The following updates have been made to Maryland's tax code for tax year 2023.
Subtractions, Additions, and Credits
- New Subtractions from Income - One new subtraction to income and modifications to others.
- Up to $12,000 in expenses incurred by parent(s) to adopt a child with special needs through a public or nonprofit adoption agency and up to $10,000 in expenses incurred by
parent(s) to adopt a child without special needs. - Union dues paid that were included in your FAGI. Do not claim this subtraction if you are self-employed and you claimed these union dues as a business expense on your federal return. Retain all record of payments and make them available upon request to the comptroller's office.
- Up to $12,000 in expenses incurred by parent(s) to adopt a child with special needs through a public or nonprofit adoption agency and up to $10,000 in expenses incurred by
- New Addition Modification: Resident members of a pass-through entity that is taxed at the entity level in another state. This new addition modification is addition 't'
- New tax credits - There is one updated tax credit for qualified individuals.
- The credit for child and dependent care expenses is limited to Maryland residents only.
Legislature
- House Bill 547 / Senate Bill 552, Acts of 2023: This bill permanently extends the 2021 expansion of the refundable Maryland EITC to 45% of the federal EIC. This bill, The Family Prosperity Act of 2023 eliminates the limit for refundable EITC for individuals without qualifying children so they can claim 100% of the federal EITC as a refundable state income tax credit and permanently allows individuals with an ITIN to claim the EITC. In order to claim the Child Tax Credit, the maximum federal adjusted gross income is now $15,000 rather than $6,000.
- Senate Bill 243, Acts of 2023: This bill clarifies that the child and dependent care tax credit is available to residents only. ($3,000 or $6,000 if two or more dependents receive care.)
- House Bill 680, Acts of 2023: This existing tax credit was modified to extend the period allowed to use the credit for repayment of student loans from 2 years to 3 years. This bill also increased the total credit amount available.
- House Bill 346 / Senate Bill 312, Acts of 2023: This bill makes the $250,000 distribution from the states Unclaimed Property Fund by the comptroller to the tax clinics for low-income Marylanders fund (TCLIM) permanent beginning in fiscal year 2024.