Maryland allows the following subtractions from income to calculate the Maryland Adjusted Gross Income on the return:
Federally Taxed Social Security and Railroad Retirement Benefits:
If Social Security, Tier I, Tier II, and/or supplemental railroad retirement benefits are included in your federal adjusted gross income, then you must include the total amount of these benefits here. These benefits, Social Security and Railroad Retirement, are exempt from state tax.
If taxpayer is age 65 or over, or totally disabled, or their spouse was totally disabled, on the final day of the taxable year, AND you added a pension, annuity, or endowment from an "employee retirement system", on your federal return taxable income, you may be eligible to subtract some of your taxable pension and retirement annuity income on your Maryland return. The exclusion is applicable to both taxpayers. The maximum allowable pension exclusion is $36,200.
Two Income Subtraction:
If you file a joint return and both spouses have income subject to Maryland tax, you may deduct up to $1,200.
If you began or ended Maryland residency during the tax year, you may subtract the income that was earned outside of Maryland while a nonresident.
Military Retirement Income Subtraction:
Individuals under age 55 may subtract up to $12,000 of military retirement income including death benefits received by a qualified individual during the tax year. Individuals age 55 or older may subtract up to $20,000 of military retirement income including death benefits. To qualify you must be a member of an active or reserve component of the armed forces or the member's surviving spouse or ex spouse.
Pension Exclusion for Retired Law Enforcement Officers, and Correctional Officers, or Fire, Rescue, or Emergency Services Personnel:
The pension exclusion has been broadened to include retirement income of Retired Law Enforcement Officers and Correctional Officers, or Rescue, Emergency, and Fire Services personnel.
Up to a $15,000 subtraction for resident retired law enforcement officers, fire, rescue and emergency personnel who are at least 55 years old (but not more than 65 or totally disabled) and
- were employed by the State, a political subdivision of the State, or the federal government, and
- receive pension income related to that employment.
An individual may not claim both this subtraction and the standard pension exclusion.
Child Care Expenses:
You may subtract the cost of child care for your dependents while you work. There is a $3,000 limitation and $6,000 if you have two or more dependents that receive child care.
Law Enforcement Officers:
Up to $5,000 of income earned by a law enforcement officer residing in the Maryland political subdivision in which the officer is employed if the crime rate in that political subdivision exceeds the State’s crime rate. **Law enforcement officer means an individual who in an official capacity is authorized by law to make arrests, and is a member of a Maryland law enforcement agency, including an officer who serves in a probationary status or at the pleasure of the appointing authority of a county or municipal corporation. Federal law enforcement officers do not qualify.
Volunteer Fire, Rescue and Emergency Medical Services Personnel:
Up to $7,000 for each tax payer who is a qualifying volunteer as certified by a Maryland fire, rescue or emergency medical services organization. $7,000 for each taxpayer who is a qualifying member of the U.S. Coast Guard Auxiliary, Maryland Defense Force or Maryland Civil Air Patrol as certified by these organizations. Attach a copy of the certification
Under the Racing and Community Development Act of 2020, this bill allows a subtraction modification for the redevelopment of the following: Laurel Park in Anne Arundel County, Pimlico Race Course in Baltimore City and Bowie Race Course Training Center in Prince George’s County. The subtraction is
based on the gain recognized as a result of (direct or indirect) sale of property within the redevelopment sites and for income recognized (directly or indirectly) by the state investment in these sites.
Live Where You Work:
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.
Other Maryland Subtractions from Income:
You may qualify for other Maryland Subtractions as listed in the program and in the Maryland instruction booklet. These other subtractions may need additional supporting documents that require you to print, sign and mail your return to the state.
In some cases, the taxpayer will need to forward the signature document and requested certification forms, either by email to email@example.com or by mail to the P. O. Box at:
Revenue Administration Division,
Electronic Processing Section,
P O Box 2364,
Annapolis, MD 21404.
For additional information about other Subtractions from Income, see Maryland Resident Instructions.