Income Tax - Subtraction Modification for Public Safety Retirement Income - Amount
HB653 increases the Maryland income tax subtraction modification for certain retirement income earned by public safety retirees. Under current law, eligible retirees age 55 or older may subtract the first $15,000 of retirement income attributable to service as a public safety employee; this bill phases that amount upward over several years, eventually allowing the first $20,000 to be subtracted for taxable years beginning after December 31, 2029. The bill applies to retirement income from an employee retirement system attributable to service as a retired correctional officer, law enforcement officer, or fire, rescue, or emergency services personnel.
The increase is phased in gradually: $15,000 for tax years 2025, $16,000 for 2026, $17,000 for 2027, $18,000 for 2028, $19,000 for 2029, and $20,000 beginning in 2030. The bill takes effect July 1, 2026, and amends the Tax-General Article governing Maryland income tax subtraction modifications. It does not create a new deduction category, but expands the amount of retirement income that may be excluded from Maryland taxable income for qualifying public safety retirees.
HB653 amends § 10-207(mm) of the Tax-General Article to increase the state income tax subtraction for qualifying public safety retirement income, thereby reducing taxable income for eligible retirees and potentially lowering state income tax collections. The bill affects retired correctional officers, law enforcement officers, and fire, rescue, and emergency services personnel who meet the age and retirement-income requirements, and it updates the statutory phase-in schedule for the subtraction amount over multiple tax years.
The bill appears to have broad support. It received a favorable committee report, was adopted by the House, and passed third reading with 131 yeas and 0 nays. The voting record suggests strong bipartisan or near-unanimous agreement that the tax benefit for public safety retirees should be expanded.
No major opposition is reflected in the available record. The only substantive policy issue apparent from the bill text is the size and timing of the phased-in tax subtraction increase, which determines the fiscal benefit to retirees and the revenue impact to the state. Because there were no committee transcripts or recorded dissent, there is no evidence of significant contention over eligibility categories, the age threshold, or the phased implementation schedule.