The Retirement Tax Reduction Act of 2020 Will Cut Retirement Taxes for Marylanders By More Than $1 Billion Over Five Years. This legislation will eliminate 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 up to $50,000 will pay no state tax whatsoever in the state of Maryland. This legislation will provide tax relief to 230,000 Marylanders and is the largest tax reduction in Maryland in more than two decades. (SB 278)
A Recent Survey Found That Maryland Is The Worst State for Retirement, Ranking Near The Bottom in Affordability. “Maryland is this year’s worst state for retirement, according to Bankrate.com. The Old Line State is in the bottom 15 for affordability (fourth worst)…” (Kenneth Kiesnoski, “Here are the 5 best and 5 worst states for retirement,” CNBC, 7/10/19)
In 2014, Governor Hogan Campaigned On Working To Eliminate Taxes On The Retirement Income Of Marylanders. “Maryland Republican gubernatorial nominee Larry Hogan told residents of a large seniors community Tuesday that he would like to eliminate taxation of all retirement income once the state gets its fiscal house in order… ‘Once we get it under control, our plan — we can’t do it immediately — will be to completely eliminate state income taxes for pensions and retirement income,’ Hogan told the Charlestown residents.” (John Wagner, “Md. GOP Nominee Hogan Suggests Eliminating Taxes On All Retirement Income,” The Washington Post, 8/19/14)
The Hometown Heroes Act of 2020
Governor Hogan’s Proposed Legislation Will Exempt Retired Law Enforcement, Fire, Rescue, Correctional Officers, Or Emergency Response Personnel From State Tax On All Retirement Income Specific To Their Service As A First Responder Or Public Safety Employee. “Altering, from 55 years old to 50 years old, the age at which a resident is eligible for a subtraction modification under the Maryland income tax for retirement income attributable to certain employment; altering the amount of certain retirement income that may be included under a certain subtraction modification; applying the Act to taxable years beginning after December 31, 2019.” (SB 269)
- The Hometown Heroes Act of 2020 would provide Maryland retirees with $75.6 million in tax relief over the next five years. (Maryland Department Of Budget And Management)
This Is The Fifth Year That Governor Hogan Has Introduced Legislation To Eliminate State Taxes On The Retirement Income Of First Responders: 2015, 2017, 2018, 2019.
In 2017, Governor Hogan Enacted Hometown Heroes Legislation Precluding The First $15,000 Of Retirement Income For First Responders And Emergency Services Personnel From State Taxes.
In 2018, Governor Hogan pushed for and enacted legislation to expand this benefit to correctional officers.
While legislators push to raise taxes, Governor Hogan is proposing the largest tax reduction in Maryland in more than two decades. This afternoon, the Senate Budget and Taxation Committee will hold a hearing on SB 278, the Retirement Tax Reduction Act of 2020, and SB 269, the Hometown Heroes Act of 2020.
