Maryland has made the following changes to the tax laws for the 2018 tax year:
- Standard Deduction – The standard deduction for tax year 2018 has increased to a maximum amount of $2,250 for taxpayers filing single and to $4,500 for head of household fliers, married filing jointly fliers and a surviving spouse flier.
- Itemized Deduction Limitation - The State of Maryland follows the new Federal Tax and Jobs Act law to suspend the itemized deduction phase-out limitation also known as the Pease Limitation. Taxpayers are no longer required to reduce their itemized deductions using the itemized deduction worksheet as they have done in earlier years.
- Increased Pension Exclusion - Maryland's maximum pension exclusion, which is available to qualifying taxpayers who are age 65 or older; are permanently and totally disabled; or have a spouse who is permanently and totally disabled, increased from $29,900 to $30,600 for the 2018 tax year.
- Pension Exclusion for Qualifying Retired Correctional Officer, Law Enforcement Officer or Fire, Rescue, or Emergency Services Personnel – According to Maryland House Bill 296 of 2018 the pension exclusion for Retired Law Enforcement Officers or Fire, Rescue, or Emergency Services Personnel has broadened the qualifications to include retirement income of Correctional Officers.
- A subtraction of up to $15,000 for resident retired law enforcement officers, correctional officers, fire, rescue and emergency personnel who are at least 55 years old and
- were employed by the State, a political subdivision of the State, or the federal government, and
- receive pension income related to their employment.
- An individual may not claim both this subtraction and the standard pension exclusion.
Other Subtraction Modification Updates for Tax Year 2018:
- The mileage rate for certain qualifying charitable use of a car on Form 502V has increased from 53.5 cents to 54.5 cents.
- A new subtraction modification is available for any amount included in federal adjusted gross income for the first $50,000 of income received by an individual taxpayer during the taxable year in exchange for the sale of a continuous conservation easement on real property located in the State of Maryland. If filing a joint return each taxpayer is permitted to claim up to the maximum amount allowed.
- A new subtraction modification of up to $7,500 is available for living organ donors who incur qualified expenses resulting from the donation of that individual’s organs. “Organ” means all or part of an individual’s liver, kidney, pancreas, intestine, lung, or bone marrow. “Qualified expenses” means any unreimbursed travel or lodging expenses or lost wages. In the instance of a joint return each taxpayer is entitled to claim the maximum subtraction amount.
- A new subtraction modification is available for full-time Kindergarten through Grade 12 classroom teachers. Teachers may subtract up to $250 of unreimbursed expenses paid or incurred during the taxable year for the purchase of classroom supplies used by students in the classroom or by the teacher to prepare for or during classroom teaching. A teacher may not subtract any expense that has already been subtracted from federal adjusted gross income.