From Del. Mary Ann Lisanti:
After a decade of failed attempts by advocates and legislators, House Bill 327 Income Tax – Subtraction Modification – Military Retirement Income, Sponsored by Delegates Mary Ann Lisanti, (D) Harford County and Pat Young, (D) Baltimore County has achieved an important milestone by passing the Maryland House of Delegates Monday 134-0 and is now on its way to the Maryland Senate. Hearings will be held before the Senate Budget and Tax Committee on March 28th, where action must be taken before the 90 day legislative session ends at midnight on April 9, 2018.
The bill in its amended form will phase-in the full tax exemption of all military retirement income being fully exempt from Maryland state income taxes beginning after December 31, 2021. The phase-in will occur over three taxable years. For those veterans under 65 years of age the bill calls for a year one $7,500.00 deduction, year two $15,00.00, year three $21,000.00 and full exemption year four. For those over 65 years of age the phase-in will be front loaded with the year one deduction set at $12,500.00, year two $20,00.00, year three $25,000.00 and full exemption will also be reached by year four.
This bill represents a compromise that was born from a package of bills submitted by Delegates Young and Lisanti. Both have been working over the 2017 interim on various funding strategies that addresses the significant fiscal impact of exempting military retiree pensions. “Gaining the support from the necessary committees and House members has been no easy task, but at the end of the day we all recognize what the passage of HB 327 will mean for our Veterans in the State of Maryland.” Said Delegate Young. “As we commemorate the 50th anniversary of the Vietnam War it would be a fitting tribute to join other surrounding states in exempting military retirement income form state taxes.” “The legislature has been working on reducing the tax burden on our Veterans for some time now…It is about time we move aggressively to keep our retired members of the military here in Maryland.” said Delegate Lisanti
Maryland is home to over 55,000 veterans that receive a pension earned during their military service. Under current law they are able to write off the first $10,000 of their retirement income. Three of the four surrounding states exempt military pension income from state taxes which has had an impact on whether service members who retire from the military decide to remain in Maryland. “It’s easy to move across the border and make the commute to work in order to save more of their retirement income.” “Employers know that veterans are good workers. They are reliable, committed to the community with a strong work ethic, and therefore keeping them in Maryland after retirement has added benefits to enhancing Maryland workforce.” said Delegate Lisanti.
Anyone interested in providing written or oral testimony in support of HB 327 for the March 28th hearing may do so by emailing firstname.lastname@example.org or by calling 410-841-3331 and asking to speak with Adam.