The act will cut retirement taxes by eliminating all state tax on the first $50,000 of income for retirees making up to $100,000 in federally adjusted gross income. Retirees with Maryland income will pay no state tax up to $50k. This is purported to be the largest tax reduction for Maryland residents in two decades. The tax reductions are scheduled to be phased in over five years, beginning this year.
In addition, Governor Hogan will be introducing the Hometown Heroes Act to exempt retired law enforcement, fire, rescue, corrections, and emergency response workers from state tax on all retirement income specific to the profession. In 2017, the Governor exempted the first $15,000 of these employees’ income. He will push to exempt income on these professions and lower the age of eligibility from 55 to 50 years.
Specifically, this bipartisan tax relief agreement includes the following provisions for FY23-FY27:
- Tax Relief for Retirees 65 and older making up to $100,000 in retirement income, and married couples making up to $150,000 in retirement income. As a result, 80% of Maryland’s retirees will receive substantial relief or pay no state income taxes at all. ($1.55 billion)
- The Work Opportunity Tax Credit incentivizes employers and businesses to hire and retain workers from underserved communities that have faced significant barriers to employment. ($195 million)
- Family Budget Boosters: sales tax exemptions for childcare products such as diapers, car seats, baby bottles and critical health products such as dental hygiene products, diabetic care products and medical devices. ($115.6 million)
Signing ceremony later this week!
ABOUT STEVE SHANE
Steve Shane provides strategic counseling to clients in need of estate administration, charitable giving and business continuity planning while minimizing estate, gift, and generation-skipping transfer tax exposure. He offers legal guidance to clients on asset protection and the proper disposition of assets in accordance with the client’s objectives, while employing tax planning techniques such as the use of irrevocable trusts, life insurance planning, lifetime gifts, and a charitable trust. He is also experienced with drafting documents for business planning, the incorporation, and application for exemption for Private Foundations and the administration of decedents’ estates.
ABOUT OFFIT KURMAN
Offit Kurman, one of the fastest-growing, full-service law firms in the United States, serves dynamic businesses, individuals and families. With 17 offices and nearly 250 lawyers who counsel clients across more than 30 areas of practice, Offit Kurman helps maximize and protect business value and personal wealth by providing innovative and entrepreneurial counsel that focuses on clients’ business objectives, interests and goals. The firm is distinguished by the quality, breadth and global reach of its legal services and a unique operational structure that encourages a culture of collaboration. For more information, visit www.offitkurman.com.
DELAWARE | MARYLAND | NEW JERSEY | NEW YORK | NORTH CAROLINA | PENNSYLVANIA |SOUTH CAROLINA | VIRGINIA | WASHINGTON, DC
Author: Steve Shane, Esq.
Articles have been Reprinted with permission from the charlotte observer and Mike Hunter.
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