Governor Hogan signed into law the Maryland Tax Reduction Act on Friday, April 1st.
The act will cut retirement taxes by eliminating 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 will pay no state tax up to $50k. This is the largest tax reduction for Maryland residents in two decades. Scheduled to be phased in over 5 years beginning this year.
In addition, Governor Hogan will be introducing the Hometown Heroes Act to exempt retired law enforcement, fire, rescue, corrections, and emergency response workers from state tax on all retirement income specific to the profession. In 2017 the Governor exempted the first $15,000 of these employees’ income. He will push to exempt income on these professions and lower the age of eligibility from 55 to 50 years.