Biggest Tax Reduction in Maryland in More Than Two Decades
Retirees with Maryland Income Up to $50,000 Would Pay No State Income Tax Whatsoever
Next Step in Fulfilling Commitment to Eliminate All Retirement Taxes in Maryland
ANNAPOLIS, MD—Governor Larry Hogan today announced a more than $1 billion tax relief proposal to make it more affordable for retirees to stay in Maryland. This legislation, which would lower taxes for more than 230,000 Marylanders, is the biggest tax reduction in Maryland in more than two decades.
“People who have been lifelong Marylanders and have contributed so much, and still have more to offer, are moving to other states for one reason—our state’s sky-high retirement taxes,” said Governor Hogan. “When I first ran for governor, I said that once we solved the budget crisis and turned our economy around I wanted to eventually reach the point where we could eliminate all retirement taxes just as other states have done. That is still our goal, and this tax cut is a major step toward achieving it.”
The Retirement Tax Reduction Act of 2020 will cut retirement taxes for Marylanders by more than $1 billion over five years. This legislation will eliminate 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 up to $50,000 will pay no state tax whatsoever in the state of Maryland. This tax reduction will be phased in over five years, beginning in FY22.
“This legislation will provide tax relief to 230,000 Marylanders, is the largest tax reduction in Maryland in more than two decades, and it will keep tens of thousands of Maryland retirees from being forced to flee our state,” the governor continued. “As long as I am governor, I will continue to fight to make it easier for Maryland families, small businesses, and retirees to stay in our state, and to make it easier for all Marylanders to keep more of their hard-earned money.”
Over the last five years, Governor Hogan has led an historic economic turnaround, with the state going from losing 100,000 jobs prior to taking office to gaining 140,000 jobs. More businesses are open and more people are working than ever before in the history of the state. The governor has already delivered $1.25 billion in tax, toll, and fee relief for hardworking families, retirees, and small businesses.
Despite this progress, a recent survey found that Maryland is the worst state for retirees, ranking near the bottom in affordability. Since taking office, Governor Hogan has taken numerous steps to fulfill his commitment to eliminate state income taxes on all retirement income.
In addition to today’s announcement, the governor has introduced the Hometown Heroes Act of 2020 to exempt law enforcement, fire, rescue, corrections, and emergency response personnel from state tax on all retirement income specific to their service in those professions. This is the fifth year that Governor Hogan has introduced legislation to eliminate state taxes on the retirement income of first responders. In 2017, the governor was proud to enact the Hometown Heroes benefit so that first responders can exempt the first $15,000 of their retirement income from state taxes. This year, he is again pushing to fully exempt all retirement income for these occupations and to lower the age of eligibility from 55 to 50.
The governor has also announced legislation to eliminate all state taxes on retirement income received as a result of military service. In 2015, the governor enacted legislation to increase the tax exemption on military retiree pensions from $5,000 to $10,000 for retirees 65 years or older, and in 2018, he again enacted legislation that increased the exemption by 50% to $15,000 and lowered the eligibility age to 55.
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Retirees with Maryland Income Up to $50,000 Would Pay No State Income Tax Whatsoever
Next Step in Fulfilling Commitment to Eliminate All Retirement Taxes in Maryland
ANNAPOLIS, MD—Governor Larry Hogan today announced a more than $1 billion tax relief proposal to make it more affordable for retirees to stay in Maryland. This legislation, which would lower taxes for more than 230,000 Marylanders, is the biggest tax reduction in Maryland in more than two decades.
“People who have been lifelong Marylanders and have contributed so much, and still have more to offer, are moving to other states for one reason—our state’s sky-high retirement taxes,” said Governor Hogan. “When I first ran for governor, I said that once we solved the budget crisis and turned our economy around I wanted to eventually reach the point where we could eliminate all retirement taxes just as other states have done. That is still our goal, and this tax cut is a major step toward achieving it.”
The Retirement Tax Reduction Act of 2020 will cut retirement taxes for Marylanders by more than $1 billion over five years. This legislation will eliminate 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 up to $50,000 will pay no state tax whatsoever in the state of Maryland. This tax reduction will be phased in over five years, beginning in FY22.
“This legislation will provide tax relief to 230,000 Marylanders, is the largest tax reduction in Maryland in more than two decades, and it will keep tens of thousands of Maryland retirees from being forced to flee our state,” the governor continued. “As long as I am governor, I will continue to fight to make it easier for Maryland families, small businesses, and retirees to stay in our state, and to make it easier for all Marylanders to keep more of their hard-earned money.”
Over the last five years, Governor Hogan has led an historic economic turnaround, with the state going from losing 100,000 jobs prior to taking office to gaining 140,000 jobs. More businesses are open and more people are working than ever before in the history of the state. The governor has already delivered $1.25 billion in tax, toll, and fee relief for hardworking families, retirees, and small businesses.
Despite this progress, a recent survey found that Maryland is the worst state for retirees, ranking near the bottom in affordability. Since taking office, Governor Hogan has taken numerous steps to fulfill his commitment to eliminate state income taxes on all retirement income.
In addition to today’s announcement, the governor has introduced the Hometown Heroes Act of 2020 to exempt law enforcement, fire, rescue, corrections, and emergency response personnel from state tax on all retirement income specific to their service in those professions. This is the fifth year that Governor Hogan has introduced legislation to eliminate state taxes on the retirement income of first responders. In 2017, the governor was proud to enact the Hometown Heroes benefit so that first responders can exempt the first $15,000 of their retirement income from state taxes. This year, he is again pushing to fully exempt all retirement income for these occupations and to lower the age of eligibility from 55 to 50.
The governor has also announced legislation to eliminate all state taxes on retirement income received as a result of military service. In 2015, the governor enacted legislation to increase the tax exemption on military retiree pensions from $5,000 to $10,000 for retirees 65 years or older, and in 2018, he again enacted legislation that increased the exemption by 50% to $15,000 and lowered the eligibility age to 55.
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