Subtractions, Additions, and Credits
- New Subtractions from Income - One subtraction modification has been updates and one new subtraction modification has been added for 2022.
- There are no new Additions to Income for 2022.
- New tax credits - Maryland has introduced two new tax credits for 2022.
House Bill 0837, Acts of 2022: This bill allows individuals and corporations to subtract the amount of ordinary and necessary expenses incurred during the tax year in carrying on a trade or business as a medical cannabis grower, processor, dispensary, or any other cannabis establishment licensed by the State from their federal adjusted gross income or federal taxable income.
House Bill 2/Senate Bill 0598, Acts of 2022: This bill creates a non-refundable credit against the State income tax for up to 50% of the federal Work Opportunity Tax Credit claimed by an employer with respect to a qualified individual who is employed in the State. Any unused amount of the credit cannot be carried forward to any other tax year. The existing subtraction for salary or wages paid for targeted jobs is reduced by the amount of the new credit claimed. This new credit can be applied as a credit toward employee withholding by organizations exempt from taxation under IRC 501(c).
House Bill 0641/Senate Bill 0597, Acts of 2022: This bill creates a refundable credit against the State income tax for 25% of qualified theatrical production costs incurred in the State. This credit is administered by the Department of Commerce. The maximum credit is $5 million in each fiscal year and $2 million for a single theatrical production.
House Bill 0478, Acts of 2022: This bill alters the Enterprise Zone program by -
- Terminating it effective January 1, 2030
- Altering the authority of the Secretary of Commerce to designate areas as enterprise zones
- Altering the definition of "focus area employee" and "qualified employee" for the income tax credit
- Altering certain eligibility and reporting requirements
Senate Bill 0093, Acts of 2022: This bill increased the tax credit available to employers for wages paid to qualified employees with a disability and childcare provided or paid for by a business entity for the children of a qualified employee with a disability. Employers are allowed a credit of 30% of up to the first $15,000 of wages paid during each of the first two years of employment. This includes employees employed for less than 1 year because the employee terminates employment with the employer to take another job. A business entity can take a credit of up to $1,500 of qualified childcare or transportation expenses incurred for each of the first two years of employment.