Earned Income Tax Credit - Individuals Without Qualifying Children - Eligibility
Summary
HB 708 expands Maryland’s earned income tax credit (EITC) for individuals without qualifying children. Under current law, Maryland already allows a State income tax credit tied to the federal EITC, but this bill changes the calculation for childless workers by increasing the earned income amount and phase-out amount used to determine the State credit. It also removes the prior cap that limited the credit for this group in certain years, and it makes the credit fully refundable if it exceeds the taxpayer’s State income tax liability.
The bill further provides that, beginning with taxable years after December 31, 2024, the earned income amount and phase-out amount for childless filers will be adjusted annually for inflation using a cost-of-living adjustment determined by the Comptroller. The bill takes effect July 1, 2025, and applies to taxable years beginning after December 31, 2024. It does not change the federal EITC itself; rather, it changes how Maryland calculates the State credit for this specific category of taxpayers.
Impact
HB 708 amends § 10-704 of the Tax-General Article, which governs Maryland’s earned income tax credit. The practical effect is to broaden eligibility and increase the value of the State EITC for low- and moderate-income individuals without qualifying children, while also indexing the relevant income thresholds to inflation going forward. This will likely increase State income tax refunds or reduce tax liability for eligible childless workers, and may reduce State revenue to the extent more taxpayers qualify for larger credits. County EITC provisions are not directly changed, but the bill leaves intact the existing framework for county credits and refundable county credits.
Sentiment
The bill’s text and structure indicate a generally supportive policy approach toward expanding tax relief for working individuals without children, especially lower-income workers who have historically received smaller EITC benefits than families with qualifying children. No committee transcripts or recorded votes were provided, so there is no documented floor or committee debate to indicate opposition or amendments. Based on the bill’s purpose and design, the overall sentiment appears pro-tax relief and pro-work support.
Contention
The main policy issue likely to generate debate is fiscal impact: expanding and indexing the credit could reduce State revenues, and some lawmakers may question the cost relative to the benefit. Another possible point of contention is whether the State should prioritize childless workers in the EITC in the same way it supports families with children, since the bill effectively increases benefits for a group that has traditionally received a smaller credit. No specific objections, supporters, or negotiated compromises are reflected in the provided legislative history.