and</text> </level> <level label="ii"> <text>the credit allowable by this section to each member shall be its proportionate shares of the qualified research expenses giving rise to the credit.</text> </level> </level> <level label="2"> <text>The Comptroller shall adopt regulations providing for:</text> <level label="i"> <text>determination of the amount of the credit under this section in the case of trades or businesses, whether or not incorporated, that are under common control;</text> </level> <level label="ii"> <text>pass–through and allocation of the credit in the case of estates and trusts, partnerships, unincorporated trades or businesses, and S corporations;</text> </level> <level label="iii"> <text>adjustments in the case of acquisitions and dispositions described in § 41(f)(3) of the Internal Revenue Code; and</text> </level> <level label="iv"> <text>determination of the credit in the case of short taxable years.</text> </level> </level> <level label="3"> <text>The regulations adopted under paragraph (2) of this subsection shall be based on principles similar to the principles applicable under § 41 of the Internal Revenue Code and regulations adopted thereunder.</text> </level> </level> <level label="f"> <level label="1"> <text>The Department of Commerce and the Comptroller jointly shall adopt regulations to prescribe standards for determining when research or development is considered conducted in the State for purposes of determining the credit under this section.</text> </level> <level label="2"> <text>In adopting regulations under this subsection, the Department and the Comptroller may consider:</text> <level label="i"> <text>the location where services are performed;</text> </level> <level label="ii"> <text>the residence or business location of the person or persons performing services;</text> </level> <level label="iii"> <text>the location where supplies used in research and development are consumed; and</text> </level> <level label="iv"> <text>any other factors that the Department determines are relevant for the determination.</text> </level> </level> </level> <level label="g"> <text>In accordance with § 2.5–109 of the Economic Development Article, the Department shall report on the credits approved under this section.</text> </level> <level label="h"> <text>If the provisions of § 41 of the Internal Revenue Code governing the federal research and development tax credit are repealed or terminate, the provisions of this section continue to operate as if the provisions of § 41 of the Internal Revenue Code remain in effect, and the Maryland research and development tax credit under this section shall continue to be available.</text> </level> <level label="i"> <level label="1"> <text>The Department may not approve a credit under this section for a taxable year beginning after December 31, 2030.</text> </level> <level label="2"> <text>If a taxpayer’s taxable year for income tax purposes is not the calendar year, for the taxable year that begins in calendar year 2030, the taxpayer may apply for only a prorated credit for research and development expenses paid or incurred in the taxable year for that part of the taxable year that falls in calendar year 2030.</text> </level> </level> </section> <section article="gtg" article_name="Tax - General" number="10-722" title_number="10" title_name="Income Tax" subtitle_number="7" subtitle_name="Income Tax Credits"> <level label="a"> <level label="1"> <text>In this section the following words have the meanings indicated.</text> </level> <level label="2"> <text>“Administration” means the Maryland Energy Administration.</text> </level> <level label="3"> <level label="i"> <text>“Allowable costs” means amounts properly chargeable to capital account, other than for land, that are paid or incurred on or after July 1, 2001, for:</text> <level label="1"> <text>construction or rehabilitation;</text> </level> <level label="2"> <text>commissioning costs;</text> </level> <level label="3"> <text>interest paid or incurred during the construction or rehabilitation period;</text> </level> <level label="4"> <text>architectural, engineering, and other professional fees allocable to construction or rehabilitation;</text> </level> <level label="5"> <text>closing costs for construction, rehabilitation, or mortgage loans;</text> </level> <level label="6"> <text>recording taxes and filing fees incurred with respect to construction or rehabilitation; and</text> </level> <level label="7"> <text>finishes and furnishings consistent with the regulations adopted by the Administration under this section, lighting, plumbing, electrical wiring, and ventilation.</text> </level> </level> <level label="ii"> <text>“Allowable costs” does not include:</text> <level label="1"> <text>the cost of telephone systems and computers, other than electrical wiring costs;</text> </level> <level label="2"> <text>legal fees allocable to construction or rehabilitation;</text> </level> <level label="3"> <text>site costs, including temporary electric wiring, scaffolding, demolition costs, and fencing and security facilities;</text> </level> <level label="4"> <text>finishes or furnishings that are not consistent with the regulations adopted by the Administration under this section; or</text> </level> <level label="5"> <text>the cost of purchasing or installing fuel cells, wind turbines, or photovoltaic modules.</text> </level> </level> </level> <level label="4"> <text>“Applicable energy efficiency standards” means ASHRAE/IESNA Standard 90.1–1999, Energy Standard for Buildings Except Low–Rise Residential Buildings, published by the American Society of Heating, Refrigerating and Air–Conditioning Engineers.</text> </level> <level label="5"> <text>“Base building” means all areas of a building not intended for occupancy by a tenant or owner, including the structural components of the building, exterior walls, floors, windows, roofs, foundations, chimneys and stacks, parking areas, mechanical rooms and mechanical systems, and owner–controlled or operated service spaces, sidewalks, main lobby, shafts and vertical transportation mechanisms, stairways, and corridors.</text> </level> <level label="6"> <text>“Commissioning” means:</text> <level label="i"> <text>the testing and fine–tuning of heat, ventilating, and air–conditioning systems and other systems to assure proper functioning and adherence to design criteria; and</text> </level> <level label="ii"> <text>the preparation of system operation manuals and instruction of maintenance personnel.</text> </level> </level> <level label="7"> <text>“Credit allowance year” means the later of:</text> <level label="i"> <text>the taxable year during which:</text> <level label="1"> <text>the property, construction, completion, or rehabilitation on which the credit allowed under this section is based is originally placed in service; or</text> </level> <level label="2"> <text>a fuel cell, wind turbine, or photovoltaic module constitutes a qualifying alternate energy source and is fully operational; or</text> </level> </level> <level label="ii"> <text>the earliest taxable year for which the credit may be claimed under the initial credit certificate issued under subsection (k) of this section.</text> </level> </level> <level label="8"> <text>“Eligible building” means a building located in the State that:</text> <level label="i"> <level label="1"> <text>is a building used primarily for nonresidential purposes if the building contains at least 20,000 square feet of interior space;</text> </level> <level label="2"> <text>is a residential multifamily building with at least 12 dwelling units that contains at least 20,000 square feet of interior space; or</text> </level> <level label="3"> <text>is any combination of buildings described in item 1 or 2 of this item;</text> </level> </level> <level label="ii"> <text>in the case of a newly constructed building for which a certificate of occupancy was not issued before July 1, 2001:</text> <level label="1"> <text>is located on a qualified brownfields site, as defined under § 5–301 of the Economic Development Article; or</text> </level> <level label="2"> <level label="A"> <text>is located in a priority funding area under § 5–7B–02 of the State Finance and Procurement Article; and</text> </level> </level> <level label="B"> <text>is not located on wetlands, the alteration of which requires a permit under § 404 of the federal Clean Water Act, 33 U.S.C. § 1344; and</text> </level> </level> <level label="iii"> <text>in the case of a rehabilitation of a building:</text> <level label="1"> <text>is located in a priority funding area under § 5–7B–02 of the State Finance and Procurement Article or on a qualified brownfields site as defined under § 5–301 of the Economic Development Article; or</text> </level> <level label="2"> <text>is not an increase of more than 25% in the square footage of the building.</text> </level> </level> </level> <level label="9"> <text>“Fuel cell” means a device that produces electricity directly from hydrogen or hydrocarbon fuel through a noncombustive electrochemical process.</text> </level> <level label="10"> <text>“Green base building” means a base building that is part of an eligible building and meets the requirements set out in subsection (i) of this section.</text> </level> <level label="11"> <text>“Green tenant space” means tenant space in a building if the building is an eligible building and the tenant space meets the requirements of subsection (j) of this section.</text> </level> <level label="12"> <text>“Green whole building” means a building for which the base building is a green base building and all tenant space is green tenant space.</text> </level> <level label="13"> <text>“Incremental cost of building–integrated photovoltaic modules” means:</text> <level label="i"> <text>the cost of building–integrated photovoltaic modules and any associated inverter, additional wiring or other electrical equipment for the photovoltaic modules, or additional mounting or structural materials, less the cost of spandrel glass or other building material that would have been used if building–integrated photovoltaic modules were not installed;</text> </level> <level label="ii"> <text>incremental labor costs properly allocable to on–site preparation, assembly, and original installation of photovoltaic modules; and</text> </level> <level label="iii"> <text>incremental costs of architectural and engineering services and designs and plans directly related to the construction or installation of photovoltaic modules.</text> </level> </level> <level label="14"> <text>“Qualifying alternate energy sources” means building–integrated and nonbuilding–integrated photovoltaic modules, wind turbines, and fuel cells installed to serve the base building or tenant space that:</text> <level label="i"> <text>have the capability to monitor their actual power output;</text> </level> <level label="ii"> <text>are fully commissioned upon installation, and annually thereafter, to ensure that the systems meet their design specifications; and</text> </level> <level label="iii"> <text>in the case of wind turbines, meet any applicable noise ordinances.</text> </level> </level> <level label="15"> <text>“Tenant improvements” means improvements that are necessary or appropriate to support or conduct the business of a tenant or occupying owner.</text> </level> <level label="16"> <text>“Tenant space” means the portion of a building intended for occupancy by a tenant or occupying owner.</text> </level> </level> <level label="b"> <level label="1"> <text>An individual or a corporation may claim a credit against the State income tax as provided under this section for green buildings and green building components.</text> </level> <level label="2"> <text>If the credit allowed under this section exceeds the State income tax, any unused credit may be carried forward and applied for succeeding taxable years until the earlier of:</text> <level label="i"> <text>the full amount of the credit is used; or</text> </level> <level label="ii"> <text>the expiration of the 10th year after the taxable year for which the credit was allowed.</text> </level> </level> <level label="3"> <text>For each of the credits under subsections (c) through (h) of this section, the credit may not be allowed for any taxable year unless:</text> <level label="i"> <text>the taxpayer has obtained and filed an initial credit certificate and an eligibility certificate issued under subsection (k) of this section;</text> </level> <level label="ii"> <text>a certificate of occupancy for the building has been issued; and</text> </level> <level label="iii"> <text>the property with respect to which the credit is claimed is in service during the taxable year.</text> </level> </level> <level label="4"> <text>The total amount allowed in the aggregate for all credits under this section may not exceed the maximum set forth in the initial credit certificate obtained under subsection (k) of this section.</text> </level> <level label="5"> <text>In determining the amount of the credits under this section, a cost paid or incurred may not be the basis for more than one credit.</text> </level> </level> <level label="c"> <level label="1"> <text>For the taxable year that is the credit allowance year, an owner or tenant may claim a credit in an amount equal to 8% of the allowable costs paid or incurred by the owner or tenant for the construction of a green whole building or the rehabilitation of a building that is not a green whole building to be a green whole building.</text> </level> <level label="2"> <text>The allowable costs used to determine the credit amount allowed under this subsection for a green whole building may not exceed in the aggregate:</text> <level label="i"> <text>$120 per square foot for that portion of the building that comprises the base building; and</text> </level> <level label="ii"> <text>$60 per square foot for that portion of the building that comprises the tenant space.</text> </level> </level> </level> <level label="d"> <level label="1"> <text>For the taxable year that is the credit allowance year, an owner may claim a credit in an amount equal to 6% of the allowable costs paid or incurred by the owner for the construction of a green base building or the rehabilitation of a building that is not a green base building to be a green base building.</text> </level> <level label="2"> <text>The allowable costs used to determine the credit amount allowed under this subsection for a green base building may not exceed, in the aggregate, $120 per square foot.</text> </level> </level> <level label="e"> <level label="1"> <text>For the taxable year that is the credit allowance year, an owner or tenant may claim a credit in an amount equal to 6% of the allowable costs for tenant improvements paid or incurred by the owner or tenant in the construction or completion of green tenant space or the rehabilitation of tenant space that is not green tenant space to be green tenant space.</text> </level> <level label="2"> <level label="i"> <text>The allowable costs used to determine the credit amount allowed under this subsection for green tenant space may not exceed, in the aggregate, $60 per square foot.</text> </level> <level label="ii"> <text>If an owner and tenant both incur allowable costs for tenant improvements under this subsection and the costs exceed $60 per square foot in the aggregate, the owner has priority as to costs constituting the basis for the green tenant space credit under this subsection.</text> </level> </level> <level label="3"> <text>The credit under this subsection for green tenant space may not be claimed by an owner of a building that occupies fewer than 10,000 square feet of the building.</text> </level> <level label="4"> <text>The credit under this subsection for green tenant space may not be claimed by a tenant that occupies fewer than 5,000 square feet.</text> </level> </level> <level label="f"> <level label="1"> <text>For the taxable year that is the credit allowance year, an owner or tenant may claim a credit in the amount determined under this subsection for the installation of a fuel cell that is a qualifying alternate energy source and is installed to serve a green whole building, green base building, or green tenant space.</text> </level> <level label="2"> <text>The amount of the credit allowed under this subsection is 30% of the sum of the capitalized costs paid or incurred by an owner or tenant with respect to each fuel cell installed, including the cost of the foundation or platform and the labor costs associated with installation.</text> </level> <level label="3"> <text>The costs used to determine the credit amount allowed under this subsection for installation of a fuel cell:</text> <level label="i"> <text>may not exceed $1,000 per kilowatt of installed DC rated capacity of the fuel cell; and</text> </level> <level label="ii"> <text>shall be reduced by the amount of any federal, State, or local grant:</text> <level label="1"> <text>received by the taxpayer and used for the purchase or installation of the fuel cell; and</text> </level> <level label="2"> <text>not included in the federal gross income of the taxpayer.</text> </level> </level> </level> </level> <level label="g"> <level label="1"> <text>For the taxable year that is the credit allowance year, an owner or tenant may claim a credit in the amount determined under this subsection for the installation of photovoltaic modules that constitute a qualifying alternate energy source and are installed to serve a green whole building, green base building, or green tenant space.</text> </level> <level label="2"> <text>The amount of the credit allowed under this subsection is:</text> <level label="i"> <text>20% of the incremental cost paid or incurred by an owner or tenant for building–integrated photovoltaic modules; and</text> </level> <level label="ii"> <text>25% of the cost of nonbuilding–integrated photovoltaic modules, including the cost of the foundation or platform and the labor costs associated with installation.</text> </level> </level> <level label="3"> <text>The costs used to determine the credit amount allowed under this subsection for installation of photovoltaic modules:</text> <level label="i"> <text>may not exceed the product obtained by multiplying $3 times the number of watts included in the DC rated capacity of the photovoltaic modules; and</text> </level> <level label="ii"> <text>shall be reduced by the amount of any federal, State, or local grant:</text> <level label="1"> <text>received by the taxpayer and used for the purchase or installation of the photovoltaic equipment; and</text> </level> <level label="2"> <text>not included in the federal gross income of the taxpayer.</text> </level> </level> </level> </level> <level label="h"> <level label="1"> <text>For the taxable year that is the credit allowance year, an owner or tenant may claim a credit in the amount determined under paragraph (2) of this subsection for the installation of a wind turbine that is a qualifying alternate energy source and is installed to serve a green whole building, green base building, or green tenant space.</text> </level> <level label="2"> <text>The amount of the credit allowed under this subsection is 25% of the sum of the capitalized costs paid or incurred by an owner or tenant with respect to each wind turbine installed, including the cost of the foundation or platform and the labor costs associated with installation.</text> </level> </level> <level label="i"> <level label="1"> <text>By regulation, the Administration shall adopt standards for a building to qualify as a green base building eligible for the tax credits under this section that are consistent with the criteria for green base buildings set forth by the United States Green Building Council or other similar criteria.</text> </level> <level label="2"> <text>The regulations adopted under this subsection shall provide that the energy use shall be no more than 65% for new construction of a base building, or 75% in the case of rehabilitation of a base building, of the energy use attributable to a reference building that meets the requirements of applicable energy efficiency standards.</text> </level> </level> <level label="j"> <level label="1"> <text>By regulation, the Administration shall adopt standards for tenant space to qualify as green tenant space eligible for the tax credits under this section that are consistent with the criteria for green tenant space set forth by the United States Green Building Council or other similar criteria.</text> </level> <level label="2"> <text>The regulations adopted under this subsection shall provide that the energy use shall be no more than 65% for new construction, or 75% in the case of rehabilitation, of the energy use attributable to a reference building that meets the requirements of applicable energy efficiency standards.</text> </level> </level> <level label="k"> <level label="1"> <level label="i"> <text>On application by a taxpayer, the Administration shall issue an initial credit certificate if the taxpayer has made a showing that the taxpayer is likely within a reasonable time to place in service property for which a credit under this section would be allowed.</text> </level> <level label="ii"> <text>The initial credit certificate issued under this paragraph:</text> <level label="1"> <text>shall state the earliest taxable year for which the credit may be claimed and an expiration date; and</text> </level> <level label="2"> <text>shall apply only to property placed in service on or before the expiration date.</text> </level> </level> <level label="iii"> <text>To avoid unwarranted hardship, the Administration at its discretion may extend the expiration date stated under an initial credit certificate.</text> </level> <level label="iv"> <text>The initial credit certificate shall state the maximum amount of credit allowable in the aggregate for all credits allowed under this section.</text> </level> <level label="v"> <text>The Administration may not issue initial credit certificates, in the aggregate, for more than $25,000,000 worth of credits.</text> </level> <level label="vi"> <text>Except as provided in subparagraph (vii) of this paragraph, initial credit certificates shall be limited in their applicability, as follows:</text> <text>Credits in the aggregate With respect to taxable years</text> <text>may not be allowed beginning:</text> <text>for more than:</text> <text>$1 million 2003</text> <text>$2 million 2004</text> <text>$3 million 2005</text> <text>$4 million 2006</text> <text>$5 million 2007</text> <text>$4 million 2008</text> <text>$3 million 2009</text> <text>$2 million 2010</text> <text>$1 million 2011</text> </level> <level label="vii"> <text>As of the end of a calendar year, if certificates for credit amounts totaling less than the amount permitted with respect to taxable years beginning in that calendar year have been issued, the maximum amount that may be allowed for taxable years beginning in the subsequent calendar year shall be increased by the amount of the preceding year’s shortfall.</text> </level> <level label="viii"> <text>The Administration may not issue an initial credit certificate after December 31, 2011.</text> </level> <level label="ix"> <text>On January 1, 2004, and each year thereafter, the Administration shall provide to the Comptroller a list of all taxpayers in the prior taxable year that have been issued an initial credit certificate and shall specify for each taxpayer the earliest taxable year for which the credit may be claimed and the maximum amount of the credit allowable in the aggregate for all credits allowed under this section.</text> </level> </level> <level label="2"> <level label="i"> <text>For each taxable year for which a taxpayer claims a credit under this section with respect to a green whole building, green base building, green tenant space, fuel cell, photovoltaic module, or wind turbine, the taxpayer shall obtain an eligibility certificate from an architect or professional engineer licensed to practice in this State.</text> </level> <level label="ii"> <text>An eligibility certificate issued under this paragraph shall consist of a certification, under the seal of the architect or engineer, that the property that is the basis for the credit that is claimed is in service and that:</text> <level label="1"> <text>the building, base building, or tenant space with respect to which the credit is claimed is a green whole building, green base building, or green tenant space; and</text> </level> <level label="2"> <text>any fuel cell, photovoltaic module, or wind turbine with respect to which the credit is claimed constitutes a qualifying alternate energy source and is fully operational.</text> </level> </level> <level label="iii"> <text>The certification under subparagraph (ii) of this paragraph:</text> <level label="1"> <text>shall be made in accordance with the regulations adopted by the Administration under this section specifying the standards and guidelines for each credit under this section; and</text> </level> <level label="2"> <text>shall set forth the specific findings on which the certification was based.</text> </level> </level> <level label="iv"> <text>The taxpayer shall file the eligibility certificate and the associated initial credit certificate with the taxpayer’s income tax return and shall file duplicate copies of the eligibility certificate with the Administration.</text> </level> <level label="v"> <text>The eligibility certificate shall include:</text> <level label="1"> <text>sufficient information to identify each building or space; and</text> </level> <level label="2"> <text>any other information that the Administration or the Comptroller requires by regulation.</text> </level> </level> </level> <level label="3"> <text>If the Administration has reason to believe that an architect or professional engineer, in making any certification under this subsection, engaged in professional misconduct, the Administration shall inform the appropriate professional board of the suspected misconduct.</text> </level> <level label="4"> <level label="i"> <text>The Comptroller and the Administration may adopt regulations necessary to carry out the provisions of this section.</text> </level> <level label="ii"> <text>Regulations adopted under this section shall construe the provisions of this section in such a manner as to encourage the development of green whole buildings, green base buildings, and green tenant space and to maintain high, but commercially reasonable, standards for obtaining tax credits under this section.</text> </level> </level> <level label="5"> <text>On or before April 1, 2005, the Comptroller and the Administration, jointly and in consultation with the Department of the Environment, shall submit to the Governor and, subject to § 2–1257 of the State Government Article, to the General Assembly, a written report regarding:</text> <level label="i"> <text>the number of certifications and taxpayers claiming the credit under this section;</text> </level> <level label="ii"> <text>the amount of the credits claimed;</text> </level> <level label="iii"> <text>the geographical distribution of the credits claimed; and</text> </level> <level label="iv"> <text>any other available information the Administration determines to be meaningful and appropriate.</text> </level> </level> <level label="6"> <text>The Comptroller shall ensure that the information is presented and classified in a manner consistent with the confidentiality of tax return information.</text> </level> </level> <level label="l"> <text>On or before July 1, 2002, the Administration, in consultation with the Department of the Environment and the Department of Natural Resources, shall adopt regulations with respect to the certification of green whole buildings, green base buildings, and green tenant space that are consistent with criteria set forth by the State’s Green Buildings Council or other similar criteria for:</text> <level label="1"> <text>energy use;</text> </level> <level label="2"> <text>appliance and heating, cooling, and hot water equipment standards;</text> </level> <level label="3"> <text>air conditioning equipment, including chillers;</text> </level> <level label="4"> <text>building materials, finishes, and furnishings;</text> </level> <level label="5"> <text>stormwater runoff for new construction;</text> </level> <level label="6"> <text>water conservation and efficiency; and</text> </level> <level label="7"> <text>indoor air quality, in consultation with the Maryland Department of Health.</text> </level> </level> </section> <section article="gtg" article_name="Tax - General" number="10-723" title_number="10" title_name="Income Tax" subtitle_number="7" subtitle_name="Income Tax Credits"> <level label="a"> <level label="1"> <text>In this section the following words have the meanings indicated.</text> </level> <level label="2"> <text>“Department” means the Department of Natural Resources.</text> </level> <level label="3"> <text>“Member” means:</text> <level label="i"> <text>a shareholder of an S corporation;</text> </level> <level label="ii"> <text>a general or limited partner of a partnership, a limited partnership, or a limited liability partnership;</text> </level> <level label="iii"> <text>a member of a limited liability company; or</text> </level> <level label="iv"> <text>a beneficiary of a business trust or a statutory trust.</text> </level> </level> <level label="4"> <text>“Pass–through entity” means:</text> <level label="i"> <text>an S corporation;</text> </level> <level label="ii"> <text>a partnership;</text> </level> <level label="iii"> <text>a limited liability company that is not taxed as a corporation under this title; or</text> </level> <level label="iv"> <text>a business trust or a statutory trust that is not taxed as a corporation under this title.</text> </level> </level> </level> <level label="b"> <level label="1"> <text>An individual or a member of a pass–through entity may claim a credit against the State income tax as provided in this section for an easement conveyed to the Maryland Environmental Trust, the Maryland Agricultural Land Preservation Foundation, or the Department for the purpose of preserving open space, natural resources, agriculture, forest land, watersheds, significant ecosystems, viewsheds, or historic properties, if:</text> <level label="i"> <text>the easement is perpetual; and</text> </level> <level label="ii"> <text>the easement is accepted and approved by the Board of Public Works.</text> </level> </level> <level label="2"> <text>Subject to subsection (d)(2) of this section, the credit under this section shall be allowed for the taxable year in which the conveyance is approved by the Board of Public Works.</text> </level> </level> <level label="c"> <level label="1"> <text>Except as otherwise provided in this section, the amount of the credit allowed under this section is the amount by which the fair market value of the property before the conveyance of the easement exceeds the fair market value of the property after the conveyance of the easement.</text> </level> <level label="2"> <text>The fair market value of the property before and after the conveyance of the easement shall be substantiated by an appraisal prepared by a certified real estate appraiser, as defined under § 16–101 of the Business Occupations and Professions Article.</text> </level> <level label="3"> <text>The amount of the credit shall be reduced by the amount of any payment received for the easement.</text> </level> </level> <level label="d"> <level label="1"> <text>For any taxable year, the credit allowed under this section may not exceed the lesser of:</text> <level label="i"> <text>the State income tax for that taxable year; or</text> </level> <level label="ii"> <text>$5,000.</text> </level> </level> <level label="2"> <text>If the credit otherwise allowable under subsection (c) of this section exceeds the limit under paragraph (1) of this subsection, a taxpayer may apply the excess as a credit against the State income tax for succeeding taxable years until the earlier of:</text> <level label="i"> <text>the full amount of the excess is used; or</text> </level> <level label="ii"> <text>the expiration of the 15th taxable year after the taxable year in which the conveyance was approved by the Board of Public Works.</text> </level> </level> <level label="3"> <text>For each taxable year, the amount carried forward to the taxable year under paragraph (2) of this subsection may not exceed the limit under paragraph (1) of this subsection.</text> </level> <level label="4"> <text>The sum of all credits claimed by members of a pass–through entity in a taxable year may not exceed the amount specified under paragraph (1)(ii) of this subsection.</text> </level> <level label="5"> <level label="i"> <text>For a taxable year, the total aggregate amount of credits claimed by members of pass–through entities under this section may not exceed $200,000.</text> </level> <level label="ii"> <text>For pass–through entities, the Board of Public Works shall approve credits for conveyances under this section on a first–come, first–served basis.</text> </level> </level> </level> <level label="e"> <text>The credit under this section may not be claimed for a required dedication of open space for the purpose of fulfilling density requirements to obtain a subdivision or building permit.</text> </level> <level label="f"> <text>The Comptroller shall adopt regulations to specify procedures for a member of a pass–through entity to claim the credit under this section.</text> </level> </section> <section article="gtg" article_name="Tax - General" number="10-724" title_number="10" title_name="Income Tax" subtitle_number="7" subtitle_name="Income Tax Credits"> <level label="a"> <text>In this section, “aquaculture oyster float” means a device that is:</text> <level label="1"> <text>purchased new;</text> </level> <level label="2"> <text>specifically designed for the purpose of growing oysters at or under an individual homeowner’s pier; and</text> </level> <level label="3"> <text>constructed to be fully buoyant and facilitate the growth of oysters for the width of the pier.</text> </level> </level> <level label="b"> <text>Subject to the limitations of this section, an individual may claim a credit against the State income tax in an amount equal to 100% of the purchase price of aquaculture oyster floats purchased during the taxable year.</text> </level> <level label="c"> <level label="1"> <text>For any taxable year, the credit allowed under this section may not exceed the lesser of:</text> <level label="i"> <text>$500; or</text> </level> <level label="ii"> <text>the State income tax imposed for the taxable year calculated before the application of the credits allowed under this section and under §§ 10-701 and 10-701.1 of this subtitle but after the application of any other credit allowed under this subtitle.</text> </level> </level> <level label="2"> <text>The unused amount of the credit may not be carried over to any other taxable year.</text> </level> </level> </section> <section article="gtg" article_name="Tax - General" number="10-725" title_number="10" title_name="Income Tax" subtitle_number="7" subtitle_name="Income Tax Credits"> <level label="a"> <level label="1"> <text>In this section the following words have the meanings indicated.</text> </level> <level label="2"> <text>“Biotechnology company” means a company organized for profit that is primarily engaged in, or within 2 months will be primarily engaged in, the research, development, or commercialization of innovative and proprietary technology that comprises, interacts with, or analyzes biological material including biomolecules (DNA, RNA, or protein), cells, tissues, or organs.</text> </level> <level label="3"> <level label="i"> <text>“Company” means any entity of any form duly organized and existing under the laws of any jurisdiction for the purpose of conducting business for profit.</text> </level> <level label="ii"> <text>“Company” does not include a sole proprietorship.</text> </level> </level> <level label="4"> <text>“Department” means the Department of Commerce.</text> </level> <level label="5"> <level label="i"> <text>“Investment” means the contribution of money in cash or cash equivalents expressed in United States dollars, at a risk of loss, to a qualified Maryland biotechnology company in exchange for stock, a partnership or membership interest, or other ownership interest in the equity of the qualified Maryland biotechnology company, title to which ownership interest shall vest in the qualified investor.</text> </level> <level label="ii"> <text>“Investment” does not include debt.</text> </level> <level label="iii"> <text>For purposes of this section, an investment is at risk of loss when its repayment entirely depends upon the success of the business operations of the qualified company.</text> </level> </level> <level label="6"> <level label="i"> <text>“Qualified investor” means any individual or entity that invests at least $25,000 in a qualified Maryland biotechnology company and that is required to file an income tax return in any jurisdiction.</text> </level> <level label="ii"> <text>“Qualified investor” does not include:</text> <level label="1"> <text>a qualified pension plan, individual retirement account, or other qualified retirement plan under the Employee Retirement Income Security Act of 1974, as amended, or fiduciaries or custodians under such plans, or similar tax–favored plans or entities under the laws of other countries; or</text> </level> <level label="2"> <text>a founder or current employee of the qualified Maryland biotechnology company, if the company has been in active business for more than 5 years.</text> </level> </level> </level> <level label="7"> <level label="i"> <text>“Qualified Maryland biotechnology company” means a biotechnology company that:</text> <level label="1"> <text>has its headquarters and base of operations in this State;</text> </level> <level label="2"> <text>has fewer than 50 full–time employees;</text> </level> <level label="3"> <text>has been in active business no longer than 12 years;</text> </level> <level label="4"> <text>does not have its securities publicly traded on any exchange;</text> </level> <level label="5"> <text>has been certified as a biotechnology company by the Department; and</text> </level> <level label="6"> <text>the qualified investors in the company have not received more than $7,000,000 in tax credits in the aggregate under this section.</text> </level> </level> <level label="ii"> <text>“Qualified Maryland biotechnology company” includes a company that, within 2 months of the receipt of the investment, has met the requirements of subparagraph (i) of this paragraph.</text> </level> </level> <level label="8"> <text>“Secretary” means the Secretary of Commerce.</text> </level> </level> <level label="b"> <level label="1"> <text>The Biotechnology Investment Incentive Tax Credit is intended to foster the growth of Maryland’s biotechnology industry by incentivizing investment in early stage companies with the goal of increasing the number of companies developing biotechnologies in Maryland, increasing overall investments in the biotechnology sector, and increasing the number of individual investors actively investing in Maryland’s life sciences companies.</text> </level> <level label="2"> <text>Subject to paragraphs (3) and (4) of this subsection and subsections (d) and (e) of this section, for the taxable year in which an investment in a qualified Maryland biotechnology company is made, a qualified investor may claim a credit against the State income tax in an amount equal to the amount of tax credit stated in the final credit certificate approved by the Secretary for the investment as provided under this section.</text> </level> <level label="3"> <text>To be eligible for the tax credit described in paragraph (2) of this subsection, the qualified investor shall be:</text> <level label="i"> <text>for a company, duly organized and in good standing in the jurisdiction under the laws under which it is organized;</text> </level> <level label="ii"> <text>for a company, in good standing and authorized or registered to do business in the State;</text> </level> <level label="iii"> <text>current in the payment of all tax obligations to the State or any unit or subdivision of the State; and</text> </level> <level label="iv"> <text>not in default under the terms of any contract with, indebtedness to, or grant from the State or any unit or subdivision of the State.</text> </level> </level> <level label="4"> <text>To be eligible for the tax credit described in paragraph (2) of this subsection, the qualified investor may not, after making the proposed investment, own or control more than 25% of the equity interests in the qualified Maryland biotechnology company in which the investment is to be made.</text> </level> </level> <level label="c"> <level label="1"> <text>At least 30 days prior to making an investment in a qualified Maryland biotechnology company for which a qualified investor would be eligible for an initial tax credit certificate under subsection (b) of this section, the qualified investor shall submit an application to the Department.</text> </level> <level label="2"> <text>The application shall evidence that the qualified Maryland biotechnology company is:</text> <level label="i"> <text>in good standing;</text> </level> <level label="ii"> <text>current in the payment of all tax obligations to the State or any unit or subdivision of the State; and</text> </level> <level label="iii"> <text>not in default under the terms of any contract with, indebtedness to, or grant from the State or any unit or subdivision of the State.</text> </level> </level> <level label="3"> <level label="i"> <text>Subject to subparagraph (ii) of this paragraph, the Department shall:</text> <level label="1"> <text>approve all applications that qualify for credits under this section on a first–come, first–served basis; and</text> </level> <level label="2"> <text>within 30 days of receipt of an application, certify the amount of any approved tax credits to a qualified investor.</text> </level> </level> <level label="ii"> <text>The Department may not issue any tax credit certificates under this section after June 30, 2028.</text> </level> </level> <level label="4"> <level label="i"> <text>After the date on which the Department issues an initial tax credit certificate under this section, a qualified investor shall have 30 calendar days to make an investment in a qualified Maryland biotechnology company under this section.</text> </level> <level label="ii"> <text>Within 10 calendar days after the date on which a qualified investor makes the investment, the qualified investor shall provide to the Department notice and proof of the making of the investment, including:</text> <level label="1"> <text>the date of the investment;</text> </level> <level label="2"> <text>the amount invested;</text> </level> <level label="3"> <text>proof of the receipt of the invested funds by the qualified Maryland biotechnology company;</text> </level> <level label="4"> <text>a complete description of the nature of the ownership interest in the equity of the qualified Maryland biotechnology company acquired in consideration of the investment; and</text> </level> <level label="5"> <text>any reasonable supporting documentation the Department may require.</text> </level> </level> <level label="iii"> <text>If a qualified investor does not provide the notice and proof of the making of the investment required in subparagraph (ii) of this paragraph within 40 calendar days after the date on which the Department issues an initial tax credit certificate under this section:</text> <level label="1"> <text>the Department shall rescind the initial tax credit certificate; and</text> </level> <level label="2"> <text>the credit amount allocated to the rescinded certificate shall revert to the Maryland Biotechnology Investment Tax Credit Reserve Fund and shall be available in the applicable fiscal year for allocation by the Department to other initial tax credit certificates in accordance with the provisions of this section.</text> </level> </level> </level> </level> <level label="d"> <level label="1"> <text>The tax credit allowed in an initial tax credit certificate issued under this section is:</text> <level label="i"> <text>except as provided in item (ii) of this paragraph, 33% of the investment in a qualified Maryland biotechnology company, not to exceed $250,000; or</text> </level> <level label="ii"> <text>50% of the investment in the qualified Maryland biotechnology company, not to exceed $500,000, if a qualified Maryland biotechnology company:</text> <level label="1"> <text>is located in Allegany County, Dorchester County, Garrett County, or Somerset County; or</text> </level> <level label="2"> <text>is located in a Regional Institution Strategic Enterprise zone that is designated under Title 5, Subtitle 14 of the Economic Development Article, is based on technology that was developed at a qualified institution within that zone, and has been in active business not longer than 7 years.</text> </level> </level> </level> <level label="2"> <text>During any fiscal year, the Secretary may not certify eligibility for tax credits for investments in a single qualified Maryland biotechnology company that in the aggregate exceed 10% of the total appropriations to the Maryland Biotechnology Investment Tax Credit Reserve Fund for that fiscal year.</text> </level> <level label="3"> <text>If the tax credit allowed under this section in any taxable year exceeds the total tax otherwise payable by the qualified investor for that taxable year, the qualified investor may claim a refund in the amount of the excess.</text> </level> </level> <level label="e"> <level label="1"> <text>In this subsection, “Reserve Fund” means the Maryland Biotechnology Investment Tax Credit Reserve Fund established under paragraph (2) of this subsection.</text> </level> <level label="2"> <level label="i"> <text>There is a Biotechnology Investment Tax Credit Reserve Fund which is a special continuing, nonlapsing fund that is not subject to § 7–302 of the State Finance and Procurement Article.</text> </level> <level label="ii"> <text>The money in the Fund shall be invested and reinvested by the Treasurer, and interest and earnings shall be credited to the General Fund.</text> </level> </level> <level label="3"> <level label="i"> <text>Subject to the provisions of this subsection, the Secretary shall issue an initial tax credit certificate for each approved investment in a qualified Maryland biotechnology company eligible for a tax credit.</text> </level> <level label="ii"> <text>An initial tax credit certificate issued under this subsection shall state the maximum amount of tax credit for which the qualified investor is eligible.</text> </level> <level label="iii"> <level label="1"> <text>Except as otherwise provided in this subparagraph, for any fiscal year, the Secretary may not issue initial tax credit certificates for credit amounts in the aggregate totaling more than the amount appropriated to the Reserve Fund for that fiscal year in the State budget as approved by the General Assembly.</text> </level> <level label="2"> <text>If the aggregate credit amounts under initial tax credit certificates issued in a fiscal year total less than the amount appropriated to the Reserve Fund for that fiscal year, any excess amount shall remain in the Reserve Fund and may be issued under initial tax credit certificates for the next fiscal year.</text> </level> <level label="3"> <text>For any fiscal year, if funds are transferred from the Reserve Fund under the authority of any provision of law other than under paragraph (4) of this subsection, the maximum credit amounts in the aggregate for which the Secretary may issue initial tax credit certificates shall be reduced by the amount transferred.</text> </level> </level> <level label="iv"> <text>For each fiscal year, the Governor shall include in the budget bill an appropriation to the Reserve Fund.</text> </level> <level label="v"> <text>Notwithstanding the provisions of § 7–213 of the State Finance and Procurement Article, the Governor may not reduce an appropriation to the Reserve Fund in the State budget as approved by the General Assembly.</text> </level> <level label="vi"> <text>Based on the actual amount of an investment made by a qualified investor, the Secretary shall issue a final tax credit certificate to the qualified investor.</text> </level> </level> <level label="4"> <level label="i"> <text>Except as provided in this paragraph, money appropriated to the Reserve Fund shall remain in the Fund.</text> </level> <level label="ii"> <level label="1"> <text>Within 15 days after the end of each calendar quarter, the Department shall notify the Comptroller as to each final credit certificate issued during the quarter:</text> </level> <level label="A"> <text>the maximum credit amount stated in the initial tax credit certificate for the investment; and</text> </level> <level label="B"> <text>the final certified credit amount for the investment.</text> </level> <level label="2"> <text>On notification that an investment has been certified, the Comptroller shall transfer an amount equal to the credit amount stated in the initial tax credit certificate for the investment from the Reserve Fund to the General Fund.</text> </level> </level> </level> </level> <level label="f"> <level label="1"> <text>The credit claimed under this section shall be recaptured as provided in paragraph (2) of this subsection if within 2 years from the close of the taxable year for which the credit is claimed:</text> <level label="i"> <text>the qualified investor sells, transfers, or otherwise disposes of the ownership interest in the qualified Maryland biotechnology company that gave rise to the credit; or</text> </level> <level label="ii"> <text>the qualified Maryland biotechnology company that gave rise to the credit ceases operating as an active business with its headquarters and base of operations in the State.</text> </level> </level> <level label="2"> <text>The amount required to be recaptured under this subsection is the product of multiplying:</text> <level label="i"> <text>the total amount of the credit claimed or, in the case of an event described in paragraph (1)(i) of this subsection, the portion of the credit attributable to the ownership interest disposed of; and</text> </level> <level label="ii"> <level label="1"> <text>100%, if the event requiring recapture of the credit occurs during the taxable year for which the tax credit is claimed;</text> </level> <level label="2"> <text>67%, if the event requiring recapture of the credit occurs during the first year after the close of the taxable year for which the tax credit is claimed; or</text> </level> <level label="3"> <text>33%, if the event requiring recapture of the credit occurs more than 1 year but not more than 2 years after the close of the taxable year for which the tax credit is claimed.</text> </level> </level> </level> <level label="3"> <text>The qualified investor that claimed the credit shall pay the amount to be recaptured as determined under paragraph (2) of this subsection as taxes payable to the State for the taxable year in which the event requiring recapture of the credit occurs.</text> </level> </level> <level label="g"> <level label="1"> <text>The Department may revoke its initial or final certification of an approved credit under this section if any representation in connection with the application for the certification is determined by the Department to have been false when made.</text> </level> <level label="2"> <text>The revocation may be in full or in part as the Department may determine and, subject to paragraph (3) of this subsection, shall be communicated to the qualified investor and the Comptroller.</text> </level> <level label="3"> <text>The qualified investor shall have an opportunity to appeal any revocation to the Department prior to notification of the Comptroller.</text> </level> <level label="4"> <text>The Comptroller may make an assessment against the qualified investor to recapture any amount of tax credit that the qualified investor has already claimed.</text> </level> </level> <level label="h"> <text>In accordance with § 2.5–109 of the Economic Development Article, the Department shall report on the initial tax credit certificates awarded for the calendar year and the qualified Maryland biotechnology companies that received an investment for which an initial tax credit certificate was awarded.</text> </level> <level label="i"> <text>The Department and the Comptroller jointly shall adopt regulations to carry out the provisions of this section and to specify criteria and procedures for application for, approval of, and monitoring continuing eligibility for the tax credit under this section.</text> </level> <level label="j"> <text>If a company receives an investment under subsection (a)(7)(ii) of this section and fails to satisfy the requirements for a qualified Maryland biotechnology company within 2 months, the Department shall revoke any final tax credit certificates that have been issued and recapture any tax credits already claimed by the qualified investor.</text> </level> </section> <section article="gtg" article_name="Tax - General" number="10-726" title_number="10" title_name="Income Tax" subtitle_number="7" subtitle_name="Income Tax Credits"> <level label="a"> <level label="1"> <text>In this section the following words have the meanings indicated.</text> </level> <level label="2"> <text>“Cellulosic ethanol technology” means technology that is used to develop cellulosic biomass for conversion to ethanol fuel.</text> </level> <level label="3"> <text>“Department” means the Department of Commerce.</text> </level> <level label="4"> <text>“Qualified research and development expenses” means expenses paid or incurred for cellulosic ethanol technology research and development that is conducted in the State.</text> </level> </level> <level label="b"> <text>Subject to the limitations of this section, an individual or corporation may claim a credit against the State income tax in an amount equal to 10% of the qualified research and development expenses paid or incurred by the individual or corporation during the taxable year.</text> </level> <level label="c"> <level label="1"> <text>By September 15 of the calendar year following the end of the taxable year in which the qualified research and development expenses were paid or incurred, an individual or corporation shall submit an application to the Department for the credit allowed under this section.</text> </level> <level label="2"> <level label="i"> <text>The total amount of credits approved by the Department under this section may not exceed $250,000 for any calendar year.</text> </level> <level label="ii"> <text>If the total amount of credits applied for by all individuals and corporations under this section exceeds the maximum specified under subparagraph (i) of this paragraph, the Department shall approve a credit under this section for each applicant in an amount equal to the product of multiplying the credit applied for by the applicant times a fraction:</text> <level label="1"> <text>the numerator of which is the maximum specified under subparagraph (i) of this paragraph; and</text> </level> <level label="2"> <text>the denominator of which is the total of all credits applied for by all applicants in the calendar year.</text> </level> </level> </level> <level label="3"> <text>By December 15 of the calendar year following the end of the taxable year in which the qualified research and development expenses were paid or incurred, the Department shall certify to the individual or corporation the amount of the research and development tax credit approved by the Department for the individual or corporation under this section.</text> </level> <level label="4"> <text>To claim the approved credit allowed under this section, an individual or corporation shall:</text> <level label="i"> <text>file an amended income tax return for the taxable year in which the qualified research and development expenses were paid or incurred; and</text> </level> <level label="ii"> <text>attach a copy of the Department’s certification of the approved credit amount to the amended income tax return.</text> </level> </level> </level> <level label="d"> <text>If the credit allowed under this section in any taxable year exceeds the State income tax for that taxable year, an individual or corporation may apply the excess as a credit against the State income tax for succeeding taxable years until the earlier of:</text> <level label="1"> <text>the full amount of the excess is used; or</text> </level> <level label="2"> <text>the expiration of the 15th taxable year after the taxable year in which the qualified research and development expenses were paid or incurred.</text> </level> </level> <level label="e"> <level label="1"> <text>In determining the amount of the credit under this section:</text> <level label="i"> <text>all members of the same controlled group of corporations, as defined under § 41(f) of the Internal Revenue Code, shall be treated as a single taxpayer; and</text> </level> <level label="ii"> <text>the credit allowable by this section to each member shall be its proportionate share of the qualified research and development expenses giving rise to the credit.</text> </level> </level> <level label="2"> <text>The Comptroller shall adopt regulations providing for:</text> <level label="i"> <text>determination of the amount of the credit under this section in the case of trades or businesses, whether or not incorporated, that are under common control;</text> </level> <level label="ii"> <text>pass–through and allocation of the credit in the case of estates and trusts, partnerships, unincorporated trades or businesses, and S corporations;</text> </level> <level label="iii"> <text>adjustments in the case of acquisitions and dispositions described in § 41(f)(3) of the Internal Revenue Code; and</text> </level> <level label="iv"> <text>determination of the credit in the case of short taxable years.</text> </level> </level> </level> <level label="f"> <level label="1"> <text>The Department and the Comptroller jointly shall adopt regulations to prescribe standards for determining when research or development is considered conducted in the State for purposes of determining the credit under this section.</text> </level> <level label="2"> <text>In adopting regulations under this subsection, the Department and the Comptroller may consider:</text> <level label="i"> <text>the location where services are performed;</text> </level> <level label="ii"> <text>the residence or business location of the person or persons performing services;</text> </level> <level label="iii"> <text>the location where supplies used in research and development are consumed; and</text> </level> <level label="iv"> <text>any other factors that the Department determines are relevant for the determination.</text> </level> </level> </level> <level label="g"> <text>The credit under this section does not apply to any qualified research and development expenses paid or incurred after December 31, 2016.</text> </level> </section> <section article="gtg" article_name="Tax - General" number="10-730" title_number="10" title_name="Income Tax" subtitle_number="7" subtitle_name="Income Tax Credits"> <level label="a"> <level label="1"> <text>In this section the following words have the meanings indicated.</text> </level> <level label="2"> <text>“Department” means the Department of Commerce.</text> </level> <level label="3"> <text>“Digital animation project” means the creation, development, and production of computer–generated animation content for distribution or exhibition to the general public.</text> </level> <level label="4"> <level label="i"> <text>“Film production activity” means:</text> <level label="1"> <text>the production of a film or video project that is intended for nationwide commercial distribution; and</text> </level> <level label="2"> <text>for a television series, each season of the television series.</text> </level> </level> <level label="ii"> <text>“Film production activity” includes the production of:</text> <level label="1"> <text>a feature film;</text> </level> <level label="2"> <text>a television project;</text> </level> <level label="3"> <text>a commercial;</text> </level> <level label="4"> <text>a corporate film;</text> </level> <level label="5"> <text>a music video;</text> </level> <level label="6"> <text>a digital animation project;</text> </level> <level label="7"> <text>a documentary; or</text> </level> <level label="8"> <text>a talk, reality, or game show.</text> </level> </level> <level label="iii"> <text>“Film production activity” does not include production of:</text> <level label="1"> <text>a student film;</text> </level> <level label="2"> <text>a noncommercial personal video;</text> </level> <level label="3"> <text>a sports broadcast;</text> </level> <level label="4"> <text>a broadcast of a live event;</text> </level> <level label="5"> <text>a video, computer, or social networking game;</text> </level> <level label="6"> <text>pornography;</text> </level> <level label="7"> <text>an infomercial;</text> </level> <level label="8"> <text>a digital project or an animation project other than a digital animation project; or</text> </level> <level label="9"> <text>a multimedia project.</text> </level> </level> </level> <level label="5"> <text>“Maryland small or independent film entity” means a qualified film production entity that:</text> <level label="i"> <text>has been incorporated in Maryland for at least 3 months;</text> </level> <level label="ii"> <text>is independently owned and operated;</text> </level> <level label="iii"> <text>is not a subsidiary of another entity;</text> </level> <level label="iv"> <text>is not dominant in its field of operation;</text> </level> <level label="v"> <text>employs 25 or fewer full–time employees; and</text> </level> <level label="vi"> <text>employs Maryland residents as at least 40% of its workforce in the film production activity.</text> </level> </level> <level label="6"> <text>“Pornography” means any production for which records are required to be maintained under § 2257 of Title 18, U.S.C., with respect to any performer in such production engaging in sexually explicit conduct.</text> </level> <level label="7"> <text>“Qualified film production entity” means an entity that:</text> <level label="i"> <text>is carrying out a film production activity; and</text> </level> <level label="ii"> <text>the Secretary determines to be eligible for the tax credit under this section in accordance with subsection (c) of this section.</text> </level> </level> <level label="8"> <text>“Secretary” means the Secretary of Commerce.</text> </level> <level label="9"> <text>“Television series” means a group of program episodes intended for television broadcast or transmission with a common series title, with or without a predetermined number of episodes, and shall include a miniseries and a pilot episode produced for an intended television series.</text> </level> <level label="10"> <level label="i"> <text>“Total direct costs”, with respect to a film production activity, means the total costs incurred in the State that are necessary to carry out the film production activity.</text> </level> <level label="ii"> <text>“Total direct costs” includes costs incurred for:</text> <level label="1"> <text>employee wages and benefits;</text> </level> <level label="2"> <text>fees for services;</text> </level> <level label="3"> <text>acquiring or leasing property;</text> </level> <level label="4"> <text>salaries, wages, or other compensation for writers, directors, or producers; and</text> </level> <level label="5"> <text>any other expense necessary to carry out a film production activity, including costs associated with:</text> </level> <level label="A"> <text>set construction and operation;</text> </level> <level label="B"> <text>wardrobe, makeup, and related services;</text> </level> <level label="C"> <text>photography and sound synchronization, lighting, and related services and materials;</text> </level> <level label="D"> <text>editing and related services, including film processing, transfers of film to tape or digital format, sound mixing, computer graphic services, special effects services, and animation services;</text> </level> <level label="E"> <text>salary, wages, and other compensation including related benefits, for work performed in the State, paid to persons employed in the production;</text> </level> <level label="F"> <text>rental of facilities in the State and equipment used in the State;</text> </level> <level label="G"> <text>leasing of vehicles;</text> </level> <level label="H"> <text>food and lodging;</text> </level> <level label="I"> <text>music, if performed, composed, or recorded by a Maryland musician or published by a person or company domiciled in Maryland;</text> </level> <level label="J"> <text>travel expenses incurred to bring persons employed, either directly or indirectly, in the production of the project to Maryland, but not including expenses of these persons departing from Maryland; and</text> </level> <level label="K"> <text>legal and accounting services performed by attorneys or accountants licensed in Maryland.</text> </level> </level> <level label="iii"> <text>“Total direct costs” does not include any salary, wages, or other compensation for personal services of an individual who receives more than $500,000 in salary, wages, or other compensation for personal services in connection with any film production activity.</text> </level> </level> </level> <level label="a–1"> <text>The purpose of the tax credit allowed under this section is to incentivize and promote film production activity in the State to stimulate the local economy by creating jobs, fostering investment in industry infrastructure, and boosting tourism.</text> </level> <level label="b"> <level label="1"> <text>A qualified film production entity may claim a credit against the State income tax for film production activities in the State in an amount equal to the amount stated in the final tax credit certificate approved by the Secretary for film production activities.</text> </level> <level label="2"> <text>If the tax credit allowed under this section in any taxable year exceeds the total tax otherwise payable by the qualified film production entity for that taxable year, the qualified film production entity may claim a refund in the amount of the excess.</text> </level> </level> <level label="c"> <level label="1"> <text>Before beginning a film production activity, a film production entity shall submit to the Department an application to qualify as a film production entity.</text> </level> <level label="2"> <text>The application shall describe the anticipated film production activity, including:</text> <level label="i"> <text>the projected total budget;</text> </level> <level label="ii"> <text>the estimated number of Maryland resident and out–of–state employees and total wages to be paid; and</text> </level> <level label="iii"> <text>the anticipated dates for carrying out the major elements of the film production activity.</text> </level> </level> <level label="3"> <text>Except as provided in subsection (h) of this section, to qualify as a film production entity, the estimated total direct costs incurred in the State must exceed $250,000.</text> </level> <level label="4"> <text>The application shall include any other information required by the Secretary.</text> </level> <level label="5"> <text>For a film production entity with total direct costs that exceed $250,000, the Secretary may require the information provided in an application to be verified by an independent auditor selected and paid for by the film production entity seeking certification.</text> </level> <level label="6"> <text>The Secretary shall:</text> <level label="i"> <text>determine if the film production entity qualifies for the credit under this section; and</text> </level> <level label="ii"> <text>notify the Comptroller of the estimated amount of total direct costs and the taxable year the credit will be claimed.</text> </level> </level> <level label="7"> <level label="i"> <text>A qualified film production entity may amend its initial application submitted under paragraph (1) of this subsection if an independent auditor selected and paid for by the qualified film production entity has verified that the projected total budget in its initial application has increased or decreased by at least 50%.</text> </level> <level label="ii"> <text>The Secretary shall:</text> <level label="1"> <text>evaluate an amended application submitted under subparagraph (i) of this paragraph;</text> </level> <level label="2"> <text>determine if the film production entity continues to qualify for the credit under this section; and</text> </level> <level label="3"> <text>subject to the availability of credit amount in the fiscal year, if the Secretary approves the amended application, notify the Comptroller of the amended estimated amount of total direct costs and the taxable year the credit will be claimed.</text> </level> </level> </level> </level> <level label="d"> <level label="1"> <text>After completion of the film production activity, a qualified film production entity shall apply to the Department for a tax credit certificate.</text> </level> <level label="2"> <text>The application shall be on a form required by the Secretary and shall include:</text> <level label="i"> <text>proof of the total direct costs that qualify for the tax credit; and</text> </level> <level label="ii"> <text>the number of employees hired and wages paid.</text> </level> </level> <level label="3"> <text>Subject to subsections (f) and (h) of this section, the Secretary shall determine the total direct costs that qualify for the tax credit and issue a tax credit certificate for:</text> <level label="i"> <text>except as provided in item (ii) of this paragraph, 28% of the total direct costs that qualify for the tax credit; and</text> </level> <level label="ii"> <text>for a television series, 30% of the total direct costs that qualify for the tax credit.</text> </level> </level> </level> <level label="e"> <text>In accordance with § 2.5–109 of the Economic Development Article, the Department shall submit a report on film production activity in the State and the economic benefits to the State resulting from film production activity during the reporting period.</text> </level> <level label="f"> <level label="1"> <text>Except as provided in paragraph (2) of this subsection, the Secretary may not issue tax credit certificates for credit amounts in the aggregate totaling more than:</text> <level label="i"> <text>for fiscal year 2014, $25,000,000;</text> </level> <level label="ii"> <text>for fiscal year 2015, $7,500,000;</text> </level> <level label="iii"> <text>for fiscal year 2016, $7,500,000;</text> </level> <level label="iv"> <text>for fiscal year 2019, $8,000,000;</text> </level> <level label="v"> <text>for fiscal year 2020, $11,000,000;</text> </level> <level label="vi"> <text>for fiscal years 2021 through 2023, $12,000,000;</text> </level> <level label="vii"> <text>for fiscal year 2024, $15,000,000;</text> </level> <level label="viii"> <text>for fiscal year 2025, $17,500,000; and</text> </level> <level label="ix"> <text>for fiscal year 2026 and each fiscal year thereafter, $12,000,000.</text> </level> </level> <level label="2"> <text>If the aggregate credit amounts under the tax credit certificates issued by the Secretary total less than the maximum provided under paragraph (1) of this subsection in any fiscal year, any excess amount may be carried forward and issued under tax credit certificates in a subsequent fiscal year.</text> </level> <level label="3"> <text>The Secretary may not issue tax credit certificates for credit amounts totaling more than $10,000,000 in the aggregate for a single film production activity.</text> </level> <level label="4"> <level label="i"> <text>For fiscal year 2019 and each fiscal year thereafter, the Secretary shall make 10% of the credit amount authorized under paragraph (1) of this subsection available for Maryland small or independent film entities.</text> </level> <level label="ii"> <text>If the total amount of credits applied for by Maryland small or independent film entities is less than the amount made available under subparagraph (i) of this paragraph, the Secretary shall make available the unused amount of credits for use by qualified film production entities.</text> </level> </level> </level> <level label="g"> <level label="1"> <text>Except as provided in paragraph (2) of this subsection, a qualified film production entity that receives a tax credit certificate under this section for a film production activity shall include:</text> <level label="i"> <text>for a feature film project, a 5–second long static or animated logo that promotes the State in the end credits before the below–the–line crew crawl for the life of the project and a link to the State’s website on the project’s website;</text> </level> <level label="ii"> <text>for a television series project, an embedded 5–second long static or animated logo that promotes the State during each broadcast worldwide for the life of the project and a link to the State’s website on the project’s website; or</text> </level> <level label="iii"> <text>for any other project, the State logo at the end of each project and in online promotions.</text> </level> </level> <level label="2"> <text>In lieu of including a State logo as required under paragraph (1) of this subsection, the qualified film production entity may offer alternative marketing opportunities to be evaluated by the Department to ensure that those opportunities offer equal or greater promotional value to the State.</text> </level> </level> <level label="h"> <level label="1"> <text>For a Maryland small or independent film entity to qualify as a film production entity:</text> <level label="i"> <text>the estimated total direct costs incurred in the State shall exceed $25,000; and</text> </level> <level label="ii"> <text>at least 50% of the filming of the film production activity must occur within the State.</text> </level> </level> <level label="2"> <text>The Secretary shall determine the total direct costs that qualify for the tax credit and issue a tax credit certificate to a Maryland small or independent film entity for 28% of the total direct costs that qualify for the tax credit, not to exceed $125,000.</text> </level> </level> <level label="i"> <text>The Department and the Comptroller jointly shall adopt regulations to carry out the provisions of this section and to specify criteria and procedures for the application for, approval of, and monitoring of continuing eligibility for the tax credit under this section.</text> </level> </section> <section article="gtg" article_name="Tax - General" number="10-732" title_number="10" title_name="Income Tax" subtitle_number="7" subtitle_name="Income Tax Credits"> <level label="a"> <level label="1"> <text>In this section the following words have the meanings indicated.</text> </level> <level label="2"> <text>“Costs” means the costs to an individual or corporation for:</text> <level label="i"> <text>security clearance administrative expenses incurred with regard to an employee in the State including, but not limited to:</text> <level label="1"> <text>processing application requests for clearances for employees in the State;</text> </level> <level label="2"> <text>maintaining, upgrading, or installing computer systems in the State required to obtain federal security clearances; and</text> </level> <level label="3"> <text>training employees in the State to administer the application process; and</text> </level> </level> <level label="ii"> <text>construction and equipment costs incurred to construct or renovate a sensitive compartmented information facility (“SCIF”) located in the State as required by the federal government.</text> </level> </level> <level label="3"> <text>“Department” means the Department of Commerce.</text> </level> <level label="4"> <text>“Secretary” means the Secretary of Commerce.</text> </level> <level label="5"> <text>“Small business” has the meaning stated in § 7–218 of this article.</text> </level> </level> <level label="b"> <level label="1"> <text>Subject to the limitations of this section, for a taxable year beginning after December 31, 2022, but before January 1, 2033, an individual or a corporation that employs not more than 500 employees may claim credits against the State income tax for:</text> <level label="i"> <text>security clearance administrative expenses, not to exceed $200,000;</text> </level> <level label="ii"> <text>expenses incurred for rental payments owed during the first year of a rental agreement for spaces leased in the State if the individual or corporation is a small business that performs security–based contracting, not to exceed $200,000; and</text> </level> <level label="iii"> <text>Subject to paragraph (2) of this subsection, construction and equipment costs incurred to construct or renovate a single SCIF in an amount equal to the lesser of 50% of the costs or $200,000.</text> </level> </level> <level label="2"> <text>The total amount of construction and equipment costs incurred to construct or renovate multiple SCIFs for which an individual or a corporation is eligible to claim as a credit against the State income tax is $500,000.</text> </level> </level> <level label="c"> <level label="1"> <text>By September 15 of the calendar year following the end of the taxable year in which the costs were incurred, an individual or a corporation shall submit an application to the Department for the credits allowed under subsection (b) of this section.</text> </level> <level label="2"> <level label="i"> <text>The total amount of credits approved by the Department under subsection (b) of this section may not exceed $2,000,000 for any calendar year.</text> </level> <level label="ii"> <text>If the total amount of credits applied for by all individuals and corporations under subsection (b) of this section exceeds the maximum specified under subparagraph (i) of this paragraph, the Department shall approve a credit under subsection (b) of this section for each applicant in an amount equal to the product of multiplying the credit applied for by the applicant times a fraction:</text> <level label="1"> <text>the numerator of which is the maximum specified under subparagraph (i) of this paragraph; and</text> </level> <level label="2"> <text>the denominator of which is the total of all credits applied for by all applicants under subsection (b) of this section in the calendar year.</text> </level> </level> </level> <level label="3"> <text>By December 15 of the calendar year following the end of the taxable year in which the costs were incurred, the Department shall certify to the individual or corporation the amount of tax credits approved by the Department for the individual or corporation under this section.</text> </level> <level label="4"> <text>To claim the approved credits allowed under this section, an individual or a corporation shall:</text> <level label="i"> <level label="1"> <text>file an amended income tax return for the taxable year in which the costs were incurred; and</text> </level> <level label="2"> <text>attach a copy of the Department’s certification of the approved credit amount to the amended income tax return; or</text> </level> </level> <level label="ii"> <text>subject to subsection (d) of this section, attach a copy of the Department’s certification of the approved credit amount to an income tax return filed for any taxable year after the taxable year in which the costs were incurred.</text> </level> </level> </level> <level label="d"> <text>If the credit allowed for any taxable year under this section exceeds the total tax otherwise due, an individual or corporation may apply the excess as a credit against the State income tax for succeeding taxable years until the full amount of the excess is used.</text> </level> <level label="e"> <text>The Department, in consultation with the Comptroller, shall adopt regulations to carry out the provisions of this section.</text> </level> <level label="f"> <text>In accordance with § 2.5–109 of the Economic Development Article, the Department shall submit a report on the number of credits certified in the previous calendar year.</text> </level> </section> <section article="gtg" article_name="Tax - General" number="10-733.1" title_number="10" title_name="Income Tax" subtitle_number="7" subtitle_name="Income Tax Credits"> <level label="a"> <level label="1"> <text>In this section the following words have the meanings indicated.</text> </level> <level label="2"> <text>“Cybersecurity business” means an entity organized for profit that is engaged primarily in the development of innovative and proprietary cybersecurity technology or the provision of cybersecurity service.</text> </level> <level label="3"> <text>“Cybersecurity service” means an activity that is associated with a category or subcategory identified under the Framework Core established by the National Institute of Standards and Technology’s Cybersecurity Framework.</text> </level> <level label="4"> <text>“Cybersecurity technology” means products or goods intended to detect or prevent activity intended to result in unauthorized access to, exfiltration of, manipulation of, or impairment to the integrity, confidentiality, or availability of an information system or information stored on or transiting an information system.</text> </level> <level label="5"> <text>“Department” means the Department of Commerce.</text> </level> <level label="6"> <text>“Panel” means the panel that the Department may establish under subsection (c) of this section composed of experts in the areas of cybersecurity technology and cybersecurity service.</text> </level> <level label="7"> <text>“Qualified buyer” means any entity that has fewer than 50 employees in the State and that is required to file an income tax return in the State.</text> </level> <level label="8"> <text>“Qualified seller” means a cybersecurity business that:</text> <level label="i"> <text>has its headquarters and base of operations in the State;</text> </level> <level label="ii"> <level label="1"> <text>has less than $5,000,000 in annual revenue;</text> </level> <level label="2"> <text>is a minority–owned, woman–owned, veteran–owned, or service–disabled–veteran–owned business; or</text> </level> <level label="3"> <text>is located in a historically underutilized business zone designated by the United States Small Business Administration;</text> </level> </level> <level label="iii"> <level label="1"> <text>owns or has properly licensed any proprietary cybersecurity technology; or</text> </level> <level label="2"> <text>provides a cybersecurity service;</text> </level> </level> <level label="iv"> <text>is in good standing;</text> </level> <level label="v"> <text>is current in the payment of all tax obligations to the State or any unit or subdivision of the State; and</text> </level> <level label="vi"> <text>is not in default under the terms of any contract with, indebtedness to, or grant from the State or any unit or subdivision of the State.</text> </level> </level> </level> <level label="b"> <level label="1"> <text>Subject to paragraphs (2) and (3) of this subsection, a qualified buyer may claim a credit against the State income tax in an amount equal to 50% of the cost incurred during the taxable year to purchase cybersecurity technology or a cybersecurity service from one or more qualified sellers.</text> </level> <level label="2"> <text>For any taxable year, the credit allowed under this section may not exceed $50,000 for each qualified buyer.</text> </level> <level label="3"> <text>For any taxable year, the aggregate credits claimed for cybersecurity technology or cybersecurity service purchased from a single qualified seller may not exceed $200,000.</text> </level> </level> <level label="c"> <level label="1"> <text>The Department, in consultation with the Maryland Technology Development Corporation, may establish a panel composed of experts in the areas of cybersecurity technology and cybersecurity service.</text> </level> <level label="2"> <text>The Department may establish the panel under service contracts with independent reviewers.</text> </level> <level label="3"> <text>The panel shall assist the Department in its determination as to whether a company is a qualified seller.</text> </level> <level label="4"> <text>A member of the panel is not eligible to receive any benefit, direct or indirect, from the tax credit under this section.</text> </level> <level label="5"> <level label="i"> <text>Except as provided in subparagraph (ii) of this paragraph, Division II of the State Finance and Procurement Article does not apply to a service that the Department obtains under this section.</text> </level> <level label="ii"> <text>The Department is subject to Title 12, Subtitle 4 of the State Finance and Procurement Article for services the Department obtains under this section.</text> </level> </level> </level> <level label="d"> <level label="1"> <level label="i"> <text>A qualified buyer eligible for the credit under this section may apply to the Department for a credit certificate that states the amount of the credit the qualified buyer may claim under subsection (b) of this section.</text> </level> <level label="ii"> <text>A qualified buyer shall attach the credit certificate to the income tax return on which the qualified buyer claims the credit under subsection (b) of this section.</text> </level> </level> <level label="2"> <text>Subject to paragraph (3) of this subsection, the Secretary of Commerce shall approve each application under paragraph (1) of this subsection that qualifies for a credit certificate.</text> </level> <level label="3"> <level label="i"> <text>The total amount of the credit certificates approved by the Secretary of Commerce under this subsection may not exceed:</text> <level label="1"> <text>for taxable year 2018, $2,000,000; and</text> </level> <level label="2"> <text>for taxable year 2019 and each taxable year thereafter, $4,000,000.</text> </level> </level> <level label="ii"> <text>For each taxable year, the Secretary of Commerce shall award 25% of the amount of tax credits authorized under subparagraph (i) of this paragraph to qualified buyers that purchase cybersecurity services.</text> </level> </level> </level> <level label="e"> <level label="1"> <text>The Department may revoke its certification of a credit under this section if any representation made in connection with the application for the certification is determined by the Department to have been false.</text> </level> <level label="2"> <text>The revocation may be in full or in part as the Department may determine and, subject to paragraph (3) of this subsection, shall be communicated to the qualified buyer and the Comptroller.</text> </level> <level label="3"> <text>The qualified buyer shall have an opportunity to appeal any revocation to the Department before notification of the Comptroller.</text> </level> <level label="4"> <text>The Comptroller may make an assessment against the qualified buyer to recapture any amount of tax credit that the qualified buyer has already claimed.</text> </level> </level> <level label="f"> <text>In accordance with § 2.5–109 of the Economic Development Article, the Department shall submit a report on the credit certificates awarded under this section for the calendar year.</text> </level> <level label="g"> <text>The Department and the Comptroller jointly shall adopt regulations to carry out this section and to specify criteria and procedures for application for, approval of, and monitoring continuing eligibility for the tax credit under this section.</text> </level> </section> <section article="gtg" article_name="Tax - General" number="10-734" title_number="10" title_name="Income Tax" subtitle_number="7" subtitle_name="Income Tax Credits"> <level label="a"> <text>In this section, “qualified vehicle” means a Class F (tractor) vehicle described under § 13–923 of the Transportation Article that is titled and registered in the State.</text> </level> <level label="b"> <text>Subject to the limitations of this section, an individual or a corporation may claim a credit against the State income tax for the expense of registering a qualified vehicle in the State.</text> </level> <level label="c"> <level label="1"> <text>For any taxable year, the credit allowed under this section may not exceed the lesser of:</text> <level label="i"> <text>$400 for each qualified vehicle; or</text> </level> <level label="ii"> <text>the State income tax for that taxable year.</text> </level> </level> <level label="2"> <text>The unused amount of the credit may not be carried over to any other taxable year.</text> </level> </level> </section> <section article="gtg" article_name="Tax - General" number="10-734.1" title_number="10" title_name="Income Tax" subtitle_number="7" subtitle_name="Income Tax Credits"> <level label="a"> <level label="1"> <text>In this section the following words have the meanings indicated.</text> </level> <level label="2"> <text>“Administration” means the Motor Vehicle Administration.</text> </level> <level label="3"> <text>“Qualified vehicle” means a Class F (tractor) vehicle described under § 13–923 of the Transportation Article that is titled and registered in the State.</text> </level> </level> <level label="b"> <text>Subject to the limitations of this section, an individual or a corporation that obtains a tax credit certificate from the Administration may claim a credit against the State income tax for the expense of registering a qualified vehicle in the State during the taxable year.</text> </level> <level label="c"> <level label="1"> <text>Subject to paragraph (2) of this subsection, on application by a taxpayer, the Administration shall issue a tax credit certificate in the amount of $400 for each qualified vehicle registered by the taxpayer during the taxable year.</text> </level> <level label="2"> <text>For any taxable year, the Administration may not issue an aggregate amount of tax credit certificates totaling more than:</text> <level label="i"> <text>$10,000 to any one taxpayer; or</text> </level> <level label="ii"> <text>$500,000 to all taxpayers.</text> </level> </level> </level> <level label="d"> <text>The Administration shall approve all applications that qualify for a tax credit certificate:</text> <level label="1"> <text>on a first–come, first–served basis; and</text> </level> <level label="2"> <text>in a timely manner.</text> </level> </level> <level label="e"> <level label="1"> <text>For any taxable year, the credit allowed under this section may not exceed the State income tax for that taxable year.</text> </level> <level label="2"> <text>The unused amount of the credit may not be carried over to any other taxable year.</text> </level> </level> <level label="f"> <text>On or before January 31 each taxable year, the Administration shall report to the Comptroller on the tax credit certificates issued under this section during the prior taxable year.</text> </level> <level label="g"> <text>The Administration, in consultation with the Comptroller, shall adopt regulations to carry out this section.</text> </level> </section> <section article="gtg" article_name="Tax - General" number="10-736" title_number="10" title_name="Income Tax" subtitle_number="7" subtitle_name="Income Tax Credits"> <level label="a"> <level label="1"> <text>In this section the following words have the meanings indicated.</text> </level> <level label="2"> <text>“Department” means the Department of Housing and Community Development.</text> </level> <level label="3"> <text>“Donation” means an irrevocable gift worth $500 or more of:</text> <level label="i"> <text>cash; or</text> </level> <level label="ii"> <text>publicly traded securities.</text> </level> </level> <level label="4"> <text>“Eligible community foundation” means an organization that:</text> <level label="i"> <text>is exempt from taxation under § 501(c)(3) of the Internal Revenue Code;</text> </level> <level label="ii"> <text>is commonly known as a community trust, fund, endowment, or foundation or by another similar name that conveys the concept of a capital or endowment fund to support charitable activities in the community or area that it serves;</text> </level> <level label="iii"> <text>satisfies the public support test of § 170(b)(1)(A)(vi) of the Internal Revenue Code and regulations adopted under that section; and</text> </level> <level label="iv"> <text>is in compliance with national standards for United States community foundations established by the Community Foundations National Standards Board within the Council on Foundations.</text> </level> </level> <level label="5"> <text>“Qualified permanent endowment fund” means a fund that:</text> <level label="i"> <text>is held in perpetuity by an eligible community foundation;</text> </level> <level label="ii"> <text>is used for the benefit of charitable causes in the State; and</text> </level> <level label="iii"> <text>has an annual spending rate of 5% or less calculated using a 12–quarter trailing average of the total amount of the fund.</text> </level> </level> </level> <level label="b"> <level label="1"> <text>Subject to the limitations of this section, for the taxable year in which a taxpayer makes a donation to a qualified permanent endowment fund at an eligible community foundation, the taxpayer may claim a credit against the State income tax in the amount stated on the tax credit certificate issued under subsection (c) of this section.</text> </level> <level label="2"> <text>If the credit allowed under this section in any taxable year exceeds the State income tax for that taxable year, any unused credit may be carried forward and applied for succeeding taxable years until the earlier of:</text> <level label="i"> <text>the full amount of the credit is used; or</text> </level> <level label="ii"> <text>the expiration of the fifth year after the taxable year for which the credit was allowed.</text> </level> </level> </level> <level label="c"> <level label="1"> <text>On application by a taxpayer, the Department shall issue a credit certificate in the amount of 25% of a proposed donation to a qualified permanent endowment fund at an eligible community foundation that meets the requirements of this section.</text> </level> <level label="2"> <text>The application shall contain:</text> <level label="i"> <text>the names of the taxpayer, the eligible community foundation, and the qualified permanent endowment fund to which the donation will be made;</text> </level> <level label="ii"> <text>the taxable year in which the donation will be made;</text> </level> <level label="iii"> <text>the amount of the donation; and</text> </level> <level label="iv"> <text>any other information that the Department requires.</text> </level> </level> <level label="3"> <text>For any taxable year, the maximum amount of tax credit stated in the tax credit certificate may not exceed $50,000.</text> </level> <level label="4"> <text>The Department shall:</text> <level label="i"> <text>reserve for each taxable year at least 10% of the available credits for donations of $30,000 or less; and</text> </level> <level label="ii"> <text>approve all applications that qualify for a tax credit certificate under this subsection:</text> <level label="1"> <text>on a first–come, first–served basis; and</text> </level> <level label="2"> <text>in a timely manner.</text> </level> </level> </level> <level label="5"> <level label="i"> <text>For each taxable year, the total amount of tax credit certificates certified by the Department under this section may not exceed $250,000.</text> </level> <level label="ii"> <text>If the aggregate amount of tax credit certificates authorized under this section during a taxable year total less than the amount authorized under this paragraph, any excess amount may be authorized under tax credit certificates for the next taxable year.</text> </level> </level> </level> <level label="d"> <text>On or before January 31 of each taxable year, the Department shall report to the State Department of Assessments and Taxation and the Comptroller the donations that the Department has approved for tax credit certificates under this section during the prior taxable year.</text> </level> <level label="e"> <text>The Department shall adopt regulations to carry out the provisions of this section, including the criteria and procedures for application for, approval of, and monitoring eligibility for the tax credit authorized under this section.</text> </level> </section> <section article="gtg" article_name="Tax - General" number="10-738" effective_note="EFFECTIVE UNTIL JUNE 30, 2030 PER CHAPTER 416 OF 2025" title_number="10" title_name="Income Tax" subtitle_number="7" subtitle_name="Income Tax Credits"> <level label="a"> <level label="1"> <text>In this section the following words have the meanings indicated.</text> </level> <level label="2"> <text>“Department” means the Maryland Department of Health.</text> </level> <level label="3"> <text>“Licensed physician” means an individual who is licensed to practice medicine under Title 14 of the Health Occupations Article.</text> </level> <level label="4"> <text>“Preceptorship program” means an organized system of clinical experience that, for the purpose of attaining specified learning objectives, pairs an enrolled student of a Liaison Committee on Medical Education–accredited medical school or an individual in a postgraduate medical training program with a licensed physician who meets the qualifications as a preceptor.</text> </level> </level> <level label="b"> <level label="1"> <text>Subject to the limitations of this section, a licensed physician may claim a credit against the State income tax in the amount stated on the tax credit certificate issued under subsection (c) of this section for the taxable year in which the licensed physician served without compensation as a physician preceptor in a preceptorship program authorized by an accredited medical school and worked:</text> <level label="i"> <text>a minimum of three rotations, each consisting of 90 hours of community–based clinical training; and</text> </level> <level label="ii"> <text>in an area of the State identified as having a health care workforce shortage by the Department, in consultation with the Governor’s Workforce Development Board.</text> </level> </level> <level label="2"> <level label="i"> <text>The total amount of the credit allowed under this section for any taxable year may not exceed the State income tax imposed for that taxable year.</text> </level> <level label="ii"> <text>Any unused amount of the credit for any taxable year may not be carried over to any other taxable year.</text> </level> </level> </level> <level label="c"> <level label="1"> <text>On application by a licensed physician, the Department shall issue a credit certificate in the amount of $1,000 for each student rotation of the minimum number of hours required under subsection (b)(1)(i) of this section for which the licensed physician served as a physician preceptor without compensation.</text> </level> <level label="2"> <text>The application shall contain:</text> <level label="i"> <text>the name of the licensed physician;</text> </level> <level label="ii"> <text>information identifying the physician preceptorship in which the licensed physician participated;</text> </level> <level label="iii"> <text>the number and names of the students for whom the individual served as a physician preceptor without compensation; and</text> </level> <level label="iv"> <text>any other information that the Department requires.</text> </level> </level> <level label="3"> <text>For any taxable year, the amount of tax credit stated in the tax credit certificate may not exceed $10,000.</text> </level> <level label="4"> <text>The Department shall:</text> <level label="i"> <text>approve all applications that qualify for a tax credit certificate under this subsection on a first–come, first–served basis; and</text> </level> <level label="ii"> <text>notify a taxpayer within 45 days of receipt of the taxpayer’s application of its approval or denial.</text> </level> </level> <level label="5"> <level label="i"> <text>For each taxable year, the total amount of tax credit certificates that may be issued by the Department under this section may not exceed $100,000.</text> </level> <level label="ii"> <text>Subject to the limitation under subparagraph (iii) of this paragraph, if the aggregate amount of tax credit certificates issued under this section during a taxable year total less than the amount authorized under this paragraph, any excess amount may be issued under tax credit certificates in the next taxable year.</text> </level> <level label="iii"> <text>The aggregate amount carried forward from all prior fiscal years in accordance with subparagraph (ii) of this paragraph may not exceed $100,000.</text> </level> </level> </level> <level label="d"> <text>On or before March 1 of each taxable year, the Department shall:</text> <level label="1"> <text>report to the Comptroller on the tax credit certificates issued under this section during the prior taxable year; and</text> </level> <level label="2"> <text>report to the General Assembly, in accordance with § 2–1257 of the State Government Article, on the utilization of the credit established under this section.</text> </level> </level> <level label="e"> <text>The Department, in consultation with the Governor’s Workforce Development Board, shall adopt regulations to carry out the provisions of this section, including the criteria and procedures for application for, approval of, and monitoring eligibility for the tax credit authorized under this section.</text> </level> </section> <section article="gtg" article_name="Tax - General" number="10-739" effective_note="EFFECTIVE UNTIL JUNE 30, 2030 PER CHAPTER 416 OF 2025" title_number="10" title_name="Income Tax" subtitle_number="7" subtitle_name="Income Tax Credits"> <level label="a"> <level label="1"> <text>In this section the following words have the meanings indicated.</text> </level> <level label="2"> <text>“Department” means the Maryland Department of Health.</text> </level> <level label="3"> <text>“Licensed physician” means an individual who is licensed to practice medicine under Title 14 of the Health Occupations Article.</text> </level> <level label="4"> <text>“Nurse practitioner” has the meaning stated in § 8–101 of the Health Occupations Article.</text> </level> <level label="5"> <text>“Preceptorship program” means an organized system of clinical experience that, for the purpose of attaining specified learning objectives, pairs a nurse practitioner student enrolled in a nursing education program that is recognized by the State Board of Nursing with a nurse practitioner or licensed physician who meets the qualifications as a preceptor.</text> </level> </level> <level label="b"> <level label="1"> <text>Subject to the limitations of this section, a nurse practitioner or licensed physician may claim a credit against the State income tax in the amount stated on the tax credit certificate issued under subsection (c) of this section for the taxable year in which the nurse practitioner or licensed physician served without compensation as a preceptor in a preceptorship program approved by the State Board of Nursing and worked:</text> <level label="i"> <text>a minimum of three rotations, each consisting of at least 90 hours of community–based clinical training; and</text> </level> <level label="ii"> <text>in an area of the State identified as having a health care workforce shortage by the Department, in consultation with the Governor’s Workforce Development Board.</text> </level> </level> <level label="2"> <level label="i"> <text>The total amount of the credit allowed under this section for any taxable year may not exceed the State income tax imposed for that taxable year.</text> </level> <level label="ii"> <text>Any unused amount of the credit for any taxable year may not be carried over to any other taxable year.</text> </level> </level> </level> <level label="c"> <level label="1"> <text>On application by a nurse practitioner or licensed physician, the Department shall issue a credit certificate in the amount of $1,000 for each nurse practitioner student rotation of the minimum number of hours required under subsection (b)(1)(i) of this section for which the nurse practitioner or licensed physician served as a preceptor without compensation.</text> </level> <level label="2"> <text>The application shall contain:</text> <level label="i"> <text>the name of the nurse practitioner or licensed physician;</text> </level> <level label="ii"> <text>information identifying the preceptorship in which the nurse practitioner or licensed physician participated;</text> </level> <level label="iii"> <text>the number and names of the nurse practitioner students for whom the individual served as a preceptor without compensation; and</text> </level> <level label="iv"> <text>any other information that the Department requires.</text> </level> </level> <level label="3"> <text>For any taxable year, the amount of tax credit stated in the tax credit certificate may not exceed $10,000.</text> </level> <level label="4"> <text>The Department shall:</text> <level label="i"> <text>approve all applications that qualify for a tax credit certificate under this subsection on a first–come, first–served basis; and</text> </level> <level label="ii"> <text>notify a taxpayer within 45 days of receipt of the taxpayer’s application of its approval or denial.</text> </level> </level> <level label="5"> <level label="i"> <text>For each taxable year, the total amount of tax credit certificates that may be issued by the Department under this section may not exceed the lesser of:</text> <level label="1"> <text>the total funds in the Nurse Practitioner Preceptorship Tax Credit Fund for that year; or</text> </level> <level label="2"> <text>$100,000.</text> </level> </level> <level label="ii"> <text>If the aggregate amount of tax credit certificates issued under this section during a taxable year total less than the amount authorized under this paragraph, any excess amount may be issued under tax credit certificates in the next taxable year.</text> </level> </level> </level> <level label="d"> <level label="1"> <text>In this section, “Fund” means the Nurse Practitioner Preceptorship Tax Credit Fund established under paragraph (2) of this subsection.</text> </level> <level label="2"> <text>There is a Nurse Practitioner Preceptorship Tax Credit Fund.</text> </level> <level label="3"> <text>The Department shall administer the Fund.</text> </level> <level label="4"> <text>The purpose of the Fund is to offset the costs of the tax credit available under this section.</text> </level> <level label="5"> <text>The Fund is a special continuing, nonlapsing fund that is not subject to § 7–302 of the State Finance and Procurement Article.</text> </level> <level label="6"> <text>The State Treasurer shall hold the Fund separately, and the Comptroller shall account for the Fund.</text> </level> <level label="7"> <text>The Fund consists of:</text> <level label="i"> <text>revenue distributed to the Fund under § 8–206 of the Health Occupations Article;</text> </level> <level label="ii"> <text>money appropriated in the State budget to the Fund; and</text> </level> <level label="iii"> <text>any other money from any other source accepted for the benefit of the Fund.</text> </level> </level> <level label="8"> <text>The money in the Fund shall be invested and reinvested by the State Treasurer, and interest and earnings shall be credited to the General Fund of the State.</text> </level> <level label="9"> <level label="i"> <text>Except as otherwise provided in this paragraph, money credited or appropriated to the Fund shall remain in the Fund.</text> </level> <level label="ii"> <level label="1"> <text>Within 15 days after the end of each calendar quarter, the Department shall notify the Comptroller as to each credit certificate issued during the quarter.</text> </level> <level label="2"> <text>On notification that a credit certificate has been issued by the Department, the Comptroller shall transfer an amount equal to the credit amount stated in the tax credit certificate from the Fund to the General Fund of the State.</text> </level> </level> </level> </level> <level label="e"> <text>On or before March 1 each taxable year, the Department shall:</text> <level label="1"> <text>report to the Comptroller on the tax credit certificates issued under this section during the prior taxable year; and</text> </level> <level label="2"> <text>report to the General Assembly, in accordance with § 2–1257 of the State Government Article, on the utilization of the credit established under this section.</text> </level> </level> <level label="f"> <text>The Department, in consultation with the Governor’s Workforce Development Board, shall adopt regulations to carry out the provisions of this section, including the criteria and procedures for application for, approval of, and monitoring eligibility for the tax credit authorized under this section.</text> </level> </section> <section article="gtg" article_name="Tax - General" number="10-739.1" effective_note="EFFECTIVE UNTIL JUNE 30, 2030 PER CHAPTER 416 OF 2025" title_number="10" title_name="Income Tax" subtitle_number="7" subtitle_name="Income Tax Credits"> <level label="a"> <level label="1"> <text>In this section the following words have the meanings indicated.</text> </level> <level label="2"> <text>“Advanced practice registered nurse” has the same meaning stated in § 8–101 of the Health Occupations Article.</text> </level> <level label="3"> <text>“Department” means the Maryland Department of Health.</text> </level> <level label="4"> <text>“Licensed practical nurse” has the meaning stated in § 8–101 of the Health Occupations Article.</text> </level> <level label="5"> <text>“Preceptorship program” means an organized system of clinical experience that, for the purpose of attaining specified learning objectives, pairs a licensed practical nurse or registered nurse student enrolled in a nursing education program that is recognized by the State Board of Nursing with a licensed practical nurse, advanced practice registered nurse, or registered nurse who meets the qualifications as a preceptor.</text> </level> <level label="6"> <text>“Registered nurse” has the meaning stated in § 8–101 of the Health Occupations Article.</text> </level> </level> <level label="b"> <level label="1"> <text>Subject to the limitations of this section, a licensed practical nurse, advanced practice registered nurse, or registered nurse may claim a credit against the State income tax in the amount stated on the tax credit certificate issued under subsection (c) of this section for the taxable year in which the licensed practical nurse, advanced practice registered nurse, or registered nurse served without compensation as a preceptor in a preceptorship program approved by the State Board of Nursing and worked:</text> <level label="i"> <text>a minimum of three rotations, each consisting of at least 90 hours of community–based clinical training; and</text> </level> <level label="ii"> <text>in an area of the State identified as having a health care workforce shortage by the Department, in consultation with the Governor’s Workforce Development Board.</text> </level> </level> <level label="2"> <level label="i"> <text>The total amount of the credit allowed under this section for any taxable year may not exceed the State income tax imposed for that taxable year.</text> </level> <level label="ii"> <text>Any unused amount of the credit for any taxable year may not be carried over to any other taxable year.</text> </level> </level> </level> <level label="c"> <level label="1"> <text>On application by a licensed practical nurse, advanced practice registered nurse, or registered nurse, the Department shall issue a credit certificate in the amount of $1,000 for each student rotation of the minimum number of hours required under subsection (b)(1)(i) of this section for which the licensed practical nurse, advanced practice registered nurse, or registered nurse served as a preceptor without compensation.</text> </level> <level label="2"> <text>The application shall contain:</text> <level label="i"> <text>the name of the applicant;</text> </level> <level label="ii"> <text>information identifying the preceptorship in which the applicant participated;</text> </level> <level label="iii"> <text>the number and names of the students for whom the individual served as a preceptor without compensation; and</text> </level> <level label="iv"> <text>any other information that the Department requires.</text> </level> </level> <level label="3"> <text>For any taxable year, the amount of tax credit stated in the tax credit certificate may not exceed $10,000.</text> </level> <level label="4"> <text>The Department shall:</text> <level label="i"> <text>approve all applications that qualify for a tax credit certificate under this subsection on a first–come, first–served basis; and</text> </level> <level label="ii"> <text>notify a taxpayer within 45 days of receipt of the taxpayer’s application of its approval or denial.</text> </level> </level> <level label="5"> <level label="i"> <text>For each taxable year, the total amount of tax credit certificates that may be issued by the Department under this section may not exceed the lesser of:</text> <level label="1"> <text>the total funds in the Licensed Practical Nurse and Registered Nurse Preceptorship Tax Credit Fund for that year; or</text> </level> <level label="2"> <text>$100,000.</text> </level> </level> <level label="ii"> <text>If the aggregate amount of tax credit certificates issued under this section during a taxable year totals less than the amount authorized under this paragraph, any excess amount may be issued under tax credit certificates in the next taxable year.</text> </level> </level> </level> <level label="d"> <level label="1"> <text>In this section, “Fund” means the Licensed Practical Nurse and Registered Nurse Preceptorship Tax Credit Fund established under paragraph (2) of this subsection.</text> </level> <level label="2"> <text>There is a Licensed Practical Nurse and Registered Nurse Preceptorship Tax Credit Fund.</text> </level> <level label="3"> <text>The Department shall administer the Fund.</text> </level> <level label="4"> <text>The purpose of the Fund is to offset the costs of the tax credit available under this section.</text> </level> <level label="5"> <text>The Fund is a special, nonlapsing fund that is not subject to § 7–302 of the State Finance and Procurement Article.</text> </level> <level label="6"> <text>The State Treasurer shall hold the Fund separately, and the Comptroller shall account for the Fund.</text> </level> <level label="7"> <text>The Fund consists of:</text> <level label="i"> <text>federal funding provided under:</text> <level label="1"> <text>the federal Coronavirus Aid, Relief, and Economic Security Act;</text> </level> <level label="2"> <text>the federal Consolidated Appropriations Act, 2021; or</text> </level> <level label="3"> <text>any other federal COVID–19 pandemic relief funding;</text> </level> </level> <level label="ii"> <text>money appropriated in the State budget to the Fund; and</text> </level> <level label="iii"> <text>any other money from any other source accepted for the benefit of the Fund.</text> </level> </level> <level label="8"> <text>The money in the Fund shall be invested and reinvested by the State Treasurer, and interest and earnings shall be credited to the General Fund of the State.</text> </level> <level label="9"> <level label="i"> <text>Except as otherwise provided in this paragraph, money credited or appropriated to the Fund shall remain in the Fund.</text> </level> <level label="ii"> <level label="1"> <text>Within 15 days after the end of each calendar quarter, the Department shall notify the Comptroller as to each credit certificate issued during the quarter.</text> </level> <level label="2"> <text>On notification that a credit certificate has been issued by the Department, the Comptroller shall transfer an amount equal to the credit amount stated in the tax credit certificate from the Fund to the General Fund of the State.</text> </level> </level> </level> </level> <level label="e"> <text>On or before January 31 each taxable year, the Department shall:</text> <level label="1"> <text>report to the Comptroller on the tax credit certificates issued under this section during the prior taxable year; and</text> </level> <level label="2"> <text>report to the General Assembly, in accordance with § 2–1257 of the State Government Article, on the utilization of the credit established under this section.</text> </level> </level> <level label="f"> <text>The Department, in consultation with the Governor’s Workforce Development Board, shall adopt regulations to carry out the provisions of this section, including the criteria and procedures for application for, approval of, and monitoring eligibility for the tax credit authorized under this section.</text> </level> </section> <section article="gtg" article_name="Tax - General" number="10-740" title_number="10" title_name="Income Tax" subtitle_number="7" subtitle_name="Income Tax Credits"> <level label="a"> <level label="1"> <text>In this section the following words have the meanings indicated.</text> </level> <level label="2"> <text>“Commission” means the Maryland Higher Education Commission.</text> </level> <level label="3"> <text>“Qualified taxpayer” means an individual who has:</text> <level label="i"> <text>incurred at least $20,000 in undergraduate or graduate student loan debt or both; and</text> </level> <level label="ii"> <text>has at least $5,000 in outstanding undergraduate or graduate student loan debt or both when submitting an application under subsection (c) of this section.</text> </level> </level> </level> <level label="b"> <text>Subject to the limitations of this section, a qualified taxpayer may claim a credit against the State income tax for the taxable year in which the Commission certifies a tax credit under this section.</text> </level> <level label="c"> <level label="1"> <level label="i"> <text>By September 15 of each year, an individual shall submit an application to the Commission for the credit allowed under this section.</text> </level> <level label="ii"> <text>The individual shall submit with the application an assurance that the individual will use any credit approved under this section for the repayment of the individual’s undergraduate or graduate student loan debt or both as soon as practicable.</text> </level> <level label="iii"> <level label="1"> <text>Except as provided in subparagraph (iv) of this paragraph, the amount of the credit claimed under this section that was not used to repay the individual’s undergraduate or graduate student loan debt shall be recaptured if the individual does not use the entire credit approved under this section for the repayment of the individual’s undergraduate or graduate student loan debt or both within 3 years from the close of the taxable year for which the credit is claimed.</text> </level> <level label="2"> <text>The individual who claimed the credit shall pay the unused amount of the credit claimed as taxes payable to the State for the taxable year in which the event requiring recapture of the credit occurs.</text> </level> </level> <level label="iv"> <text>The Commission may grant an extension of the period within which the individual is required to use the credit claimed for the repayment of the individual’s undergraduate or graduate student loan debt if the individual was unable to repay the student loan debt due to:</text> <level label="1"> <text>a period of forbearance related to litigation concerning the federal Saving on a Valuable Education (SAVE) student loan repayment plan;</text> </level> <level label="2"> <text>the inability of the individual to change from one income–based repayment plan to another plan due to understaffing at the U.S. Department of Education; or</text> </level> <level label="3"> <text>a period of forbearance during which the individual was awaiting an agreement under the federal Public Service Loan Forgiveness Buyback program and unable to make any student loan debt payments.</text> </level> </level> </level> <level label="2"> <text>By December 15 of each year the Commission shall certify to the individual the amount of any tax credit approved by the Commission under this section, not to exceed $5,000.</text> </level> <level label="3"> <level label="i"> <text>For tax year 2025, the total amount of tax credits approved by the Commission under this section may not exceed $16,000,000.</text> </level> <level label="ii"> <text>For tax year 2026, the total amount of tax credits approved by Commission under this section may not exceed $9,000,000.</text> </level> <level label="iii"> <text>For any taxable year after 2026, the total amount of tax credits approved by the Commission under this section may not exceed $18,000,000.</text> </level> </level> <level label="4"> <level label="i"> <text>Except as provided in subparagraph (ii) of this paragraph, the Commission shall reserve $9,000,000 of the tax credits authorized under paragraph (3) of this subsection for the following individuals in the following order of priority:</text> <level label="1"> <text>State employees who graduated from institutions of higher education in the State where at least 40% of the attendees are eligible to receive federal Pell Grants; and</text> </level> <level label="2"> <text>all other State employees not described under item 1 of this subparagraph.</text> </level> </level> <level label="ii"> <text>If the total amount of tax credits applied for by individuals described under subparagraph (i) of this paragraph is less than $9,000,000 for a taxable year, the Commission may make available the unused amount of credits for use by other qualified taxpayers.</text> </level> </level> <level label="5"> <text>To claim the tax credit allowed under this section, an individual shall attach a copy of the Commission’s certification of the approved credit amount to the income tax return.</text> </level> </level> <level label="d"> <text>Subject to subsection (c)(4) of this section, the Commission shall prioritize tax credit recipients and amounts based on the following criteria:</text> <level label="1"> <text>whether the qualified taxpayers are graduates from institutions of higher education in the State where at least 40% of the attendees are eligible to receive federal Pell Grants; and</text> </level> <level label="2"> <text>in an order of priority determined by the Commission, whether the qualified taxpayers:</text> <level label="i"> <text>have higher debt burden to income ratios;</text> </level> <level label="ii"> <text>graduated from an institution of higher education located in the State;</text> </level> <level label="iii"> <text>did not receive a tax credit in a prior year; or</text> </level> <level label="iv"> <text>were eligible for in–State tuition.</text> </level> </level> </level> <level label="e"> <text>If the tax credit allowed under this section in any taxable year exceeds the total tax otherwise payable by the qualified taxpayer for that taxable year, the qualified taxpayer may claim a refund in the amount of the excess.</text> </level> <level label="f"> <text>The Commission shall establish and implement by September 1, 2024, an outreach and marketing plan to:</text> <level label="1"> <text>make eligible taxpayers aware of the availability of the tax credit provided under this section; and</text> </level> <level label="2"> <text>encourage institutions of higher education in the State to advise new graduates, particularly those with an interest in public service, of the availability of the tax credit provided under this section.</text> </level> </level> <level label="g"> <level label="1"> <text>On or before December 1 each year, the Commission shall report to the Governor and, in accordance with § 2–1257 of the State Government Article, the General Assembly on:</text> <level label="i"> <text>the number of applicants for the tax credit authorized under this section;</text> </level> <level label="ii"> <text>the number and amounts of tax credits awarded under this section to qualified taxpayers;</text> </level> <level label="iii"> <text>a breakdown of the age, gender, race, income, and counties of residency of qualified taxpayers who receive the credit; and</text> </level> <level label="iv"> <text>any additional information that the Commission deems relevant.</text> </level> </level> <level label="2"> <text>On or before January 1, 2026, the Commission shall report to the Governor and, in accordance with § 2–1257 of the State Government Article, the General Assembly recommendations for changes to statute or regulations that would better target the allocation of tax credits under this program.</text> </level> </level> <level label="h"> <text>The Commission shall adopt regulations to carry out the provisions of this section.</text> </level> <level label="i"> <text>The tax credit under this section shall be referred to as the Student Loan Debt Relief Tax Credit.</text> </level> </section> <section article="gtg" article_name="Tax - General" number="10-741" title_number="10" title_name="Income Tax" subtitle_number="7" subtitle_name="Income Tax Credits"> <level label="a"> <level label="1"> <text>In this section the following words have the meanings indicated.</text> </level> <level label="2"> <text>“Business entity” has the meaning stated in § 6–801 of the Economic Development Article.</text> </level> <level label="3"> <text>“Department” means the Department of Commerce.</text> </level> <level label="4"> <text>“Eligible project” has the meaning stated in § 6–801 of the Economic Development Article.</text> </level> <level label="5"> <text>“Existing business entity” has the meaning stated in § 6–801 of the Economic Development Article.</text> </level> <level label="6"> <text>“New business entity” has the meaning stated in § 6–801 of the Economic Development Article.</text> </level> <level label="7"> <text>“Qualified business entity” has the meaning stated in § 6–801 of the Economic Development Article.</text> </level> <level label="8"> <text>“Qualified position” has the meaning stated in § 6–801 of the Economic Development Article.</text> </level> <level label="9"> <text>“Tier I area” has the meaning stated in § 6–801 of the Economic Development Article.</text> </level> <level label="10"> <text>“Tier II area” has the meaning stated in § 6–801 of the Economic Development Article.</text> </level> </level> <level label="b"> <level label="1"> <text>Subject to the limitations of this section, an individual or corporation that is a new business entity that operates an eligible project in a Tier I area or an existing business entity that operates an eligible project may claim a credit against the State income tax equal to the amount stated in the final tax credit certificate approved by the Department for an eligible project.</text> </level> <level label="2"> <text>The amount of the credit authorized under paragraph (1) of this subsection is equal to the product of:</text> <level label="i"> <level label="1"> <text>if the qualified business entity received a certificate under § 6–805 of the Economic Development Article before June 1, 2022, 5.75%; or</text> </level> <level label="2"> <text>if the qualified business entity received a certificate under § 6–805 of the Economic Development Article on or after June 1, 2022, 4.75%; and</text> </level> </level> <level label="ii"> <text>the total amount of wages paid for each qualified position at an eligible project.</text> </level> </level> <level label="3"> <text>If the tax credit allowed under this section in any taxable year exceeds the total tax otherwise payable by the qualified business entity for that taxable year, the qualified business entity may claim a refund in the amount of the excess.</text> </level> </level> <level label="c"> <level label="1"> <text>On enrollment in the More Jobs for Marylanders Program established under Title 6, Subtitle 8 of the Economic Development Article, a qualified business entity shall apply to the Department for a tax credit certificate.</text> </level> <level label="2"> <text>The application shall be in the form and shall contain the information the Department requires.</text> </level> <level label="3"> <level label="i"> <text>Subject to subsections (d) and (e) of this section, the Department may issue a tax credit certificate to a qualified business entity in an amount not to exceed the amount determined under subsection (b)(2) of this section.</text> </level> <level label="ii"> <text>In determining the allocation of the aggregate tax credit amounts available in a fiscal year as provided under subsection (d) of this section, the Department shall give priority to applications for eligible projects in a Tier I area, as defined under § 6–801 of the Economic Development Article.</text> </level> </level> </level> <level label="d"> <level label="1"> <text>In this subsection, “Reserve Fund” means the More Jobs for Marylanders Tax Credit Reserve Fund established under paragraph (2) of this subsection.</text> </level> <level label="2"> <level label="i"> <text>There is a More Jobs for Marylanders Tax Credit Reserve Fund that is a special continuing, nonlapsing fund that is not subject to § 7–302 of the State Finance and Procurement Article.</text> </level> <level label="ii"> <text>The money in the Reserve Fund shall be invested and reinvested by the Treasurer, and interest and earnings shall be credited to the General Fund.</text> </level> </level> <level label="3"> <level label="i"> <text>Subject to the limitations of this subsection, the Department shall issue an initial tax credit certificate in an amount equal to a percentage of total wages paid for each qualified position at an eligible project as calculated under subsection (b)(2) of this section.</text> </level> <level label="ii"> <text>An initial tax credit certificate issued under this subsection shall state the maximum amount of tax credit for which the qualified business entity is eligible.</text> </level> <level label="iii"> <level label="1"> <text>Except as otherwise provided in this subparagraph, for any fiscal year, the Department may not issue initial tax credit certificates for credit amounts in the aggregate totaling more than:</text> </level> <level label="A"> <text>with respect to qualified business entities provided a certificate under § 6–805 of the Economic Development Article before June 1, 2022, $9,000,000 in a fiscal year; and</text> </level> <level label="B"> <text>with respect to qualified business entities provided a certificate under § 6–805 of the Economic Development Article on or after June 1, 2022, $5,000,000 in a fiscal year.</text> </level> <level label="2"> <text>If the aggregate credit amounts under initial tax credit certificates issued in a fiscal year total less than the maximum provided under subsubparagraph 1 of this subparagraph, any excess amount shall remain in the Reserve Fund.</text> </level> <level label="3"> <text>For any fiscal year, if funds are transferred from the Reserve Fund under the authority of any provision of law other than under paragraph (4) of this subsection, the maximum credit amounts in the aggregate for which the Department may issue initial tax credit certificates shall be reduced by the amount transferred.</text> </level> </level> <level label="iv"> <text>For fiscal year 2019 and each fiscal year thereafter, the Governor shall include in the annual budget bill an appropriation to the Reserve Fund in an amount that is no less than the amount the Department reports is necessary under subsection (e) of this section to:</text> <level label="1"> <text>maintain the current level of manufacturing activity in the State;</text> </level> <level label="2"> <text>attract new manufacturing activity to the State; and</text> </level> <level label="3"> <text>attract new businesses to and encourage the expansion of existing businesses within opportunity zones in the State.</text> </level> </level> <level label="v"> <text>Notwithstanding the provisions of § 7–213 of the State Finance and Procurement Article, the Governor may not reduce an appropriation to the Reserve Fund in the State budget as approved by the General Assembly.</text> </level> <level label="vi"> <level label="1"> <text>Subject to subsubparagraphs 2 and 3 of this subparagraph, based on an amount equal to a percentage of the total actual wages paid for each qualified position at an eligible project as calculated under subsection (b)(2) of this section, the Department shall issue a final tax credit certificate to the qualified business entity.</text> </level> <level label="2"> <text>For fiscal year 2027, the total amount of final tax credit certificates issued by the Department may not exceed $15,000,000.</text> </level> <level label="3"> <text>If the total amount of final tax credit certificates the Department is required to issue under this subparagraph exceeds $15,000,000 in fiscal year 2027, the Department shall issue final tax credit certificates to qualified business entities on a pro rata basis.</text> </level> </level> </level> <level label="4"> <level label="i"> <text>Except as provided in this paragraph, money appropriated to the Reserve Fund shall remain in the Fund.</text> </level> <level label="ii"> <level label="1"> <text>Within 15 days after the end of each calendar quarter, the Department shall notify the Comptroller as to each final credit certificate issued during the quarter:</text> </level> <level label="A"> <text>the maximum credit amount stated in the initial tax credit certificate for the qualified business entity; and</text> </level> <level label="B"> <text>the final certified credit amount for the qualified business entity.</text> </level> <level label="2"> <text>On notification that a final credit amount has been certified, the Comptroller shall transfer from the Reserve Fund to the General Fund:</text> </level> <level label="A"> <text>for fiscal year 2027, an amount equal to the credit amount stated in the final tax credit certificate for the qualified business entity; and</text> </level> <level label="B"> <text>for fiscal year 2028 and each fiscal year thereafter, an amount equal to the credit amount stated in the initial tax credit certificate for the qualified business entity.</text> </level> </level> </level> </level> <level label="e"> <text>On or before July 1 each year, the Department shall report to the Governor and, subject to § 2–1257 of the State Government Article, the General Assembly on the amount of tax credits necessary to:</text> <level label="1"> <text>maintain the current level of manufacturing activity in the State;</text> </level> <level label="2"> <text>attract new manufacturing activity to the State; and</text> </level> <level label="3"> <text>attract new businesses to and encourage the expansion of existing businesses within opportunity zones in the State.</text> </level> </level> <level label="f"> <text>The Department and the Comptroller jointly shall adopt regulations to carry out the provisions of this section and to specify criteria and procedures for the application for, approval of, and monitoring of continuing eligibility for the tax credit under this section.</text> </level> </section> <section article="gtg" article_name="Tax - General" number="10-744" title_number="10" title_name="Income Tax" subtitle_number="7" subtitle_name="Income Tax Credits"> <level label="a"> <level label="1"> <text>In this section the following words have the meanings indicated.</text> </level> <level label="2"> <text>“Accessibility and universal visitability features” means components of renovation to an existing home that improves access to or within the home for individuals with disabilities.</text> </level> <level label="3"> <text>“Department” means the Department of Housing and Community Development.</text> </level> <level label="4"> <text>“Disability” has the meaning stated in § 7–101 of the Human Services Article.</text> </level> <level label="5"> <text>“Qualified expenses” means costs incurred to install accessibility and universal visitability features to or within a home.</text> </level> </level> <level label="b"> <text>Subject to the limitations of this section, an individual may claim a credit against the State income tax in an amount equal to 50% of the qualified expenses incurred during the taxable year to renovate an existing home with accessibility and universal visitability features.</text> </level> <level label="c"> <level label="1"> <text>For any taxable year, the credit allowed under this section may not exceed the lesser of:</text> <level label="i"> <text>$5,000; or</text> </level> <level label="ii"> <text>the State income tax imposed for the taxable year calculated before the application of the credits allowed under this section and under §§ 10–701 and 10–701.1 of this subtitle but after the application of any other credit allowed under this subtitle.</text> </level> </level> <level label="2"> <text>The unused amount of the credit may not be carried over to any other taxable year.</text> </level> </level> <level label="d"> <level label="1"> <text>By June 1 of the calendar year following the end of the taxable year in which the qualified expenses were incurred, an individual shall submit an application to the Department for the credits allowed under subsection (b) of this section.</text> </level> <level label="2"> <text>The total amount of credits approved by the Department under subsection (b) of this section may not exceed $1,000,000 for any calendar year.</text> </level> <level label="3"> <text>If the total amount of credits applied for by all individuals under subsection (b) of this section exceeds the maximum specified under paragraph (2) of this subsection, the Department shall approve a credit for each applicant in an amount equal to the product of multiplying the credit applied for by the applicant times a fraction:</text> <level label="i"> <text>the numerator of which is the maximum specified under paragraph (2) of this subsection; and</text> </level> <level label="ii"> <text>the denominator of which is the total of all credits applied for by all applicants under subsection (b) of this section in the calendar year.</text> </level> </level> <level label="4"> <text>By August 1 of the calendar year following the end of the taxable year in which the qualified expenses were incurred, the Department shall certify to the individual the amount of tax credits approved by the Department for the individual under subsection (b) of this section.</text> </level> <level label="5"> <text>To claim the approved credits allowed under this section, an individual shall:</text> <level label="i"> <text>file an amended income tax return for the taxable year in which the qualified expenses were incurred; and</text> </level> <level label="ii"> <text>attach a copy of the Department’s certification of the approved credit amount to the amended income tax return.</text> </level> </level> </level> <level label="e"> <text>The Department shall adopt regulations to carry out the provisions of this section, including the criteria and procedures for application for, approval of, and monitoring eligibility for the tax credit authorized under this section.</text> </level> </section> <section article="gtg" article_name="Tax - General" number="10-745" title_number="10" title_name="Income Tax" subtitle_number="7" subtitle_name="Income Tax Credits"> <level label="a"> <level label="1"> <text>In this section the following words have the meanings indicated.</text> </level> <level label="2"> <text>“Certified organic produce” means an eligible food donation that is certified under Title 10, Subtitle 14 of the Agriculture Article as an organically produced commodity.</text> </level> <level label="3"> <text>“Eligible food donation” means fresh farm products for human consumption.</text> </level> <level label="4"> <text>“Qualified farm” means a farm business that is located in the State.</text> </level> <level label="5"> <text>“Secretary” means the Secretary of Agriculture or the Secretary’s designee.</text> </level> <level label="6"> <text>“Tax credit certificate administrator” means a person or an organization that is authorized by the State Department of Agriculture under subsection (e) of this section to receive eligible food donations.</text> </level> </level> <level label="b"> <level label="1"> <text>Subject to the limitations of this section, for a taxable year beginning after December 31, 2016, a qualified farm may claim a credit against the State income tax in the amount stated on any tax credit certificates issued to the qualified farm during the taxable year.</text> </level> <level label="2"> <level label="i"> <text>Except as provided in subparagraph (ii) of this paragraph, for any taxable year, the aggregate amount of credits authorized under this subsection for a qualified farm may not exceed $5,000.</text> </level> <level label="ii"> <text>For any taxable year, the Secretary may increase the credit limitation under subparagraph (i) of this paragraph for a qualified farm by an amount not to exceed $5,000.</text> </level> </level> <level label="3"> <text>If the credit allowed under this section exceeds the State income tax, any unused credit may be carried forward and applied for succeeding taxable years until the earlier of:</text> <level label="i"> <text>the date on which the full amount of the credit is used; or</text> </level> <level label="ii"> <text>the date of the expiration of the 5th year after the taxable year for which the credit was allowed.</text> </level> </level> </level> <level label="c"> <level label="1"> <text>A qualified farm that makes an eligible food donation is eligible for a tax credit certificate with a stated tax credit amount equal to 100% of the value of the eligible food donation.</text> </level> <level label="2"> <text>A qualified farm that makes a donation of certified organic produce is eligible for a tax credit certificate with a stated tax credit amount equal to 100% of the value of the donated certified organic produce.</text> </level> </level> <level label="d"> <level label="1"> <text>Each week the Secretary shall establish and publish the categories and value of certified organic produce and eligible food donations.</text> </level> <level label="2"> <text>Except as provided in paragraph (3) of this subsection, the value of each category of certified organic produce and eligible food donations is the wholesale value of the category established by the State Department of Agriculture and based on United States Department of Agriculture reports on Maryland products sold at Maryland markets.</text> </level> <level label="3"> <text>If the Secretary determines that the value established under paragraph (2) of this subsection is insufficient to pay for the cost of harvesting a category of certified organic produce or eligible food donation, the Secretary may establish a value in excess of the value under paragraph (2) of this subsection.</text> </level> </level> <level label="e"> <level label="1"> <text>The Secretary, in consultation with the Comptroller, shall establish a process to certify a person or an organization to act as a tax credit certificate administrator.</text> </level> <level label="2"> <text>A tax credit certificate administrator that receives a donation of certified organic produce or an eligible food donation from a qualified farm shall issue the qualified farm a tax credit certificate.</text> </level> <level label="3"> <text>The tax credit certificate shall:</text> <level label="i"> <text>state the date of the donation;</text> </level> <level label="ii"> <text>identify the qualified farm;</text> </level> <level label="iii"> <text>describe the type of donation;</text> </level> <level label="iv"> <text>state the weight of the donation;</text> </level> <level label="v"> <text>identify the value of the donation;</text> </level> <level label="vi"> <text>state the maximum amount of the tax credit for which the qualified farm is eligible; and</text> </level> <level label="vii"> <text>provide any other information the State Department of Agriculture or Comptroller requires.</text> </level> </level> <level label="4"> <text>The Secretary, in consultation with the Comptroller, shall prepare tax credit certificate forms for the use of the tax credit certificate administrators.</text> </level> <level label="5"> <text>Within 30 days after issuing a tax credit certificate, the tax credit certificate administrator shall provide a copy of the tax credit certificate to the Secretary and the Comptroller.</text> </level> <level label="6"> <level label="i"> <text>The Secretary shall notify each tax credit certificate administrator to stop issuing tax credit certificates if the amount of tax credit certificates issued during the fiscal year equals or exceeds the amount of tax credit certificates authorized to be issued during the fiscal year under subsection (f) of this section less $50,000.</text> </level> <level label="ii"> <text>The Secretary, in consultation with the Comptroller, shall adopt regulations providing procedures to issue the remaining $50,000 of tax credit certificates under this paragraph.</text> </level> </level> </level> <level label="f"> <level label="1"> <text>For each fiscal year, the total amount of tax credit certificates issued under this section may not exceed $100,000.</text> </level> <level label="2"> <text>If the total amount of tax credit certificates issued during any fiscal year totals less than the maximum amount provided under paragraph (1) of this subsection, any excess amount may be carried forward and issued under tax credit certificates in a subsequent fiscal year.</text> </level> </level> <level label="g"> <text>On or before January 1, 2018, and January 1 each year thereafter, the Secretary, in consultation with the Comptroller, shall submit a report to the Governor and, subject to § 2–1257 of the State Government Article, the General Assembly on the use and impact of the tax credit established under this section.</text> </level> <level label="h"> <text>The Secretary, in consultation with the Comptroller, shall adopt regulations to administer this section.</text> </level> </section> <section article="gtg" article_name="Tax - General" number="10-746" effective_note="EFFECTIVE UNTIL JUNE 30, 2029 PER CHAPTER 769 AND 770 OF 2024" title_number="10" title_name="Income Tax" subtitle_number="7" subtitle_name="Income Tax Credits"> <level label="a"> <text>In this section, “qualified expenses” means expenses incurred to butcher and process an antlerless deer for human consumption.</text> </level> <level label="b"> <text>Subject to the limitations of this section, an individual who hunts and harvests an antlerless deer may claim a credit against the State income tax for up to $75 of the qualified expenses incurred by the individual if:</text> <level label="1"> <text>the hunting and harvesting of the deer complies with State hunting laws and regulations; and</text> </level> <level label="2"> <text>the individual donates the processed deer meat to a venison donation program administered by an organization that is exempt from taxation under § 501(c)(3) of the Internal Revenue Code.</text> </level> </level> <level label="c"> <level label="1"> <text>For any taxable year, the total amount of credits that an individual may claim under this section may not exceed $600, unless the individual harvested each deer for which the credits are claimed in accordance with a deer management permit.</text> </level> <level label="2"> <text>The unused amount of the credit for any taxable year may not be carried over to any other taxable year.</text> </level> </level> <level label="d"> <text>An individual who claims the credit under this section shall have the immunity from liability described under § 5–634 of the Courts Article for donated food.</text> </level> <level label="e"> <text>On or before January 31 each year, each venison donation program that accepts a donation under this section shall report to the Comptroller the following information for the immediately preceding taxable year:</text> <level label="1"> <text>the name and home address of each donor who intended to claim the income tax credit under this section; and</text> </level> <level label="2"> <text>the number of deer donated by each donor who intended to claim the income tax credit under this section.</text> </level> </level> </section> <section article="gtg" article_name="Tax - General" number="10-749" title_number="10" title_name="Income Tax" subtitle_number="7" subtitle_name="Income Tax Credits"> <level label="a"> <level label="1"> <text>In this section the following words have the meanings indicated.</text> </level> <level label="2"> <text>“Qualified workforce housing project” has the meaning stated in § 4–2501 of the Housing and Community Development Article.</text> </level> <level label="3"> <text>“Secretary” means the Secretary of Housing and Community Development.</text> </level> </level> <level label="b"> <text>An individual or a corporation may claim a credit against the State income tax in the amount determined under subsection (c) of this section for a qualified workforce housing project.</text> </level> <level label="c"> <level label="1"> <text>The credit under this section equals the amount determined under paragraph (2) of this subsection for each qualified workforce housing project.</text> </level> <level label="2"> <level label="i"> <text>Except as provided in subparagraph (ii) of this paragraph, the amount allowed under paragraph (1) of this subsection for each qualified workforce housing project equals the amount stated in the final credit certificate issued by the Secretary under Title 4, Subtitle 25 of the Housing and Community Development Article.</text> </level> <level label="ii"> <text>The credit amount allowed for a project under subparagraph (i) of this paragraph may be claimed in full for the first taxable year the project is placed in service.</text> </level> </level> </level> <level label="d"> <text>If the credit allowed under this section in any taxable year exceeds the State income tax for that taxable year, an individual or a corporation may apply the excess as a credit against the State income tax for succeeding taxable years until the earlier of:</text> <level label="1"> <text>the full amount of the excess is used; or</text> </level> <level label="2"> <text>the expiration of the ninth taxable year after the taxable year in which the final credit certificate was issued.</text> </level> </level> <level label="e"> <text>An individual or a corporation claiming the State tax credit for a qualified workforce housing project shall submit with the individual’s or corporation’s income tax return a copy of the final credit certificate for the project issued by the Secretary under Title 4, Subtitle 25 of the Housing and Community Development Article.</text> </level> <level label="f"> <text>The Secretary, in consultation with the Comptroller, may adopt regulations providing for the recapture of the State tax credits allowed under this section for a qualified workforce housing project that fails to continue to meet the requirements of Title 4, Subtitle 25 of the Housing and Community Development Article.</text> </level> <level label="g"> <text>An individual or a corporation may not claim the credit allowed under this section for a project for any taxable year in which the owner of the project is in default under any regulatory agreement required with respect to the project under § 4–2502 of the Housing and Community Development Article.</text> </level> </section> <section article="gtg" article_name="Tax - General" number="10-750" effective_note="EFFECTIVE UNTIL DECEMBER 31, 2028 PER CHAPTER 77 OF 2022" title_number="10" title_name="Income Tax" subtitle_number="7" subtitle_name="Income Tax Credits"> <level label="a"> <level label="1"> <text>In this section the following words have the meanings indicated.</text> </level> <level label="2"> <text>“Donation” means an irrevocable gift of cash.</text> </level> <level label="3"> <text>“Institution of higher education” means Bowie State University, Coppin State University, Morgan State University, or University of Maryland Eastern Shore.</text> </level> <level label="4"> <text>“Qualified permanent endowment fund” means a fund that is:</text> <level label="i"> <text>held in perpetuity by an institution of higher education; and</text> </level> <level label="ii"> <text>used to benefit the institution of higher education or its students.</text> </level> </level> </level> <level label="b"> <level label="1"> <text>Subject to the limitations of this section, for the taxable year in which a taxpayer makes a donation to a qualified permanent endowment fund at an institution of higher education, the taxpayer may claim a credit against the State income tax in the amount stated on the tax credit certificate issued under subsection (c) of this section.</text> </level> <level label="2"> <text>If the credit allowed under this section in any taxable year exceeds the State income tax for that taxable year, any unused credit may be carried forward and applied to succeeding taxable years until the full amount of the credit is used.</text> </level> </level> <level label="c"> <level label="1"> <text>On application by a taxpayer, the Comptroller shall issue a credit certificate in the amount of 25% of a proposed donation to a qualified permanent endowment fund at an institution of higher education.</text> </level> <level label="2"> <text>The application shall contain:</text> <level label="i"> <text>the names of the taxpayer, the institution of higher education, and the qualified permanent endowment fund to which the donation will be made;</text> </level> <level label="ii"> <text>the taxable year in which the donation will be made;</text> </level> <level label="iii"> <text>the amount of the donation; and</text> </level> <level label="iv"> <text>any other information that the Comptroller requires.</text> </level> </level> <level label="3"> <text>The Comptroller shall approve all applications that qualify for a tax credit certificate under this subsection:</text> <level label="i"> <text>on a first–come, first–served basis; and</text> </level> <level label="ii"> <text>in a timely manner.</text> </level> </level> <level label="4"> <level label="i"> <text>For each taxable year, the total amount of tax credit certificates certified by the Comptroller under this section may not exceed $240,000.</text> </level> <level label="ii"> <level label="1"> <text>The Comptroller shall make available 25% of the amount of credits authorized under subparagraph (i) of this paragraph for donations to qualified permanent endowment funds at each institution of higher education.</text> </level> <level label="2"> <text>If the total amount of tax credit certificates certified under this section for an institution of higher education during a taxable year is less than the amount made available for the institution of higher education under this subparagraph, any excess amount may be certified under tax credit certificates for the institution of higher education for the next taxable year.</text> </level> </level> </level> </level> <level label="d"> <text>The Comptroller shall adopt regulations to carry out the provisions of this section, including the criteria and procedures for application for, approval of, and monitoring eligibility for the tax credit authorized under this section.</text> </level> </section> <section article="gtg" article_name="Tax - General" number="10-751" title_number="10" title_name="Income Tax" subtitle_number="7" subtitle_name="Income Tax Credits"> <level label="a"> <level label="1"> <text>In this section the following words have the meanings indicated.</text> </level> <level label="2"> <text>“Qualified child” means a dependent of a taxpayer, if the dependent:</text> <level label="i"> <text>is a dependent for purposes of § 152 of the Internal Revenue Code in effect on December 31, 2024; and</text> </level> <level label="ii"> <level label="1"> <text>is under the age of 6 years; or</text> </level> <level label="2"> <level label="A"> <text>is under the age of 17 years; and</text> </level> </level> <level label="B"> <text>is a child with a disability, as defined under § 8–401 of the Education Article.</text> </level> </level> </level> <level label="3"> <text>“Taxpayer” means:</text> <level label="i"> <text>an individual filing an income tax return; or</text> </level> <level label="ii"> <text>a married couple filing a joint income tax return.</text> </level> </level> </level> <level label="b"> <text>A taxpayer who is a resident and has federal adjusted gross income lower than the threshold amount of $15,000 may claim a credit against the State income tax for each qualified child in an amount equal to $500.</text> </level> <level label="c"> <text>The amount of the credit shall be reduced by $50 for each $1,000, or fraction thereof, by which the taxpayer’s federal adjusted gross income exceeds the threshold amount, except that the reduction cannot reduce the credit below zero.</text> </level> <level label="d"> <text>If the credit allowed under this section in any taxable year exceeds the State income tax for that taxable year, the taxpayer may claim a refund in the amount of the excess.</text> </level> </section> <section article="gtg" article_name="Tax - General" number="10-752" title_number="10" title_name="Income Tax" subtitle_number="7" subtitle_name="Income Tax Credits"> <level label="a"> <level label="1"> <text>In this section the following words have the meanings indicated.</text> </level> <level label="2"> <text>“Department” means the Maryland Department of Health.</text> </level> <level label="3"> <text>“Health care practitioner” means an individual who:</text> <level label="i"> <text>is licensed to practice medicine under Title 14 of the Health Occupations Article;</text> </level> <level label="ii"> <text>is a physician assistant, as defined in § 15–101 of the Health Occupations Article; or</text> </level> <level label="iii"> <text>is a registered nurse practitioner, as defined in § 8–101 of the Health Occupations Article.</text> </level> </level> <level label="4"> <text>“Preceptorship program” means an organized system of clinical experience that, for the purpose of attaining specified learning objectives, pairs an enrolled student of a physician assistant program in the State with a health care practitioner who meets the qualifications of a preceptor.</text> </level> </level> <level label="b"> <level label="1"> <text>Subject to the limitations of this section, a health care practitioner may claim a credit against the State income tax in the amount stated on the tax credit certificate issued under subsection (c) of this section for the taxable year in which the health care practitioner served without compensation as a physician assistant preceptor in a preceptorship program approved by the Department and worked:</text> <level label="i"> <text>a minimum of three rotations, each consisting of at least 100 hours of community–based clinical training in family medicine, general internal medicine, or general pediatrics; and</text> </level> <level label="ii"> <text>in an area of the State identified as having a health care workforce shortage by the Department, in consultation with the Governor’s Workforce Development Board.</text> </level> </level> <level label="2"> <level label="i"> <text>The total amount of the credit allowed under this section for any taxable year may not exceed the State income tax imposed for that taxable year.</text> </level> <level label="ii"> <text>Any unused amount of the credit for any taxable year may not be carried over to any other taxable year.</text> </level> </level> </level> <level label="c"> <level label="1"> <text>On application by a health care practitioner, the Department shall issue a tax credit certificate in the amount of $1,000 for each physician assistant student rotation of the minimum number of hours required under subsection (b)(1)(i) of this section for which the health care practitioner served as a physician assistant preceptor without compensation.</text> </level> <level label="2"> <text>The application shall contain:</text> <level label="i"> <text>the name of the health care practitioner;</text> </level> <level label="ii"> <text>information identifying the physician assistant preceptorship in which the health care practitioner participated;</text> </level> <level label="iii"> <text>the number and names of the students for whom the individual served as a preceptor without compensation; and</text> </level> <level label="iv"> <text>any other information that the Department requires.</text> </level> </level> <level label="3"> <text>For any taxable year, the amount of tax credit stated in the tax credit certificate may not exceed $10,000.</text> </level> <level label="4"> <text>The Department shall:</text> <level label="i"> <text>approve all applications that qualify for a tax credit certificate under this subsection on a first–come, first–served basis; and</text> </level> <level label="ii"> <text>notify an individual within 45 days after receipt of the individual’s application of its approval or denial.</text> </level> </level> <level label="5"> <level label="i"> <text>For each taxable year, the total amount of tax credit certificates that may be issued by the Department under this section may not exceed the lesser of:</text> <level label="1"> <text>the total funds in the Physician Assistant Preceptorship Tax Credit Fund for that year; or</text> </level> <level label="2"> <text>$100,000.</text> </level> </level> <level label="ii"> <text>If the aggregate amount of tax credit certificates issued under this section during a taxable year totals less than the amount authorized under this paragraph, any excess amount may be issued under tax credit certificates in the next taxable year.</text> </level> </level> </level> <level label="d"> <level label="1"> <text>In this subsection, “Fund” means the Physician Assistant Preceptorship Tax Credit Fund established under paragraph (2) of this subsection.</text> </level> <level label="2"> <text>There is a Physician Assistant Preceptorship Tax Credit Fund.</text> </level> <level label="3"> <text>The Department shall administer the Fund.</text> </level> <level label="4"> <text>The purpose of the Fund is to offset the costs of the tax credit available under this section.</text> </level> <level label="5"> <text>The Fund is a special, nonlapsing fund that is not subject to § 7–302 of the State Finance and Procurement Article.</text> </level> <level label="6"> <text>The State Treasurer shall hold the Fund separately, and the Comptroller shall account for the Fund.</text> </level> <level label="7"> <text>The Fund consists of:</text> <level label="i"> <text>revenue distributed to the Fund under § 15–206 of the Health Occupations Article;</text> </level> <level label="ii"> <text>money appropriated in the State budget to the Fund; and</text> </level> <level label="iii"> <text>any other money from any other source accepted for the benefit of the Fund.</text> </level> </level> <level label="8"> <text>The money in the Fund shall be invested and reinvested by the State Treasurer, and interest and earnings shall be credited to the General Fund of the State.</text> </level> <level label="9"> <level label="i"> <text>Except as otherwise provided in this paragraph, money credited or appropriated to the Fund shall remain in the Fund.</text> </level> <level label="ii"> <level label="1"> <text>Within 15 days after the end of each calendar quarter, the Department shall notify the Comptroller as to each credit certificate issued during the quarter.</text> </level> <level label="2"> <text>On notification that a credit certificate has been issued by the Department, the Comptroller shall transfer an amount equal to the credit amount stated in the tax credit certificate from the Fund to the General Fund of the State.</text> </level> </level> </level> </level> <level label="e"> <text>On or before March 1 each taxable year, the Department shall:</text> <level label="1"> <text>report to the Comptroller on the tax credit certificates issued under this section during the prior taxable year; and</text> </level> <level label="2"> <text>report to the General Assembly, in accordance with § 2–1257 of the State Government Article, on the utilization of the credit established under this section.</text> </level> </level> <level label="f"> <text>The Department, in consultation with the Governor’s Workforce Development Board, shall adopt regulations to carry out the provisions of this section, including the criteria and procedures for application for, approval of, and monitoring eligibility for the tax credit authorized under this section.</text> </level> </section> <section article="gtg" article_name="Tax - General" number="10-753" title_number="10" title_name="Income Tax" subtitle_number="7" subtitle_name="Income Tax Credits"> <level label="a"> <text>In this section, “nonprofit organization” has the meaning stated in § 1–101 of the Housing and Community Development Article.</text> </level> <level label="b"> <text>An individual, a nonprofit organization, or a business entity may claim a credit against the State income tax in accordance with Title 6, Subtitle 9 of the Housing and Community Development Article for new construction costs and rehabilitation costs for catalytic revitalization projects.</text> </level> </section> <section article="gtg" article_name="Tax - General" number="10-754" title_number="10" title_name="Income Tax" subtitle_number="7" subtitle_name="Income Tax Credits"> <level label="a"> <text>In this section, “eligible taxpayer” means a resident who, on the last day of the taxable year, is at least 65 years old.</text> </level> <level label="b"> <text>Except as provided in subsection (c) of this section and subject to subsection (d) of this section, an eligible taxpayer may claim a credit against the State income tax in an amount equal to:</text> <level label="1"> <text>$1,000 for an eligible taxpayer, other than an individual described under item (2) of this subsection, whose federal adjusted gross income does not exceed $100,000; or</text> </level> <level label="2"> <text>for spouses filing a joint return or for a surviving spouse or head of household as defined in § 2 of the Internal Revenue Code whose federal adjusted gross income does not exceed $150,000:</text> <level label="i"> <text>except as provided in item (ii) of this item, $1,750; or</text> </level> <level label="ii"> <text>if only one of the individuals filing the joint return is an eligible taxpayer, $1,000.</text> </level> </level> </level> <level label="c"> <text>For a taxable year in which the September General Fund estimate for the current fiscal year in the September Board of Revenue Estimates report issued during the taxable year is more than 3.75% below the March General Fund estimate for the current fiscal year in the March Board of Revenue Estimates report issued in the taxable year, the amount of the credit allowed under subsection (b) of this section is limited to:</text> <level label="1"> <text>$500 for an eligible taxpayer, other than an individual described under item (2) of this subsection, whose federal adjusted gross income is at least $50,000 but does not exceed $100,000; or</text> </level> <level label="2"> <text>for spouses filing a joint return or for a surviving spouse or head of household as defined in § 2 of the Internal Revenue Code whose federal adjusted gross income is at least $100,000 but does not exceed $150,000:</text> <level label="i"> <text>except as provided in item (ii) of this item, $875; or</text> </level> <level label="ii"> <text>if only one of the individuals filing the joint return is an eligible taxpayer, $500.</text> </level> </level> </level> <level label="d"> <text>If the credit allowed under this section in any taxable year exceeds the State income tax for that taxable year, the unused amount of the credit may not be carried over to any other taxable year.</text> </level> </section> <section article="gtg" article_name="Tax - General" number="10-755" effective_note="EFFECTIVE UNTIL JUNE 30, 2029 PER CHAPTERS 5 AND 6 OF 2022" title_number="10" title_name="Income Tax" subtitle_number="7" subtitle_name="Income Tax Credits"> <level label="a"> <text>In this section, “federal work opportunity credit” means the work opportunity tax credit allowed under § 38 of the Internal Revenue Code.</text> </level> <level label="b"> <text>An employer may claim a credit against the State income tax for wages paid or incurred by the employer during the taxable year to an individual with barriers to employment who is employed in the State in an amount equal to the lesser of:</text> <level label="1"> <text>50% of the federal work opportunity credit properly claimed for the taxable year by an employer on the employer’s federal income tax return with respect to those wages, excluding any amount carried back or forward from another taxable year in accordance with § 39 of the Internal Revenue Code; or</text> </level> <level label="2"> <text>except in the case of an employer that is an organization exempt from taxation under § 501(c) of the Internal Revenue Code, the State income tax imposed for that taxable year.</text> </level> </level> <level label="c"> <text>An employer that is an organization exempt from taxation under § 501(c) of the Internal Revenue Code may apply the credit under this section as a credit for the payment to the Comptroller of taxes that the organization:</text> <level label="1"> <text>is required to withhold from the wages of employees under § 10–908 of this title; and</text> </level> <level label="2"> <text>is required to pay to the Comptroller under § 10–906(a) of this title.</text> </level> </level> <level label="d"> <text>The unused amount of the credit under this section may not be carried over to any other taxable year.</text> </level> <level label="e"> <text>On or before December 31, 2028, the Department of Legislative Services shall prepare a tax credit evaluation in accordance with Title 1, Subtitle 3 of this article on the tax credit authorized under this section and report to the General Assembly, in accordance with § 2–1257 of the State Government Article, on the tax credit evaluation.</text> </level> </section> <section article="gtg" article_name="Tax - General" number="10-756" effective_note="EFFECTIVE UNTIL JUNE 30, 2032 PER CHAPTERS 18 AND 19 OF 2026" title_number="10" title_name="Income Tax" subtitle_number="7" subtitle_name="Income Tax Credits"> <level label="a"> <level label="1"> <text>In this section the following words have the meanings indicated.</text> </level> <level label="2"> <text>“Department” means the Department of Commerce.</text> </level> <level label="3"> <text>“National touring production” means a for–profit live stage theatrical production that:</text> <level label="i"> <text>is presented in a qualified theatrical production facility for at least two public performances; and</text> </level> <level label="ii"> <text>after the production’s final performance under item (i) of this paragraph, is performed for at least 4 weeks in at least four cities outside the State.</text> </level> </level> <level label="4"> <text>“Pre–Broadway production” means a for–profit live stage theatrical production that:</text> <level label="i"> <text>is presented in a qualified theatrical production facility for at least eight public performances; and</text> </level> <level label="ii"> <text>in the production’s original or adaptive version:</text> <level label="1"> <text>has never been performed or has been performed only on a limited basis in the immediately preceding 5 years; and</text> </level> <level label="2"> <text>is being prepared exclusively at the qualified theatrical production facility for a presentation in the Broadway theater district within 12 months after the production’s final presentation in a qualified theatrical production facility.</text> </level> </level> </level> <level label="5"> <text>“Qualified theatrical production entity” means an entity that:</text> <level label="i"> <text>is carrying out a theatrical production; and</text> </level> <level label="ii"> <text>is determined by the Secretary to be eligible for the tax credit under this section in accordance with subsection (c) of this section.</text> </level> </level> <level label="6"> <text>“Qualified theatrical production facility” means a facility located in the State in which a theatrical production is performed.</text> </level> <level label="7"> <text>“Secretary” means the Secretary of Commerce.</text> </level> <level label="8"> <text>“Theatrical production” means:</text> <level label="i"> <text>a national touring production; or</text> </level> <level label="ii"> <text>a pre–Broadway production.</text> </level> </level> <level label="9"> <level label="i"> <text>“Total direct costs” means the total costs incurred in the State that are necessary to carry out the development, production, performance, or operation of a theatrical production.</text> </level> <level label="ii"> <text>“Total direct costs” includes costs incurred for:</text> <level label="1"> <text>set construction and operation;</text> </level> <level label="2"> <text>special and visual effects;</text> </level> <level label="3"> <text>wardrobe, makeup, and related services;</text> </level> <level label="4"> <text>sound, lighting, staging, and related services and materials;</text> </level> <level label="5"> <text>salary, wages, and other compensation including related benefits, for work performed in the State, paid to persons employed in the theatrical production;</text> </level> <level label="6"> <text>advertising and public relations associated with the performance of the theatrical production in a qualified theatrical production facility;</text> </level> <level label="7"> <text>rental of facilities in the State and equipment used in the State;</text> </level> <level label="8"> <text>leasing of vehicles;</text> </level> <level label="9"> <text>food and lodging; and</text> </level> <level label="10"> <text>travel expenses for bringing persons employed, either directly or indirectly, by the theatrical production to the State, but not including expenses for departing from the State.</text> </level> </level> <level label="iii"> <text>“Total direct costs” does not include any salary, wages, or other compensation for personal services of an individual who receives more than $100,000 per week in salary, wages, or other compensation for personal services in connection with any theatrical production.</text> </level> </level> </level> <level label="b"> <level label="1"> <text>A qualified theatrical production entity may claim a credit against the State income tax for theatrical production activities in the State in an amount equal to the amount stated in the tax credit certificate approved by the Secretary for a theatrical production.</text> </level> <level label="2"> <text>If the tax credit allowed under this section in any taxable year exceeds the total tax otherwise payable by the qualified theatrical production entity for that taxable year, the qualified theatrical production entity may claim a refund in the amount of the excess.</text> </level> </level> <level label="c"> <level label="1"> <text>Before beginning a theatrical production activity, a theatrical production entity must submit to the Department an application to qualify as a theatrical production entity.</text> </level> <level label="2"> <text>The application shall describe the anticipated theatrical production activity, including:</text> <level label="i"> <text>the projected total budget;</text> </level> <level label="ii"> <text>the estimated number of Maryland resident and out–of–state employees and total wages to be paid; and</text> </level> <level label="iii"> <text>the anticipated dates for carrying out the major elements of the theatrical production.</text> </level> </level> <level label="3"> <text>To qualify as a theatrical production entity, the estimated total direct costs incurred in the State must exceed $100,000.</text> </level> <level label="4"> <text>The application shall include any other information required by the Secretary.</text> </level> <level label="5"> <text>The Secretary shall:</text> <level label="i"> <text>determine whether the theatrical production entity qualifies for the credit under this section; and</text> </level> <level label="ii"> <text>notify the Comptroller of the estimated amount of total direct costs and the taxable year the credit will be claimed.</text> </level> </level> </level> <level label="d"> <level label="1"> <text>After completion of the theatrical production activity, a qualified theatrical production entity shall apply to the Department for a tax credit certificate.</text> </level> <level label="2"> <text>The application shall be on a form required by the Secretary and shall include:</text> <level label="i"> <text>proof of the total direct costs that qualify for the tax credit; and</text> </level> <level label="ii"> <text>the number of employees hired and wages paid.</text> </level> </level> <level label="3"> <text>The Secretary may require the information provided in an application for the tax credit certificate to be verified by an independent auditor selected and paid for by the theatrical production entity seeking the tax credit certificate.</text> </level> <level label="4"> <text>Subject to subsection (f) of this section, the Secretary shall determine the total direct costs that qualify for the tax credit and issue a tax credit certificate for 25% of the total direct costs that qualify for the tax credit.</text> </level> </level> <level label="e"> <text>In accordance with § 2.5–109 of the Economic Development Article, the Department shall submit a report that includes:</text> <level label="1"> <text>the number of theatrical production entities submitting applications under subsection (c) of this section;</text> </level> <level label="2"> <text>the number and amount of tax credit certificates issued under subsection (d) of this section;</text> </level> <level label="3"> <text>the number of local technicians and actors hired for a theatrical production during the reporting period;</text> </level> <level label="4"> <text>a list of companies doing business in the State, including hotels, that directly provided goods or services for a theatrical production during the reporting period;</text> </level> <level label="5"> <text>a list of companies doing business in the State that directly provided goods or services for a theatrical production during the reporting period that qualified during the reporting period as minority business enterprises under § 14–301(f) of the State Finance and Procurement Article;</text> </level> <level label="6"> <text>a list of companies doing business in the State that directly provided goods or services for a theatrical production during the reporting period that, as determined by the Department, are considered small businesses; and</text> </level> <level label="7"> <text>any other information that indicates the economic benefits to the State resulting from theatrical production activity during the reporting period.</text> </level> </level> <level label="f"> <level label="1"> <text>Except as provided in paragraph (2) of this subsection, the Secretary may not issue tax credit certificates for credit amounts in the aggregate totaling more than $5,000,000 in any fiscal year.</text> </level> <level label="2"> <text>Subject to the limitation under paragraph (3) of this subsection, if the aggregate credit amounts under the tax credit certificates issued by the Secretary total less than the maximum provided under paragraph (1) of this subsection in any fiscal year, any excess amount may be carried forward and issued under tax credit certificates in a subsequent fiscal year.</text> </level> <level label="3"> <text>The aggregate amount carried forward from all prior fiscal years in accordance with paragraph (2) of this subsection may not exceed $20,000,000.</text> </level> <level label="4"> <text>The Secretary may not issue tax credit certificates for credit amounts totaling more than $2,000,000 in the aggregate for a single theatrical production.</text> </level> </level> <level label="g"> <text>The Department and the Comptroller jointly shall adopt regulations to carry out the provisions of this section and to specify criteria and procedures for the application for, approval of, and monitoring of continuing eligibility for the tax credit under this section.</text> </level> </section> <section article="gtg" article_name="Tax - General" number="10-757" effective_note="EFFECTIVE UNTIL JUNE 30, 2028 PER CHAPTERS 306 AND 307 OF 2023" title_number="10" title_name="Income Tax" subtitle_number="7" subtitle_name="Income Tax Credits"> <level label="a"> <text>In this section, “automated external defibrillator” means a medical heart monitor and defibrillator device that:</text> <level label="1"> <text>is cleared for market by the federal Food and Drug Administration;</text> </level> <level label="2"> <text>recognizes the presence or absence of ventricular fibrillation or rapid ventricular tachycardia;</text> </level> <level label="3"> <text>determines, without intervention by an operator, whether defibrillation should be performed;</text> </level> <level label="4"> <text>after a determination that defibrillation should be performed, automatically charges; and</text> </level> <level label="5"> <text>operates in a manner that:</text> <level label="i"> <text>requires operator intervention to deliver an electrical impulse; or</text> </level> <level label="ii"> <text>automatically continues with delivery of an electrical impulse.</text> </level> </level> </level> <level label="b"> <text>Subject to the limitations of this section, an individual or a business entity that owns a restaurant in the State may claim a credit against the State income tax in an amount equal to the first $500 of the purchase price of an automated external defibrillator purchased for use at the restaurant during the taxable year.</text> </level> <level label="c"> <text>The credit allowed under this section:</text> <level label="1"> <text>is applicable for only one automated external defibrillator purchased for use at a restaurant location in the State with annual gross income of at least $400,000; and</text> </level> <level label="2"> <text>may be claimed only once by an individual or business entity for each restaurant location.</text> </level> </level> <level label="d"> <level label="1"> <text>For any taxable year, the credit allowed under this section may not exceed the lesser of:</text> <level label="i"> <text>$1,500; or</text> </level> <level label="ii"> <text>the State income tax imposed for the taxable year, calculated before the application of the credits allowed under this section and under §§ 10–701 and 10–701.1 of this subtitle but after the application of any other credit allowed under this subtitle.</text> </level> </level> <level label="2"> <text>The unused amount of the credit may not be carried over to any other taxable year.</text> </level> </level> </section> <section article="gtg" article_name="Tax - General" number="10-758" title_number="10" title_name="Income Tax" subtitle_number="7" subtitle_name="Income Tax Credits"> <level label="a"> <text>Subject to the limitations of this section, a taxpayer who is a parent of a stillborn child may claim a credit against the State income tax in an amount equal to $1,000 for each birth for which a certificate of birth resulting in stillbirth has been issued under § 4–213.1 of the Health – General Article or for which a certificate of fetal death or its equivalent has been issued by another state.</text> </level> <level label="b"> <text>The amount of the credit shall be reduced by $50 for each $1,000, or fraction thereof, by which the taxpayer’s federal adjusted gross income exceeds:</text> <level label="1"> <text>$100,000 in the case of an individual; or</text> </level> <level label="2"> <text>$150,000 in the case of a married couple filing a joint income tax return.</text> </level> </level> <level label="c"> <text>The credit allowed under this section may be claimed only for the taxable year in which the stillbirth occurred.</text> </level> <level label="d"> <text>If the credit allowed under this section in any taxable year exceeds the State income tax for that taxable year, the taxpayer may claim a refund in the amount of the excess.</text> </level> </section> <section article="gtg" article_name="Tax - General" number="10-759" effective_note="EFFECTIVE UNTIL JUNE 30, 2029 PER CHAPTER 877 OF 2026" title_number="10" title_name="Income Tax" subtitle_number="7" subtitle_name="Income Tax Credits"> <level label="a"> <level label="1"> <text>In this section the following words have the meanings indicated.</text> </level> <level label="2"> <text>“Department” means the Department of Emergency Management.</text> </level> <level label="3"> <text>“Employee retirement system” has the meaning stated in § 10–209(a) of this title.</text> </level> <level label="4"> <text>“9–1–1 specialist” has the meaning stated in § 9–262(a) of the Tax – Property Article.</text> </level> <level label="5"> <text>“Secretary” means the Secretary of Emergency Management.</text> </level> </level> <level label="b"> <level label="1"> <text>For taxable years beginning after December 31, 2025, but before January 1, 2029, an individual who is a retired 9–1–1 specialist may claim a credit against the State income tax in the amount stated in the tax credit certificate approved by the Secretary.</text> </level> <level label="2"> <text>The individual shall provide the tax credit certificate to the Comptroller, in the form and manner required by the Comptroller.</text> </level> </level> <level label="c"> <level label="1"> <text>An individual qualified for the credit under this section may apply to the Department for a tax credit certificate.</text> </level> <level label="2"> <level label="i"> <text>The Secretary shall approve each application under paragraph (1) of this subsection that qualifies for a tax credit certificate.</text> </level> <level label="ii"> <text>Subject to paragraph (4) of this subsection, the Department shall issue a tax credit certificate to the qualified individual in an amount equal to 4.75% of the first $15,000 of retirement income from an employee retirement system attributable to the individual’s service as a 9–1–1 specialist in the State, not to exceed $700.</text> </level> </level> <level label="3"> <text>The Secretary shall:</text> <level label="i"> <text>determine whether the individual is qualified for the credit under this section; and</text> </level> <level label="ii"> <text>notify the Comptroller, in the form and manner required by the Comptroller, of the individuals to whom the Department has issued a tax credit certificate under this section.</text> </level> </level> <level label="4"> <level label="i"> <text>The total amount of the tax credit certificates approved by the Secretary may not exceed $250,000 for each taxable year.</text> </level> <level label="ii"> <text>If the total amount of tax credit certificates the Department is required to approve under paragraph (2) of this subsection exceeds $250,000 in a fiscal year, the Department shall issue tax credit certificates to qualified individuals on a pro rata basis.</text> </level> </level> </level> </section> <section article="gtg" article_name="Tax - General" number="10-804" title_number="10" title_name="Income Tax" subtitle_number="8" subtitle_name="Returns and Declarations"> <level label="a"> <text>Each person required under this subtitle to file an income tax return or estimated income tax declaration or return shall file a return or declaration with the Comptroller, whether or not:</text> <level label="1"> <text>the person owes income tax; or</text> </level> <level label="2"> <text>the Comptroller sends the person a form or otherwise requests that the return or declaration be filed.</text> </level> </level> <level label="b"> <level label="1"> <text>Each income tax return and estimated income tax declaration and return shall be:</text> <level label="i"> <text>signed in the same manner required for the signing of a federal return under §§ 6061 through 6064 of the Internal Revenue Code; and</text> </level> <level label="ii"> <text>made under oath.</text> </level> </level> <level label="2"> <level label="i"> <text>An individual who is an income tax return preparer with respect to a return or claim for refund of tax shall sign the return or claim for refund after it is completed and before it is presented to the taxpayer or nontaxable entity for signature.</text> </level> <level label="ii"> <text>If the preparer is unavailable for signature, another preparer shall review the entire preparation of the return or claim for refund, and then shall sign the return or claim for refund. The preparer shall sign the return in the manner prescribed by the Comptroller in forms, instructions, or other appropriate guidance.</text> </level> </level> <level label="3"> <text>If more than one income tax return preparer is involved in the preparation of the return or claim for refund, the individual preparer who has the primary responsibility as between or among the preparers for the overall substantive accuracy of the preparation of the return or claim for refund shall be considered to be the income tax return preparer for purposes of paragraph (2) of this subsection.</text> </level> </level> <level label="c"> <level label="1"> <text>To properly identify persons listed in a return or other document, a person shall include in the document the Social Security or other identifying number that the Comptroller requires:</text> <level label="i"> <text>of the person required to file the return or document; and</text> </level> <level label="ii"> <text>of the person on whose behalf the return or document is filed.</text> </level> </level> <level label="2"> <text>If a return or document is filed on behalf of a person, that person shall provide the identifying number required in a return or document to the person who files the return or document.</text> </level> <level label="3"> <text>Any return or claim for refund prepared by an income tax return preparer shall bear the identifying number for securing proper identification of the preparer, the preparer’s employer, or both, as prescribed under § 6109(a)(4) of the Internal Revenue Code.</text> </level> </level> <level label="d"> <text>Each resident shall include on the income tax return of the resident:</text> <level label="1"> <text>for an individual other than a fiduciary, the name of the county and municipal corporation, if any, where the resident resides; and</text> </level> <level label="2"> <text>for a personal representative, the name of the county where the decedent was domiciled on the date of the decedent’s death; or</text> </level> <level label="3"> <text>for a fiduciary other than a personal representative, the name of:</text> <level label="i"> <text>the county where the trust is principally administered; or</text> </level> <level label="ii"> <text>if the trust is not principally administered in the State, the county to which the trust is otherwise principally connected.</text> </level> </level> </level> <level label="e"> <text>Each person required under this subtitle to file an income tax return or estimated income tax declaration or return shall:</text> <level label="1"> <text>comply with the regulations of the Comptroller;</text> </level> <level label="2"> <text>keep the records that the Comptroller requires; and</text> </level> <level label="3"> <text>attach to an income tax return or otherwise file with the Comptroller any records or statements that the Comptroller requires, including:</text> <level label="i"> <text>for an individual who has income tax withheld from salary, wages, or other compensation for personal services, or other payments, a copy of the statement from the person who withholds the tax that states:</text> <level label="1"> <text>the amount of salary, wages, or other compensation for personal services paid and the income tax withheld; or</text> </level> <level label="2"> <text>the amount of payments made and the income tax withheld;</text> </level> </level> <level label="ii"> <text>a copy of the federal income tax return:</text> <level label="1"> <text>for a corporation; and</text> </level> <level label="2"> <text>if the Comptroller requests, for an individual;</text> </level> </level> <level label="iii"> <text>for a corporation, the statements required under § 10–804.1 of this subtitle; and</text> </level> <level label="iv"> <text>if the Comptroller requests, for a corporation that is a member of an affiliated group or controlled group under § 1504 or § 1563 of the Internal Revenue Code, a statement of all intermember costs or expenses and all intermember sales, exchanges, or other transactions involving tangible or intangible property for the taxable year.</text> </level> </level> </level> <level label="f"> <text>An individual may designate a contribution to the State Chesapeake Bay and Endangered Species Fund, established under §§ 1-701 through 1-706 of the Natural Resources Article, by the checkoff system on the return.</text> </level> <level label="g"> <text>The Comptroller shall provide that an income tax return may be completed using whole dollar amounts instead of expressing amounts in exact dollars and cents by:</text> <level label="1"> <text>disregarding a fractional part of a dollar less than 50 cents; and</text> </level> <level label="2"> <text>increasing to 1 dollar a fractional part of a dollar of at least 50 cents.</text> </level> </level> <level label="h"> <text>An individual may designate a contribution to the Maryland Cancer Fund, established under § 20-117 of the Health - General Article, by the checkoff system on the return.</text> </level> <level label="i"> <text>An individual may designate a contribution to the Waiting List Equity Fund, established under § 7–205 of the Health – General Article, by the checkoff system on the return.</text> </level> <level label="j"> <level label="1"> <text>Except as otherwise provided in this subsection, a taxpayer claiming any of the following tax credits shall submit a claim for the credit by electronic means as required by the Comptroller by regulation:</text> <level label="i"> <text>the Job Creation Tax Credit, as provided under Title 6, Subtitle 2 of the Economic Development Article;</text> </level> <level label="ii"> <text>the One Maryland Tax Credit, as provided under Title 6, Subtitle 4 of the Economic Development Article;</text> </level> <level label="iii"> <text>the Biotechnology Investment Incentive Tax Credit, as provided under § 10–725 of this title;</text> </level> <level label="iv"> <text>the Enterprise Zone Income Tax Credit, as provided under § 10–702 of this title; and</text> </level> <level label="v"> <text>any other tax credit specified by the Comptroller through regulation.</text> </level> </level> <level label="2"> <text>Before adding any tax credit not listed in paragraph (1)(i) through (iv) of this subsection to the requirement of this subsection, the Comptroller shall determine whether the addition of the tax credit will have a material adverse impact or undue administrative burden on the Comptroller.</text> </level> <level label="3"> <text>On written request for a waiver by a taxpayer, the Comptroller may grant the taxpayer a waiver of the requirements of this subsection if the taxpayer establishes to the satisfaction of the Comptroller either reasonable cause for not filing the claim for the credit by electronic means or that there is no feasible means of filing the claim for the credit by electronic means without creating undue hardship.</text> </level> </level> <level label="k"> <level label="1"> <text>An individual who files an income tax return electronically may elect to use all or a portion of the individual’s income tax refund to purchase U.S. Series I Savings Bonds.</text> </level> <level label="2"> <text>If an individual elects to purchase U.S. Series I Savings Bonds under paragraph (1) of this subsection:</text> <level label="i"> <text>the individual shall make the designation in $50 increments; and</text> </level> <level label="ii"> <text>the Comptroller shall send any remaining portion of the individual’s refund to the individual.</text> </level> </level> <level label="3"> <text>The Comptroller shall adopt regulations to implement the provisions of this subsection.</text> </level> </level> <level label="l"> <text>An individual may designate a contribution to the Maryland Veterans Trust Fund established under § 9–913 of the State Government Article by the checkoff on the return.</text> </level> </section> <section article="gtg" article_name="Tax - General" number="10-804.1" title_number="10" title_name="Income Tax" subtitle_number="8" subtitle_name="Returns and Declarations"> <level label="a"> <text>In this section:</text> <level label="1"> <text>“corporate group” means:</text> <level label="i"> <text>an affiliated group or controlled group under § 1504 or § 1563 of the Internal Revenue Code; or</text> </level> <level label="ii"> <text>an affiliated group of corporations:</text> <level label="1"> <text>that is engaged in a unitary business; and</text> </level> <level label="2"> <text>more than 50% of the voting stock of each member of which is directly or indirectly owned by a common owner or common owners, either corporate or noncorporate, or by one or more members of the group; and</text> </level> </level> </level> <level label="2"> <text>“corporate group” does not include:</text> <level label="i"> <text>any corporation that, for any reason, is not subject to United States federal income tax;</text> </level> <level label="ii"> <text>an insurer as defined in § 1–101 of the Insurance Article; or</text> </level> <level label="iii"> <text>a regulated investment company, as defined in § 851(a) of the Internal Revenue Code.</text> </level> </level> </level> <level label="b"> <text>Each corporation that is required to file an income tax return under this title and is a member of a corporate group shall file with the Comptroller:</text> <level label="1"> <text>a pro forma “water’s edge” combined corporate income tax return filed in accordance with regulations adopted by the Comptroller; and</text> </level> <level label="2"> <text>in a format specified by the Comptroller:</text> <level label="i"> <text>the sales factor that would be calculated for this State and the difference in Maryland income tax that would be owed if the corporation were required to include in the numerator of the sales factor for purposes of apportioning income to the State all sales of property shipped from an office, store, warehouse, factory, or other place of storage in this State where:</text> <level label="1"> <text>the purchaser is the federal government; or</text> </level> <level label="2"> <text>the property is shipped or delivered to a customer in a state in which the selling corporation is not subject to a state corporate income tax or state franchise tax measured by net income and could not be subjected to such a tax if the state were to impose it; and</text> </level> </level> <level label="ii"> <text>for any income that the taxpayer has identified, on the income tax return filed under this title or on an income tax return filed in any state, as income that is nonoperational and therefore not apportionable:</text> <level label="1"> <text>the amount and source of that nonoperational income; and</text> </level> <level label="2"> <text>if the commercial domicile of the corporation is in this State, the difference in tax that would be owed if the corporation were required to allocate 100% of the nonoperational income to Maryland to the fullest extent allowed under the United States Constitution.</text> </level> </level> </level> </level> <level label="c"> <level label="1"> <text>The statements required under subsection (b) of this section:</text> <level label="i"> <text>shall be filed annually, for all taxable years beginning after December 31, 2005, but before January 1, 2011, on or before dates specified by the Comptroller in an electronic format as specified by the Comptroller;</text> </level> <level label="ii"> <text>shall be:</text> <level label="1"> <text>made under oath and signed in the same manner as required for income tax returns under § 10–804 of this subtitle; and</text> </level> <level label="2"> <text>subject to audit by the Comptroller in the course of and under the normal procedures applicable to corporate income tax return audits; and</text> </level> </level> <level label="iii"> <text>notwithstanding any other provision of law, shall be treated as confidential taxpayer information subject to Title 13, Subtitle 2 of this article.</text> </level> </level> <level label="2"> <text>The Comptroller shall develop and implement an oversight and penalty system to ensure that corporations provide the required disclosure statements in a timely and accurate manner.</text> </level> <level label="3"> <text>The Comptroller shall publish the name of, and penalty imposed on, any corporation failing to file a statement required under this section or filing an inaccurate statement.</text> </level> </level> <level label="d"> <level label="1"> <text>A corporation submitting a statement required under this section may submit supplemental information that, in its sole judgment and discretion, could facilitate proper interpretation of the information included in the statement.</text> </level> <level label="2"> <text>A corporation shall file a supplemental statement under this section within 60 days after:</text> <level label="i"> <text>the corporation files an amended tax return under this title; or</text> </level> <level label="ii"> <text>the corporation’s tax liability for a tax year is changed as the result of an audit adjustment or final determination of liability by the Comptroller or by a court of law.</text> </level> </level> </level> <level label="e"> <level label="1"> <text>The Comptroller shall:</text> <level label="i"> <text>collect, compile, and analyze the information submitted under this section;</text> </level> <level label="ii"> <text>use the information submitted under this section to provide analyses as requested by the Governor or the General Assembly relating to the corporate income tax or proposals for changes to the corporate income tax; and</text> </level> <level label="iii"> <text>on or before March 1 of each year, based on information provided in income tax returns and the data submitted under this subsection, submit a report to the Governor and, subject to § 2–1257 of the State Government Article, to the General Assembly, concerning the corporate income tax.</text> </level> </level> <level label="2"> <text>The report required under this subsection shall:</text> <level label="i"> <text>summarize the information submitted under this section; and</text> </level> <level label="ii"> <text>provide detailed analyses of the characteristics of corporate taxpayers, including:</text> <level label="1"> <text>historical series of data and detailed reports for the reported year; and</text> </level> <level label="2"> <text>the distribution of Maryland taxable income, income tax liability, and other elements of the corporate income tax such as tax credits, modifications to income, and net operating loss carryovers.</text> </level> </level> </level> <level label="3"> <text>The information provided in the report shall be provided by various categories, including:</text> <level label="i"> <text>business category; and</text> </level> <level label="ii"> <text>various measures of size, such as taxable income, in–State and worldwide payroll, and in–State and worldwide gross receipts.</text> </level> </level> </level> <level label="f"> <text>The Comptroller shall adopt appropriate regulations to implement the provisions of this section.</text> </level> </section> <section article="gtg" article_name="Tax - General" number="10-805" title_number="10" title_name="Income Tax" subtitle_number="8" subtitle_name="Returns and Declarations"> <level label="a"> <text>Except as provided in subsection (b) of this section and except for a fiduciary, each resident shall file an income tax return if, after exclusion of Social Security and railroad retirement benefits that are included in federal gross income, the resident:</text> <level label="1"> <text>would be required to file a federal income tax return under § 6012(a) of the Internal Revenue Code; or</text> </level> <level label="2"> <text>would have federal gross income that exceeds the amount specified in § 6012(a) of the Internal Revenue Code after the federal gross income is increased by the modifications in §§ 10-204 and 10-205 of this title.</text> </level> </level> <level label="b"> <text>A resident dependent shall file an income tax return if the dependent:</text> <level label="1"> <text>would have federal gross income that exceeds the amount specified in § 6012(a)(1)(A)(i) of the Internal Revenue Code after the federal gross income is modified under Subtitle 2, Part II of this title; and</text> </level> <level label="2"> <text>otherwise would be described in § 6012(a)(1)(A)(i) of the Internal Revenue Code.</text> </level> </level> <level label="c"> <text>If an individual whose status changes, during a taxable year, from resident to nonresident or nonresident to resident is required to file an income tax return under subsection (a) or subsection (b) of this section or § 10-806 of this subtitle, the individual shall report on the return the Maryland taxable income:</text> <level label="1"> <text>received during the part of the taxable year that the individual was a resident; and</text> </level> <level label="2"> <text>derived as a nonresident.</text> </level> </level> </section> <section article="gtg" article_name="Tax - General" number="10-806" title_number="10" title_name="Income Tax" subtitle_number="8" subtitle_name="Returns and Declarations"> <level label="a"> <text>Except as provided in subsection (b) of this section, each nonresident who has Maryland taxable income and is required to file a federal income tax return shall file an income tax return.</text> </level> <level label="b"> <text>A nonresident dependent who has Maryland taxable income shall file an income tax return if the dependent meets the requirements under § 10-805(b) of this subtitle.</text> </level> <level label="c"> <text>For county income tax purposes, a nonresident who derives income from salary, wages, or other compensation for personal services for employment in a county shall file an income tax return, unless the Comptroller determines that each locality in which the nonresident resides:</text> <level label="1"> <text>imposes no tax on the income of a Maryland resident derived from wages for employment in that locality;</text> </level> <level label="2"> <text>exempts that income from its tax on income; or</text> </level> <level label="3"> <text>allows a credit for that income and exempts that income from the withholding requirements for its tax on income.</text> </level> </level> <level label="d"> <level label="1"> <text>Notwithstanding the provisions of subsection (a) of this section, except as provided in paragraph (2) of this subsection, a nonresident individual who is not otherwise required to file a return shall file a return if the individual:</text> <level label="i"> <text>is not a dependent;</text> </level> <level label="ii"> <text>is required to file a federal income tax return; and</text> </level> <level label="iii"> <text>has income or losses derived from a business, occupation, profession, or trade carried on in this State.</text> </level> </level> <level label="2"> <text>A nonresident individual is not required to file a return if:</text> <level label="i"> <text>the individual’s only income in this State is wages, as defined in § 10-905(f) of this title, that are earned in this State; and</text> </level> <level label="ii"> <text>the Comptroller and the state in which the nonresident resides have agreed in writing to allow a reciprocal exemption from tax and withholding for the wages of residents of each state that are earned in the other state.</text> </level> </level> </level> </section> <section article="gtg" article_name="Tax - General" number="10-807" title_number="10" title_name="Income Tax" subtitle_number="8" subtitle_name="Returns and Declarations"> <level label="a"> <text>Except as provided in subsection (b) of this section, a married couple who files a joint federal income tax return shall file a joint Maryland income tax return.</text> </level> <level label="b"> <text>A married couple who files a joint federal income tax return may file separate State income tax returns if:</text> <level label="1"> <text>one spouse is a resident and the other spouse is a nonresident;</text> </level> <level label="2"> <text>the spouses are domiciled, or maintain principal places of abode, in different counties on the last day of the taxable year;</text> </level> <level label="3"> <text>the spouses have different taxable periods; or</text> </level> <level label="4"> <text>the Comptroller determines circumstances warrant.</text> </level> </level> </section> <section article="gtg" article_name="Tax - General" number="10-808" title_number="10" title_name="Income Tax" subtitle_number="8" subtitle_name="Returns and Declarations"> <level label="a"> <text>Except as otherwise provided in this section, if an individual required to file an income tax return is unable to do so, an authorized agent of the individual shall file the return.</text> </level> <level label="b"> <level label="1"> <text>If an individual required to file an income tax return is a minor, the individual’s parent or guardian shall file the return.</text> </level> <level label="2"> <text>If an individual required to file an income tax return is a disabled person as defined in § 13-101 of the Estates and Trusts Article, the individual’s guardian shall file the return.</text> </level> </level> <level label="c"> <text>If an individual required to file an income tax return dies, the final income tax return of the individual shall be filed:</text> <level label="1"> <text>by the personal representative of the individual’s estate;</text> </level> <level label="2"> <text>if there is no personal representative, by the individual’s surviving spouse;</text> </level> <level label="3"> <text>jointly by the individual’s surviving spouse and the personal representative of the individual’s estate; or</text> </level> <level label="4"> <text>jointly by the personal representative of the individual’s estate and the personal representative of the deceased spouse’s estate.</text> </level> </level> </section> <section article="gtg" article_name="Tax - General" number="10-809" title_number="10" title_name="Income Tax" subtitle_number="8" subtitle_name="Returns and Declarations"> <text>If an individual is not required to file an income tax return under § 10–805, § 10–806, or § 10–813 of this subtitle, the individual:</text> <level label="1"> <text>is not liable for income tax; and</text> </level> <level label="2"> <text>may file an income tax return to claim a refund of the income tax withheld or estimated income tax paid or a refund under § 10–704, § 10–707, § 10–714, or § 10–751 of this title.</text> </level> </section> <section article="gtg" article_name="Tax - General" number="10-809.1" title_number="10" title_name="Income Tax" subtitle_number="8" subtitle_name="Returns and Declarations"> <level label="a"> <text>Except as provided in subsection (b) of this section, for a taxable year beginning after December 31, 2029, an individual shall file an income tax return electronically.</text> </level> <level label="b"> <text>An individual is not required to file an income tax return electronically if the individual:</text> <level label="1"> <text>is at least 65 years old as of December 31 of the taxable year for which the return is being filed;</text> </level> <level label="2"> <text>is single or a dependent taxpayer and the individual’s Maryland adjusted gross income is less than $200,000;</text> </level> <level label="3"> <text>is married filing separately, a head of household, or a qualifying widow or widower with a dependent child and the Maryland adjusted gross income of the individual is less than $400,000; or</text> </level> <level label="4"> <text>is married filing jointly and the Maryland adjusted gross income of the individual and the individual’s spouse is less than $400,000.</text> </level> </level> </section> <section article="gtg" article_name="Tax - General" number="10-810" title_number="10" title_name="Income Tax" subtitle_number="8" subtitle_name="Returns and Declarations"> <level label="a"> <text>A corporation that, during a taxable year, has Maryland taxable income shall file an income tax return.</text> </level> <level label="b"> <text>Notwithstanding the provisions of subsection (a) of this section, a corporation which is not otherwise required to file a return shall file a return if the corporation:</text> <level label="1"> <text>is not tax exempt under § 10-104 of this title;</text> </level> <level label="2"> <text>is required to file a federal income tax return;</text> </level> <level label="3"> <text>carries on business within this State; and</text> </level> <level label="4"> <text>has income or losses attributable to sources within this State.</text> </level> </level> </section> <section article="gtg" article_name="Tax - General" number="10-811" title_number="10" title_name="Income Tax" subtitle_number="8" subtitle_name="Returns and Declarations"> <text>Each member of an affiliated group of corporations shall file a separate income tax return.</text> </section> <section article="gtg" article_name="Tax - General" number="10-812" title_number="10" title_name="Income Tax" subtitle_number="8" subtitle_name="Returns and Declarations"> <level label="a"> <text>A corporation exempt from income tax under § 10-104 of this title shall file an income tax return if the corporation:</text> <level label="1"> <text>has unrelated business taxable income, as defined under § 512 of the Internal Revenue Code;</text> </level> <level label="2"> <text>is exempt from taxation under § 501(c)(2) of the Internal Revenue Code; or</text> </level> <level label="3"> <text>is an S corporation that is incorporated or does business in the State.</text> </level> </level> <level label="b"> <text>An organization that is exempt from taxation under § 501(c)(3) or (4) of the Internal Revenue Code may file an income tax return to claim a refund under § 10-714 of this title.</text> </level> </section> <section article="gtg" article_name="Tax - General" number="10-812.1" title_number="10" title_name="Income Tax" subtitle_number="8" subtitle_name="Returns and Declarations"> <level label="a"> <text>Except as provided in subsection (b) of this section, for a taxable year beginning after December 31, 2026, a corporation shall file an income tax return electronically.</text> </level> <level label="b"> <text>A corporation with fewer than 15 employees is not required to file an income tax return electronically.</text> </level> </section> <section article="gtg" article_name="Tax - General" number="10-813" title_number="10" title_name="Income Tax" subtitle_number="8" subtitle_name="Returns and Declarations"> <text>Each fiduciary who has Maryland taxable income and is required to file a federal income tax return shall file an income tax return.</text> </section> <section article="gtg" article_name="Tax - General" number="10-814" title_number="10" title_name="Income Tax" subtitle_number="8" subtitle_name="Returns and Declarations"> <text>Each partnership, as defined in § 761 of the Internal Revenue Code, shall file an income tax return.</text> </section> <section article="gtg" article_name="Tax - General" number="10-815" title_number="10" title_name="Income Tax" subtitle_number="8" subtitle_name="Returns and Declarations"> <level label="a"> <text>Except as provided in subsections (b) and (c) of this section, each individual who reasonably expects estimated income tax for a taxable year on income not subject to withholding under Subtitle 9 of this title to exceed one-half the amount specified in § 6654(e)(1) of the Internal Revenue Code shall file a declaration of estimated income tax.</text> </level> <level label="b"> <text>Unless withholding is required under § 10-906 of this title, each individual who receives income of $500 or more in cash or property from wagering, including the operation of a gambling machine or device and participation in an amusement, educational, or advertising program, contest, lottery, or raffle, shall file a declaration of estimated income tax.</text> </level> <level label="c"> <text>For any taxable year ending before the date 2 years after the date of the decedent’s death, subsection (a) of this section does not apply to:</text> <level label="1"> <text>the personal representative of the estate of the decedent; or</text> </level> <level label="2"> <text>the fiduciary of a trust:</text> <level label="i"> <text>all of which was treated as owned by the decedent under §§ 671 through 679 of the Internal Revenue Code; and</text> </level> <level label="ii"> <level label="1"> <text>to which the residue of the decedent’s estate will pass under the decedent’s will; or</text> </level> <level label="2"> <text>if a will is not admitted to probate, which is the trust primarily responsible for paying debts, taxes, and expenses of administration of the decedent’s estate.</text> </level> </level> </level> </level> </section> <section article="gtg" article_name="Tax - General" number="10-816" title_number="10" title_name="Income Tax" subtitle_number="8" subtitle_name="Returns and Declarations"> <text>Each corporation and each partnership that reasonably expects estimated income tax for a taxable year to exceed $1,000 shall file a declaration of estimated income tax.</text> </section> <section article="gtg" article_name="Tax - General" number="10-817" title_number="10" title_name="Income Tax" subtitle_number="8" subtitle_name="Returns and Declarations"> <level label="a"> <text>A person required to withhold income tax under § 10–906 of this title shall file an income tax withholding return.</text> </level> <level label="b"> <text>For a taxable year beginning after December 31, 2026, a person shall file an income tax withholding return electronically.</text> </level> </section> <section article="gtg" article_name="Tax - General" number="10-818" title_number="10" title_name="Income Tax" subtitle_number="8" subtitle_name="Returns and Declarations"> <level label="a"> <text>Each organization that is exempt from taxation under § 10-104 of this title and is required to make its federal annual returns available for public inspection under § 6104(e) of the Internal Revenue Code shall also make available for public inspection any annual return required to be filed under this subtitle.</text> </level> <level label="b"> <text>A return required to be made available for public inspection under subsection (a) of this section shall be made available:</text> <level label="1"> <text>at any office at which the organization’s federal returns are required to be made available; and</text> </level> <level label="2"> <text>for 3 years from the date the return was required to be filed.</text> </level> </level> </section> <section article="gtg" article_name="Tax - General" number="10-819" title_number="10" title_name="Income Tax" subtitle_number="8" subtitle_name="Returns and Declarations"> <level label="a"> <text>Each limited liability company as defined under Title 4A of the Corporations and Associations Article shall file an income tax return unless it has only one member and it is disregarded as an entity separate from its member for federal income tax purposes.</text> </level> <level label="b"> <level label="1"> <text>If the limited liability company is classified as a partnership, as defined in § 761 of the Internal Revenue Code, it shall file a partnership tax return.</text> </level> <level label="2"> <text>If the limited liability company is classified as a corporation under Chapter 1, Subchapter C or Subchapter S of the Internal Revenue Code, it shall file the appropriate corporate tax return.</text> </level> </level> <level label="c"> <text>If the limited liability company has only one member and it is disregarded as an entity separate from its member for federal income tax purposes, the profit or loss of the limited liability company shall be reflected on the income tax return filed by the member of the limited liability company.</text> </level> </section> <section article="gtg" article_name="Tax - General" number="10-819.1" title_number="10" title_name="Income Tax" subtitle_number="8" subtitle_name="Returns and Declarations"> <level label="a"> <text>In this section, “pass–through entity” has the meaning stated in § 10–102.1 of this title.</text> </level> <level label="b"> <text>For a taxable year beginning after December 31, 2026, a pass–through entity shall file an income tax return electronically.</text> </level> </section> <section article="gtg" article_name="Tax - General" number="10-820" title_number="10" title_name="Income Tax" subtitle_number="8" subtitle_name="Returns and Declarations"> <level label="a"> <level label="1"> <text>Except as provided in paragraph (3) of this subsection, an individual or partnership required under Part II of this subtitle to file a return for a taxable year shall complete and file with the Comptroller an income tax return:</text> <level label="i"> <text>on or before April 15th of the next taxable year; or</text> </level> <level label="ii"> <text>if the income tax is computed for a fiscal year, on or before the 15th day of the 4th month after the end of that year.</text> </level> </level> <level label="2"> <text>Within 60 days after the date on which a partnership is dissolved or liquidated or withdraws voluntarily or involuntarily from the State, the partnership shall complete and file with the Comptroller an income tax return.</text> </level> <level label="3"> <text>If the due date for a federal income tax return filed electronically is later than April 15th of the next taxable year, the due date for an individual to complete and file a Maryland income tax return shall be the due date for filing the individual’s federal income tax return, if the individual:</text> <level label="i"> <text>files the Maryland income tax return electronically; and</text> </level> <level label="ii"> <text>electronically pays any balance due with the return.</text> </level> </level> </level> <level label="b"> <level label="1"> <text>Except as provided in subsections (c) and (d) of this section, an individual required under § 10-815 of this subtitle to file a declaration of estimated income tax for a taxable year shall complete and file with the Comptroller:</text> <level label="i"> <text>an initial declaration on or before April 15 of that year; and</text> </level> <level label="ii"> <text>a quarterly estimated income tax return on or before June 15, September 15, and January 15 after the filing of the initial declaration.</text> </level> </level> <level label="2"> <text>An individual shall file a declaration that was not filed on April 15 or an amended declaration, on any date allowed in paragraph (1)(ii) of this subsection for filing a quarterly estimated income tax return.</text> </level> <level label="3"> <text>If an individual elects to pay the income tax in full on or before January 31, instead of filing the quarterly estimated income tax return required on January 15, the individual shall file a final income tax return on or before January 31.</text> </level> </level> <level label="c"> <text>If an individual required to file a declaration of estimated income tax has estimated gross income from fishing or farming, including oyster farming, that is at least 2/3 of the total estimated income for a taxable year, the individual may complete and file with the Comptroller:</text> <level label="1"> <text>a declaration of estimated income tax for that taxable year on or before January 15 of the next taxable year; or</text> </level> <level label="2"> <text>an income tax return for that taxable year on or before March 1 of the next taxable year.</text> </level> </level> <level label="d"> <text>An individual required to file a declaration of estimated income tax under § 10-815(b) of this subtitle shall complete and file with the Comptroller, within 60 days after the individual receives income from wagering:</text> <level label="1"> <text>a declaration of estimated income tax; or</text> </level> <level label="2"> <text>if the individual has filed a declaration during that taxable year, an amended declaration.</text> </level> </level> </section> <section article="gtg" article_name="Tax - General" number="10-821" title_number="10" title_name="Income Tax" subtitle_number="8" subtitle_name="Returns and Declarations"> <level label="a"> <level label="1"> <text>A corporation required under Part II of this subtitle to file a return for a taxable year shall complete and file with the Comptroller an income tax return:</text> <level label="i"> <text>on or before the April 15 that follows that taxable year; or</text> </level> <level label="ii"> <text>if income tax is computed for a fiscal year, on or before the 15th day of the 4th month after the end of that year.</text> </level> </level> <level label="2"> <text>Within 60 days after a corporation loses or surrenders its charter in the State, is dissolved or liquidated, or voluntarily or involuntarily withdraws from the State, the corporation shall complete and file with the Comptroller an income tax return.</text> </level> </level> <level label="b"> <text>A corporation required under § 10-816 of this subtitle to file a declaration of estimated income tax for a taxable year shall complete and file with the Comptroller a quarterly estimated tax return on or before the 15th day of the 4th, 6th, 9th, and 12th months of that year.</text> </level> </section> <section article="gtg" article_name="Tax - General" number="10-822" title_number="10" title_name="Income Tax" subtitle_number="8" subtitle_name="Returns and Declarations"> <level label="a"> <level label="1"> <text>Except as provided in paragraphs (2) and (3) of this subsection, each person required under § 10-906 of this title to withhold income tax shall complete and file with the Comptroller a quarterly income tax withholding return, on or before the 15th day of the month that follows the calendar quarter in which that income tax was withheld.</text> </level> <level label="2"> <text>Subject to subsection (b) of this section, if the person reasonably expects the total amount of income tax required to be withheld in a quarterly period to be $700 or more, instead of a quarterly income tax withholding return the person shall complete and file with the Comptroller a monthly income tax withholding return:</text> <level label="i"> <text>for the month of January, on or before February 15;</text> </level> <level label="ii"> <text>for the month of February, on or before March 15;</text> </level> <level label="iii"> <text>for the month of March, on or before April 15;</text> </level> <level label="iv"> <text>for the month of April, on or before May 15;</text> </level> <level label="v"> <text>for the month of May, on or before June 15;</text> </level> <level label="vi"> <text>for the month of June, on or before July 15;</text> </level> <level label="vii"> <text>for the month of July, on or before August 15;</text> </level> <level label="viii"> <text>for the month of August, on or before September 15;</text> </level> <level label="ix"> <text>for the month of September, on or before October 15;</text> </level> <level label="x"> <text>for the month of October, on or before November 15;</text> </level> <level label="xi"> <text>for the month of November, on or before December 15; and</text> </level> <level label="xii"> <text>for the month of December, on or before January 15.</text> </level> </level> <level label="3"> <text>If the person reasonably expects the total amount of income tax required to be withheld in a calendar year to be less than $250 instead of a quarterly income tax withholding return the person shall complete and file with the Comptroller an annual income tax withholding return on or before January 31 that follows that calendar year.</text> </level> </level> <level label="b"> <level label="1"> <text>Subject to paragraph (2) of this subsection, if a person was required to withhold $15,000 or more for the preceding calendar year, the person shall complete and file an income tax withholding return with the Comptroller within 3 business days following each payroll that causes the total accumulated tax withheld to equal or exceed $700.</text> </level> <level label="2"> <level label="i"> <text>If a person is allowed to file federal withholding tax returns on a monthly basis, the person may apply to the Comptroller for a waiver from the requirements of paragraph (1) of this subsection.</text> </level> <level label="ii"> <text>A waiver provided under this paragraph shall allow a person to file State withholding tax returns on a monthly basis for the remainder of the calendar year.</text> </level> <level label="iii"> <text>A person may apply for renewal of a waiver provided under this subsection if the person remains eligible to file federal withholding tax returns on a monthly basis.</text> </level> <level label="iv"> <text>The Comptroller may establish regulations to implement the provisions of this subsection.</text> </level> </level> </level> <level label="c"> <level label="1"> <text>A person required to file a quarterly or monthly income tax withholding return shall continue to file returns, whether or not the person is withholding any income tax, until the person gives the Comptroller written notice that the person no longer has employees or no longer is liable to file the return.</text> </level> <level label="2"> <text>A person required to file returns under subsection (b) of this section shall file a return at least once every month until the person gives the Comptroller written notice that the person no longer has employees or no longer is liable to file the return.</text> </level> </level> <level label="d"> <text>Each person required to file a return under this section shall file returns for other periods and on other dates as the Comptroller specifies by regulation, including periods in which the person does not pay wages subject to withholding.</text> </level> </section> <section article="gtg" article_name="Tax - General" number="10-823" title_number="10" title_name="Income Tax" subtitle_number="8" subtitle_name="Returns and Declarations"> <text>If the Comptroller finds that good cause exists and subject to § 13-601 of this article, the Comptroller may extend the time to file an income tax return:</text> <level label="1"> <text>up to 6 months for an individual or, if an individual is out of the United States, up to 1 year; and</text> </level> <level label="2"> <text>up to 7 months for a corporation.</text> </level> </section> <section article="gtg" article_name="Tax - General" number="10-824" title_number="10" title_name="Income Tax" subtitle_number="8" subtitle_name="Returns and Declarations"> <level label="a"> <level label="1"> <text>In this section the following words have the meanings indicated.</text> </level> <level label="2"> <level label="i"> <text>“Income tax return preparer” means a person who for compensation prepares a substantial portion or more of a qualified return or employs one or more persons to prepare for compensation a substantial portion or more of a qualified return.</text> </level> <level label="ii"> <text>“Income tax return preparer” does not include a person who merely performs those acts described under § 7701(a)(36)(B) of the Internal Revenue Code.</text> </level> </level> <level label="3"> <text>“Qualified return” means any original return of individual income tax imposed by this title, regardless of whether a tax is due or a refund is claimed.</text> </level> </level> <level label="b"> <text>Subject to § 10–809.1 of this subtitle and except as otherwise provided in this section, an income tax return preparer shall file all qualified returns that the income tax return preparer prepares by electronic means as prescribed by the Comptroller if the income tax return preparer has prepared more than 100 qualified tax returns in the prior taxable year.</text> </level> <level label="c"> <text>Subject to § 10–809.1 of this subtitle, subsection (b) of this section does not apply to a qualified return if:</text> <level label="1"> <text>the taxpayer has indicated on the qualified return that the taxpayer does not want the return filed by electronic means; or</text> </level> <level label="2"> <text>the income tax return preparer preparing the qualified return has requested and received a waiver from the Comptroller.</text> </level> </level> <level label="d"> <text>Subject to § 10–809.1 of this subtitle, on written request for a waiver by an income tax return preparer who is subject to subsection (b) of this section, the Comptroller may grant the income tax return preparer a waiver of the requirements of this section if the income tax return preparer is able to establish to the satisfaction of the Comptroller either reasonable cause for not filing the return by electronic means or that there is no feasible means of filing the return by electronic means without undue hardship.</text> </level> <level label="e"> <text>If the Comptroller prohibits an income tax return preparer from submitting income tax returns electronically, the Comptroller shall notify the State Board of Individual Tax Preparers established under Title 21 of the Business Occupations and Professions Article within 5 business days after taking that action.</text> </level> </section> <section article="gtg" article_name="Tax - General" number="10-825" title_number="10" title_name="Income Tax" subtitle_number="8" subtitle_name="Returns and Declarations"> <level label="a"> <text>In this section, “participating payee”, “reportable payment transaction”, and “third–party settlement organization” have the meanings stated in § 6050W of the Internal Revenue Code.</text> </level> <level label="b"> <text>Notwithstanding the filing threshold under § 6050W of the Internal Revenue Code, a third–party settlement organization shall report to the Comptroller and a participating payee required to file a return or declaration under Part II of this subtitle the gross amount of reportable payment transactions made to the participating payee if the amount of reportable payment transactions meets or exceeds the filing threshold under § 6041(a) of the Internal Revenue Code.</text> </level> <level label="c"> <text>The third–party settlement organization shall report the information required under subsection (b) of this section to the Comptroller and the participating payee at least 30 days before the federal filing deadlines for the information.</text> </level> </section> <section article="gtg" article_name="Tax - General" number="10-827" title_number="10" title_name="Income Tax" subtitle_number="8" subtitle_name="Returns and Declarations"> <text>Each person making payments not reported on a federal information return shall complete and file with the Comptroller an information return that reports annuities, dividends, interest, premiums, rent, or other income, including salary, wages, or other compensation for personal services that are not subject to the withholding tax under Subtitle 9 of this title.</text> </section> <section article="gtg" article_name="Tax - General" number="10-828" title_number="10" title_name="Income Tax" subtitle_number="8" subtitle_name="Returns and Declarations"> <text>Notwithstanding § 1-302 of the Financial Institutions Article, if the Comptroller requests, a person, including a financial institution, who files a federal information return shall verify or report the items reported in a federal information return.</text> </section> <section article="gtg" article_name="Tax - General" number="10-829" title_number="10" title_name="Income Tax" subtitle_number="8" subtitle_name="Returns and Declarations"> <text>A person who pays salary, wages, or other compensation for personal services for which income tax is not withheld shall give the payee 2 copies of the information return required by § 10-827 of this subtitle.</text> </section> <section article="gtg" article_name="Tax - General" number="10-830" title_number="10" title_name="Income Tax" subtitle_number="8" subtitle_name="Returns and Declarations"> <text>Any real estate reporting person who is required to file a return under § 6045 of the Internal Revenue Code shall file a copy of that return with the Comptroller if:</text> <level label="1"> <text>the vendor is a nonresident; and</text> </level> <level label="2"> <text>the real property sold is located in this State.</text> </level> </section> <section article="gtg" article_name="Tax - General" number="10-901" title_number="10" title_name="Income Tax" subtitle_number="9" subtitle_name="Tax Payment"> <level label="a"> <text>Except as otherwise provided in this subtitle, an individual, a partnership, or a corporation that has Maryland taxable income in a taxable year shall pay the income tax on that income with the return that covers that year.</text> </level> <level label="b"> <text>Except as provided in § 10-820(a)(3) of this title, if an individual files a Maryland income tax return electronically no later than April 15 of the next taxable year, the income tax due with the return may be paid on or before April 30 of the next taxable year if the income tax is paid electronically.</text> </level> </section> <section article="gtg" article_name="Tax - General" number="10-902" title_number="10" title_name="Income Tax" subtitle_number="9" subtitle_name="Tax Payment"> <level label="a"> <text>Except as otherwise provided in this section, each individual, partnership, or corporation required to file quarterly estimated income tax returns shall pay:</text> <level label="1"> <text>at least 25% of the estimated income tax shown on the declaration or amended declaration for a taxable year:</text> <level label="i"> <text>with the declaration or amended declaration that covers that year; and</text> </level> <level label="ii"> <text>with each quarterly return for that year; and</text> </level> </level> <level label="2"> <text>any unpaid income tax for the year shown on the income tax return that covers that year, with the return.</text> </level> </level> <level label="b"> <text>If an individual under subsection (a) of this section files a final income tax return on or before January 31 of a taxable year, as allowed under § 10-820(b)(3) of this title instead of paying 25% of the estimated income tax shown on the declaration or amended declaration for that year with the estimated tax return on January 15, the individual shall pay in full the unpaid income tax for that year with the final return.</text> </level> <level label="c"> <text>If an individual with estimated income from fishing or farming files the declaration or the return on the dates allowed under § 10-820(c) of this title, the individual shall pay in full the income tax shown on the return for that taxable year on or before March 1 of the next year.</text> </level> <level label="d"> <text>An individual who receives income from wagering not subject to withholding under § 10-906 of this subtitle shall pay in full the income tax on that income with the estimated tax return that covers the period in which the individual receives that income.</text> </level> <level label="e"> <level label="1"> <text>Subject to paragraph (2) of this subsection, a fiduciary may use the annualization method as allowed for federal income tax purposes under § 6654(d)(2)(B) of the Internal Revenue Code to determine the amount of estimated tax required to be paid.</text> </level> <level label="2"> <text>For purposes of this subsection, § 6654(d)(2)(B)(i) of the Internal Revenue Code shall be applied by in each instance substituting “ending before the date one month before the due date for the installment” for “ending before the due date for the installment”.</text> </level> </level> </section> <section article="gtg" article_name="Tax - General" number="10-905" title_number="10" title_name="Income Tax" subtitle_number="9" subtitle_name="Tax Payment"> <level label="a"> <text>In this Part II of this subtitle the following words have the meanings indicated.</text> </level> <level label="a–1"> <text>“Annuity, sick pay, or retirement distribution” means:</text> <level label="1"> <text>an annuity or sick pay payment described in § 3402(o) of the Internal Revenue Code; or</text> </level> <level label="2"> <text>a designated distribution as defined in § 3405(e) of the Internal Revenue Code other than an eligible rollover distribution within the meaning of § 3405(c) of the Internal Revenue Code.</text> </level> </level> <level label="b"> <level label="1"> <text>“Employer” has the meaning stated in § 3401 of the Internal Revenue Code.</text> </level> <level label="2"> <text>“Employer” includes:</text> <level label="i"> <text>the federal government;</text> </level> <level label="ii"> <text>the State;</text> </level> <level label="iii"> <text>a county, municipal corporation, political subdivision, or instrumentality of the State;</text> </level> <level label="iv"> <text>another state to the extent that functions of its government are carried on or performed in this State; and</text> </level> <level label="v"> <text>if the employer is a corporation:</text> <level label="1"> <text>any officer of the corporation who exercises direct control over its fiscal management; and</text> </level> <level label="2"> <text>any agent of the corporation who has a duty to withhold income tax from wages.</text> </level> </level> </level> </level> <level label="c"> <text>“Payment subject to withholding” means:</text> <level label="1"> <text>an annuity, sick pay, or retirement distribution;</text> </level> <level label="2"> <text>income that is subject to the income tax and is distributed by a fiduciary to a nonresident alien;</text> </level> <level label="3"> <text>a payment of winnings derived from wagering in the State if the payment is subject to withholding under § 3402 of the Internal Revenue Code; and</text> </level> <level label="4"> <text>a payment of a death benefit by the Board of Trustees of the State Retirement and Pension System.</text> </level> </level> <level label="d"> <level label="1"> <text>“Payor” means a person responsible to make a payment subject to withholding.</text> </level> <level label="2"> <text>“Payor” includes:</text> <level label="i"> <text>the federal government;</text> </level> <level label="ii"> <text>the State;</text> </level> <level label="iii"> <text>a county, municipal corporation, political subdivision, or instrumentality of the State;</text> </level> <level label="iv"> <text>another state to the extent that functions of its government are carried on or performed in this State; and</text> </level> <level label="v"> <text>if the payor is a corporation:</text> <level label="1"> <text>any officer of the corporation who exercises direct control over its fiscal management; and</text> </level> <level label="2"> <text>any agent of the corporation who has a duty to withhold income tax from payments subject to withholding.</text> </level> </level> </level> </level> <level label="e"> <text>“Wagering” includes:</text> <level label="1"> <text>any lottery, including the State lottery; and</text> </level> <level label="2"> <text>any pari–mutuel wagering, including any pari–mutuel wagering conducted under Title 11 of the Business Regulation Article.</text> </level> </level> <level label="f"> <level label="1"> <text>Except as provided in paragraph (2) of this subsection, “wages” means salary, wages, or compensation for personal services of any kind as defined in §§ 3401 and 3402(o)(2)(A) of the Internal Revenue Code.</text> </level> <level label="2"> <text>“Wages” includes remuneration paid for services described in § 3401(a)(5) and (6) of the Internal Revenue Code.</text> </level> </level> <level label="g"> <text>“Withhold” includes deducting income tax.</text> </level> </section> <section article="gtg" article_name="Tax - General" number="10-906" future_version_removed="true" title_number="10" title_name="Income Tax" subtitle_number="9" subtitle_name="Tax Payment"> <level label="a"> <text>Except as provided in § 10–907 of this subtitle, each employer or payor shall:</text> <level label="1"> <text>withhold the income tax required to be withheld under § 10–908 of this subtitle; and</text> </level> <level label="2"> <text>pay to the Comptroller the income tax withheld for a period with the withholding return that covers the period.</text> </level> </level> <level label="b"> <text>Any income tax withheld is deemed to be held in trust for the State by the employer or payor who withholds the tax.</text> </level> <level label="c"> <text>An employer or payor who withholds income tax shall keep a separate ledger account for withholdings that indicates clearly:</text> <level label="1"> <text>the amount of income tax withheld; and</text> </level> <level label="2"> <text>that the income tax withheld is the property of the State.</text> </level> </level> <level label="d"> <text>If an employer or payor negligently fails to withhold or to pay income tax in accordance with subsection (a) of this section, personal liability for that income tax extends:</text> <level label="1"> <text>to the employer or payor;</text> </level> <level label="2"> <text>if the employer or payor is a corporation, to:</text> <level label="i"> <text>any officer of the corporation who exercises direct control over its fiscal management; or</text> </level> <level label="ii"> <text>any agent of the corporation who is required to withhold and pay the income tax; and</text> </level> </level> <level label="3"> <text>if the employer or payor is a limited liability company as defined under Title 4A of the Corporations and Associations Article or a limited liability partnership as defined under Title 9A of the Corporations and Associations Article, including a limited partnership registered as a limited liability limited partnership, to:</text> <level label="i"> <text>any person who exercises direct control over its fiscal management; and</text> </level> <level label="ii"> <text>any agent of the limited liability company or limited liability partnership who is required to withhold and pay the income tax.</text> </level> </level> </level> </section> <section article="gtg" article_name="Tax - General" number="10-907" title_number="10" title_name="Income Tax" subtitle_number="9" subtitle_name="Tax Payment"> <level label="a"> <text>Income tax is not required to be withheld at the time wages are paid to a nonresident:</text> <level label="1"> <text>for State income tax withholding purposes, if the Comptroller and the state in which the nonresident resides have agreed in writing to allow a reciprocal exemption from tax and withholding for the wages of residents of each state that are earned in the other state;</text> </level> <level label="2"> <text>for county income tax withholding purposes, if:</text> <level label="i"> <text>the nonresident derives wages from employment in a county; and</text> </level> <level label="ii"> <text>the Comptroller determines that each locality in which the nonresident resides:</text> <level label="1"> <text>imposes no tax on the income of a Maryland resident from wages from employment in that locality;</text> </level> <level label="2"> <text>exempts that income from its tax on income; or</text> </level> <level label="3"> <text>allows a credit for that income and exempts that income from the withholding requirement for its tax on income;</text> </level> </level> </level> <level label="3"> <text>for tips, to the extent that the amount required to be withheld on the tips causes the total withholdings for the period to exceed the available net wages other than tips after deductions are made for:</text> <level label="i"> <text>the federal income and Social Security taxes and income tax required to be withheld on wages other than tips; and</text> </level> <level label="ii"> <text>the federal income and Social Security taxes required to be withheld on the tips; or</text> </level> </level> <level label="4"> <text>if the wages are paid to an individual rendering police, fire, rescue, or emergency services in an area covered under a state of emergency declared by the Governor under § 14–107 of the Public Safety Article by:</text> <level label="i"> <text>a nonprofit organization not registered to do business in the State and not otherwise doing business in the State; or</text> </level> <level label="ii"> <text>a state, county, or political subdivision of a state, other than the State of Maryland.</text> </level> </level> </level> <level label="b"> <text>Unless the payee specifically asks that income tax be withheld from an annuity, sick pay, or retirement distribution, income tax is not required to be withheld from that payment.</text> </level> <level label="c"> <text>Income tax is not required to be withheld on that portion of a death benefit to be excluded from federal adjusted gross income, including amounts to be transferred by the beneficiary or the Board of Trustees of the State Retirement and Pension System to an eligible retirement plan as defined in § 402(c)(8)(B) of the Internal Revenue Code in a nontaxable rollover. The State Retirement Agency is authorized to obtain such representation as it deems necessary to determine if the beneficiary will make a nontaxable rollover.</text> </level> </section> <section article="gtg" article_name="Tax - General" number="10-908" title_number="10" title_name="Income Tax" subtitle_number="9" subtitle_name="Tax Payment"> <level label="a"> <text>An employer shall withhold from the wages of an individual the amount indicated in the income tax withholding tables or income tax percentage withholding schedules that the Comptroller prepares.</text> </level> <level label="b"> <text>A payor that is a fiduciary shall withhold from each distribution the amount indicated in the income tax withholding tables or income tax percentage withholding schedules that the Comptroller prepares.</text> </level> <level label="c"> <text>A payor shall withhold the amount from an annuity, sick pay, or retirement distribution that the payee requests.</text> </level> <level label="d"> <text>A payor shall withhold from a payment subject to withholding of winnings derived from wagering:</text> <level label="1"> <text>if the payee is a resident, a rate equal to the sum of 3.0% and the top marginal State income tax rate for individuals under § 10-105(a) of this title, applied to the payment; and</text> </level> <level label="2"> <text>if the payee is a nonresident, a rate equal to the sum of the rate of the tax imposed under § 10-106.1 of this title and the top marginal State income tax rate for individuals under § 10-105(a) of this title, applied to the payment.</text> </level> </level> <level label="e"> <text>The Board of Trustees of the State Retirement and Pension System shall withhold from a payment of a death benefit to a resident payee the sum of:</text> <level label="1"> <level label="4"> <text>75% of the payment; and</text> </level> </level> <level label="2"> <text>the county income tax rate applied to the payment.</text> </level> </level> <level label="f"> <text>If a payment to a resident payee is a designated distribution that is an eligible rollover distribution within the meaning of § 3405(c) of the Internal Revenue Code and the payment is subject to mandatory withholding of federal income tax, the payor shall withhold from the payment an amount equal to 7.75% of the payment.</text> </level> </section> <section article="gtg" article_name="Tax - General" number="10-909" title_number="10" title_name="Income Tax" subtitle_number="9" subtitle_name="Tax Payment"> <text>The income tax required to be withheld under § 10–908 of this subtitle shall be withheld:</text> <level label="1"> <text>by a payor other than a fiduciary or S corporation and by an employer:</text> <level label="i"> <text>on the basis of each weekly, 2–week, semimonthly, or monthly regular period of payment; or</text> </level> <level label="ii"> <text>if there is no regular period of payment as specified in item (i) of this item, on a daily basis; and</text> </level> </level> <level label="2"> <text>by a payor who is a fiduciary, on a quarterly basis.</text> </level> </section> <section article="gtg" article_name="Tax - General" number="10-910" title_number="10" title_name="Income Tax" subtitle_number="9" subtitle_name="Tax Payment"> <level label="a"> <text>At the time of employment, an employee shall sign and file with the employer an exemption certificate that states the number of exemptions to which the employee is entitled under this title.</text> </level> <level label="b"> <level label="1"> <text>Except as provided in paragraph (2) of this subsection, an employer shall base withholding for an employee:</text> <level label="i"> <text>on the number of exemptions stated in the exemption certificate that the employee files; or</text> </level> <level label="ii"> <text>if the employee fails to file an exemption certificate or files an invalid certificate under subsection (c) of this section, on 1 exemption.</text> </level> </level> <level label="2"> <text>If the Comptroller notifies an employer that an employee has an unpaid tax liability, that the employee failed to file a required Maryland income tax return, or that an employee is subject to a tax refund interception request, the employer shall base withholding for the employee:</text> <level label="i"> <text>on a number of exemptions not exceeding the actual number of exemptions allowed on the employee’s prior year’s income tax return, as specified by the Comptroller; or</text> </level> <level label="ii"> <text>if the employee failed to file a required Maryland income tax return, on 1 exemption.</text> </level> </level> </level> <level label="c"> <level label="1"> <text>An exemption certificate is invalid if it:</text> <level label="i"> <text>does not contain the information required; or</text> </level> <level label="ii"> <text>contains false or fraudulent information.</text> </level> </level> <level label="2"> <text>An exemption certificate is not invalid if it states:</text> <level label="i"> <text>a number of exemptions that is less than the number of exemptions to which the individual is entitled under § 10–211 of this title; or</text> </level> <level label="ii"> <text>a number of additional exemptions less than or equal to the fraction, rounded down to the nearest whole number:</text> <level label="1"> <text>the numerator of which equals the excess of the total of estimated itemized deductions, alimony payments, allowable child care expenses, qualified retirement contributions, business losses, and employer business expenses over the standard deduction allowance; and</text> </level> <level label="2"> <text>the denominator of which equals the amount allowed for each exemption under § 10–211(b)(1) of this title for the applicable taxable year.</text> </level> </level> </level> </level> <level label="d"> <text>A person who is entitled to receive a payment subject to withholding of winnings derived from wagering shall complete, under oath, and give to the payor a withholding certificate that contains the name, address, state of residence, and taxpayer identification number of:</text> <level label="1"> <text>the person who is to receive the payment; and</text> </level> <level label="2"> <text>each person entitled to any portion of the payment.</text> </level> </level> </section> <section article="gtg" article_name="Tax - General" number="10-911" title_number="10" title_name="Income Tax" subtitle_number="9" subtitle_name="Tax Payment"> <level label="a"> <text>Each employer or payor required under § 10–906 of this subtitle to withhold income tax for an employee or a person who receives a payment subject to withholding shall prepare a statement that shows for the previous calendar year:</text> <level label="1"> <text>the name of the employer or payor;</text> </level> <level label="2"> <text>the name of the employee or person who receives the payment subject to withholding;</text> </level> <level label="3"> <text>the total amount that the employer paid to the employee as wages or the total amount that the payor has paid to the person;</text> </level> <level label="4"> <text>the total amount of tips that the employee reported;</text> </level> <level label="5"> <text>the total amount of income tax that has been withheld under this subtitle;</text> </level> <level label="6"> <text>any amount by which income tax required to be withheld on tips exceeds the other net wages paid to the employee; and</text> </level> <level label="7"> <text>any other information that the Comptroller requires by regulation.</text> </level> </level> <level label="b"> <text>On or before January 31 of each year an employer or payor of a payment subject to withholding shall:</text> <level label="1"> <text>provide 2 copies of the statement required under subsection (a) of this section to the employee or person who receives a payment subject to withholding; and</text> </level> <level label="2"> <text>submit 1 copy of the statement to the Comptroller.</text> </level> </level> <level label="c"> <level label="1"> <text>Except as provided in paragraph (2) of this subsection, an employer or payor shall submit statements required under subsection (a) of this section in an electronic format that the Comptroller requires by regulation.</text> </level> <level label="2"> <text>The Comptroller:</text> <level label="i"> <text>shall adopt regulations to provide a process for an employer or payor that is required to submit statements in an electronic format under paragraph (1) of this subsection to request a waiver from the requirement; and</text> </level> <level label="ii"> <text>may waive the requirement that an employer or payor submit statements in an electronic format under paragraph (1) of this subsection if the Comptroller determines that the requirement will result in undue hardship to the employer or payor.</text> </level> </level> </level> </section> <section article="gtg" article_name="Tax - General" number="10-912" title_number="10" title_name="Income Tax" subtitle_number="9" subtitle_name="Tax Payment"> <level label="a"> <level label="1"> <text>In this section the following words have the meanings indicated.</text> </level> <level label="2"> <level label="i"> <text>Except as provided in subparagraph (ii) of this paragraph, “net proceeds” means the total sales price paid to the transferor less:</text> <level label="1"> <text>debts of the transferor secured by a mortgage or other lien on the property being transferred that are being paid upon the sale or exchange of the property; and</text> </level> <level label="2"> <text>other expenses of the transferor arising out of the sale or exchange of the property and disclosed on a settlement statement prepared in connection with the sale or exchange of the property, not including adjustments in favor of the transferee.</text> </level> </level> <level label="ii"> <text>“Net proceeds” does not include adjustments in favor of the transferor that are disclosed on a settlement statement prepared in connection with the sale or exchange of the property.</text> </level> </level> <level label="3"> <text>“Nonresident entity” means an entity that:</text> <level label="i"> <text>is not formed under the laws of the State; and</text> </level> <level label="ii"> <text>is not qualified by or registered with the Department of Assessments and Taxation to do business in the State.</text> </level> </level> <level label="4"> <text>“Resident entity” means an entity that:</text> <level label="i"> <text>is formed under the laws of the State; or</text> </level> <level label="ii"> <text>is formed under the laws of another state and is qualified by or registered with the Department of Assessments and Taxation to do business in the State.</text> </level> </level> <level label="5"> <text>“Total payment” means the net proceeds of a sale actually paid to a transferor, including the fair market value of any property transferred to the transferor.</text> </level> <level label="6"> <text>“Transfer pursuant to a deed in lieu of foreclosure” includes:</text> <level label="i"> <text>a transfer by the owner of the property to:</text> <level label="1"> <text>with respect to a deed in lieu of foreclosure of a mortgage, the mortgagee, the assignee of the mortgage, or any designee or nominee of the mortgagee or assignee of the mortgage;</text> </level> <level label="2"> <text>with respect to a deed in lieu of foreclosure of a deed of trust, the holder of the debt or other obligation secured by the deed of trust or any designee, nominee, or assignee of the holder of the debt or other obligation secured by the deed of trust; and</text> </level> <level label="3"> <text>with respect to a deed in lieu of foreclosure of any other lien instrument, the holder of the debt or other obligation secured by the lien instrument or any designee, nominee, or assignee of the holder of the debt secured by the lien instrument; and</text> </level> </level> <level label="ii"> <text>a transfer by any of the persons described in item (i) of this paragraph to a subsequent purchaser for value.</text> </level> </level> <level label="7"> <text>“Transfer pursuant to a foreclosure of a mortgage, deed of trust, or other lien instrument” includes:</text> <level label="i"> <text>with respect to the foreclosure of a mortgage:</text> <level label="1"> <text>a transfer by the mortgagee, the assignee of the mortgage, the attorney named in the mortgage, or the attorney or trustee conducting a foreclosure sale pursuant to the mortgage to:</text> </level> <level label="A"> <text>the mortgagee or the assignee of the mortgage;</text> </level> <level label="B"> <text>any designee, nominee, or assignee of the mortgagee or assignee of the mortgage; or</text> </level> <level label="C"> <text>any purchaser, substituted purchaser, or assignee of any purchaser or substituted purchaser of the foreclosed property; and</text> </level> <level label="2"> <text>a transfer by any of the persons described in item 1 of this item to a subsequent purchaser for value;</text> </level> </level> <level label="ii"> <text>with respect to the foreclosure of a deed of trust:</text> <level label="1"> <text>a transfer by the trustees, successor trustees, substituted trustees under the deed of trust, or trustees conducting a foreclosure sale pursuant to the deed of trust to:</text> </level> <level label="A"> <text>the holder of the debt or other obligation secured by the deed of trust;</text> </level> <level label="B"> <text>any designee, nominee, or assignee of the holder of the debt secured by the deed of trust; or</text> </level> <level label="C"> <text>any purchaser, substituted purchaser, or assignee of any purchaser or substituted purchaser of the foreclosed property; and</text> </level> <level label="2"> <text>a transfer by any of the persons described in item 1 of this item to a subsequent purchaser for value; and</text> </level> </level> <level label="iii"> <text>with respect to the foreclosure of any other lien instrument:</text> <level label="1"> <text>a transfer by the party authorized to make the sale to:</text> </level> <level label="A"> <text>the holder of the debt or other obligation secured by the lien instrument;</text> </level> <level label="B"> <text>any designee, nominee, or assignee of the holder of the debt secured by the lien instrument; or</text> </level> <level label="C"> <text>any purchaser, substituted purchaser, or assignee of any purchaser or substituted purchaser of the foreclosed property; and</text> </level> <level label="2"> <text>a transfer by any of the persons described in item 1 of this item to a subsequent purchaser for value.</text> </level> </level> </level> </level> <level label="b"> <level label="1"> <text>For every deed or other instrument of writing that effects a change of ownership on the assessment books under the Tax – Property Article and for which a payment is required under subsection (c) of this section, the total payment shall be described on the form that the Comptroller specifies by regulation.</text> </level> <level label="2"> <text>The form required under paragraph (1) of this subsection shall be signed under oath by:</text> <level label="i"> <text>the transferor of the property;</text> </level> <level label="ii"> <text>an agent of the transferor; or</text> </level> <level label="iii"> <text>the real property reporting person, as defined under § 6045 of the Internal Revenue Code.</text> </level> </level> </level> <level label="c"> <text>Except as otherwise provided in this section, in a sale or exchange of real property and associated tangible personal property owned by a nonresident or nonresident entity, the deed or other instrument of writing that effects a change of ownership on the assessment books under the Tax – Property Article may not be recorded with the clerk of the circuit court for a county or filed with the Department of Assessments and Taxation unless payment is made to the clerk of the circuit court for a county or the Department of Assessments and Taxation in an amount equal to:</text> <level label="1"> <text>the sum of the rate of the tax imposed under § 10–106.1 of this title and the top marginal State income tax rate for individuals under § 10–105(a) of this title, applied to the total payment to a nonresident; or</text> </level> <level label="2"> <text>the rate of the tax for a corporation under § 10–105(b) of this title of the total payment to a nonresident entity.</text> </level> </level> <level label="d"> <text>Subsection (c) of this section does not apply when:</text> <level label="1"> <text>a certification under penalties of perjury that the transferor is a resident of the State or is a resident entity is provided by each transferor in:</text> <level label="i"> <text>the recitals or the acknowledgment of the deed or other instrument of writing transferring the property to the transferee; or</text> </level> <level label="ii"> <text>an affidavit signed by the transferor or by an agent of the transferor that accompanies and is recorded with the deed or other instrument of writing transferring the property;</text> </level> </level> <level label="2"> <text>the transferor presents to the clerk of the circuit court for a county or the Department of Assessments and Taxation a certificate issued by the Comptroller stating that:</text> <level label="i"> <text>no tax is due from that transferor in connection with that sale or exchange of property;</text> </level> <level label="ii"> <text>a reduced amount of tax is due from that transferor in connection with that sale or exchange of property and stating the reduced amount that should be collected by the clerk of the circuit court for a county or the Department of Assessments and Taxation before recordation or filing; or</text> </level> <level label="iii"> <text>the transferor has satisfied the transferor’s tax liability described in subsection (c) of this section or has provided adequate security to cover such liability;</text> </level> </level> <level label="3"> <text>the property transfer is:</text> <level label="i"> <text>a transfer pursuant to a foreclosure of a mortgage, deed of trust, or other lien instrument; or</text> </level> <level label="ii"> <text>a transfer pursuant to a deed in lieu of foreclosure;</text> </level> </level> <level label="4"> <text>the property is transferred by the United States, the State, or a unit or political subdivision of the State;</text> </level> <level label="5"> <text>a certification under penalties of perjury that the property being transferred is the transferor’s principal residence is provided by each transferor in:</text> <level label="i"> <text>the recitals or the acknowledgment of the deed or other instrument of writing transferring the property to the transferee; or</text> </level> <level label="ii"> <text>an affidavit signed by the transferor or by an agent of the transferor that accompanies and is recorded with the deed or other instrument of writing transferring the property; or</text> </level> </level> <level label="6"> <text>the property is transferred pursuant to a deed or other instrument of writing that includes a statement of consideration required by § 12–104 of the Tax – Property Article indicating that the consideration payable is zero.</text> </level> </level> <level label="e"> <level label="1"> <text>Except as provided in this section, the amounts described in subsection (c) of this section shall be collected by the clerk of the circuit court for a county or the Department of Assessments and Taxation when the deed or other instrument of writing is presented for recordation or filing.</text> </level> <level label="2"> <text>Within 30 business days after the date the amount payable under subsection (c) of this section is paid, the clerk of the circuit court for the county or the Department of Assessments and Taxation shall pay over to the Comptroller the amount collected under subsection (c) of this section as prescribed by the Comptroller.</text> </level> </level> <level label="f"> <level label="1"> <text>Amounts collected under subsection (c) of this section and paid over to the Comptroller under subsection (e) of this section shall be deemed to have been paid to the Comptroller on behalf of the transferor from whom the amounts were withheld.</text> </level> <level label="2"> <text>The transferor shall be credited with having paid the amounts for the taxable year in which the transaction that is the subject of the tax occurred.</text> </level> </level> <level label="g"> <text>The transferee, title insurance producer, title insurer, settlement agent, closing attorney, lending institution, and real estate agent or broker in any transaction subject to this section are not liable for any amounts required to be collected and paid over to the Comptroller under this section.</text> </level> <level label="h"> <text>This section does not:</text> <level label="1"> <text>impose any tax on a transferor or affect any liability of the transferor for any tax; or</text> </level> <level label="2"> <text>prohibit the Comptroller from collecting any taxes due from a transferor in any other manner authorized by law.</text> </level> </level> <level label="i"> <level label="1"> <text>The Comptroller shall adopt regulations to administer this section.</text> </level> <level label="2"> <text>The Comptroller’s regulations shall establish procedures for the issuance of the certificate referred to in subsection (d)(2) of this section.</text> </level> <level label="3"> <text>The Comptroller’s regulations shall establish a procedure by which a transferor may apply for an early refund of the tax collected under this section if the transferor establishes that no tax will be owed or less tax than collected will be owed.</text> </level> </level> </section> <section article="gtg" article_name="Tax - General" number="10-913" title_number="10" title_name="Income Tax" subtitle_number="9" subtitle_name="Tax Payment"> <level label="a"> <level label="1"> <text>On or before January 1 of each calendar year, the Comptroller shall publish the maximum income eligibility for the earned income tax credit under § 10–704 of this title for the calendar year.</text> </level> <level label="2"> <text>The Comptroller shall prepare a notice that meets the requirements of subsection (b) of this section and provide the notice, by mail or electronic means, to all employers in the State.</text> </level> </level> <level label="b"> <level label="1"> <text>On or before December 31 of each calendar year, an employer shall provide electronic or written notice to an employee who may be eligible for the earned income tax credit under § 10–704 of this title that:</text> <level label="i"> <text>the employee may be eligible for the federal earned income tax credit under § 32 of the Internal Revenue Code; and</text> </level> <level label="ii"> <text>the employee may be eligible for the earned income tax credit under § 10–704 of this title.</text> </level> </level> <level label="2"> <text>An employer may provide the notice required under this subsection to:</text> <level label="i"> <text>all employees; or</text> </level> <level label="ii"> <text>employees with wages that are less than or equal to the maximum income eligibility published under subsection (a) of this section.</text> </level> </level> </level> <level label="c"> <text>An employee may not pursue a private cause of action against an employer for the employer’s failure to provide the notice required under subsection (b) of this section.</text> </level> </section>