ANNAPOLIS - “Maryland needs to become a state that people want to retire in if we want to see our economy grow. In order to do this, Maryland needs to become more tax friendly and this bill is just one piece of the puzzle to help us do it” stated Delegate Mike McDermott (R- Worcester & Wicomico Counties) in the House of Delegates hearing on House Bill 75, entitled “Income Tax - Income Modification - Retirement Income.”
House Bill 75 will allow retirees to exempt the first $50,000 from their pensions from the state’s income tax. Under current law, Maryland already provides a pension exclusion for retirees who are at least 65 years old or who are completely disabled. “The Tax Foundation makes it quite clear that there is a migration, an exodus, if you will, of money and people leaving the state of Maryland… Maryland needs to move in a more competitive direction if we want to actually compete with other states in the region. If not, we will continue to see an exodus of individuals, small business, and Fortune 500 Companies” continued Delegate McDermott.
“This bill helps people who have grown up in, worked in, raised kids in, and made a life for themselves in Maryland; this bill bets on those people. If the Maryland legislature exempts the first $50,000 of retirement income from the income tax, not only will retirees stay in Maryland, rather than go to more tax friendly states such as Florida or Texas, but we will see that money invested back into the communities here. We will see those people by another car here. We will see those people help their kids buy a house here. The benefits and the economy growth that Maryland will see from this bill substantially outweighs the costs” concluded Delegate McDermott, before the House Ways and Means Committee.
House Bill 75 is still awaiting a vote by the Ways and Means Committee. If passed by the House and Senate, this bill will take effect for the 2014 tax year.