Income Tax – Individual Itemized Deductions – Alterations
HB0926 would change Maryland’s itemized deduction rules for individual income tax filers. Under current law, Maryland generally starts with federal itemized deductions and then makes certain required reductions. This bill would add a new reduction for taxable years beginning after December 31, 2024 and before January 1, 2030: taxpayers would have to reduce their Maryland itemized deductions by the lesser of their real property taxes paid or $10,000. The bill also preserves the existing rule that itemizers must reduce deductions for state and local income taxes paid, and it keeps the current income-based phase-down of itemized deductions for higher-income taxpayers.
The practical effect is to limit the Maryland itemized deduction benefit for homeowners and other taxpayers who pay significant property taxes, especially those with larger deductions that would otherwise flow through from federal itemizing. Because the bill applies only to individuals who itemize on their federal returns, it affects a narrower group of taxpayers than the standard deduction population. The bill would take effect July 1, 2026, and would amend Tax-General § 10-218, the state provision governing Maryland itemized deductions.
The available record shows the bill was introduced and assigned to the House Ways and Means Committee, with a hearing scheduled, but there are no recorded votes or committee transcripts in the provided materials. As a result, there is no documented floor or committee sentiment to gauge support or opposition from the legislative record included here.
On the merits, the main point of contention is likely to be the tax burden shift created by capping the deduction for real property taxes. Supporters would likely view the change as a revenue-raising measure or a way to narrow the benefit of itemized deductions, while opponents would likely argue it increases taxes on homeowners, particularly in higher-property-tax areas or for taxpayers with substantial housing costs. The bill does not change eligibility for itemizing itself, but it does reduce the value of itemizing for affected filers.
HB0926 would amend Maryland Tax-General § 10-218 to require an additional reduction to Maryland itemized deductions for certain taxpayers, specifically by disallowing up to $10,000 of real property taxes paid for taxable years beginning after December 31, 2024 and before January 1, 2030. It would affect individual income tax filers who itemize deductions on their federal returns and would leave in place the existing reduction for state and local income taxes and the income-based limitation on itemized deductions. The bill would take effect July 1, 2026, and would likely reduce the amount of itemized deductions claimed on Maryland returns for many homeowners and other property taxpayers.
Based on the materials provided, the bill appears to be in an early stage of the legislative process, with a hearing scheduled in the House Ways and Means Committee and no recorded votes or transcript excerpts showing debate. That means there is no formal evidence of bipartisan support or opposition in the record supplied. The bill’s structure suggests it may be viewed favorably by those seeking to limit deductions and raise revenue, but it may also draw concern from taxpayers and homeowner advocates because it reduces the value of property tax deductions.
The central policy dispute is over the new cap on the deduction for real property taxes. Supporters would likely argue that Maryland should limit itemized deductions and reduce the tax preference for property tax payments, especially for higher-income itemizers. Opponents would likely contend that the bill effectively raises taxes on homeowners, particularly in jurisdictions with high property tax bills, and that it could disproportionately affect middle- and upper-middle-income filers who itemize. No specific committee or floor arguments are available in the provided record, so these are the likely points of contention inferred from the bill text.