Hogan, Ferguson And Jones Sign $1.86B Tax Cut Package Into Law
BALTIMORE (WJZ) -- Marylanders are due to receive $1.86 billion in savings after Gov. Larry Hogan, House Speaker Adrienne Jones and Senate President Bill Ferguson signed into law a package of tax cuts, including a bill that eliminates the income tax for most retirees in the state.
Senate Bill 405 and House Bill 420 create a tax credit of $1,000 for residents age 65 and older whose income does not exceed $100,000, and a credit of $1,750 for couples age 65 and older whose income does not exceed $150,000. Both credits go against the state's collection of income tax.
The bills also expand the limits on taxes for retired law enforcement; correctional officers; and fire, rescue, and emergency services personnel between the ages of 55 and 64.
Other bills in the package waive the sales tax for child care and health products, and create a tax credit for businesses that "hire and retain workers from underserved communities."
During a bill-signing ceremony Friday, Hogan said he's been hearing from Maryland seniors about the tax rate since he took office.
"I was hearing, nearly every day, and I have continued to hear for the past 8 years, from folks who say, 'I love the state of Maryland, I really don't want to leave my kids and grandkids, but I just can't afford to stay here on a fixed income," he said.
The cut is expected to impact 80% of seniors in the state -- a group that accounts nearly 16% of the state's population, Ferguson said.
"They make up a significant portion of our communities and over many decades have helped build our state into what it is today," he said. "They are generations of men and women who incurred wealth for our nation, stimulated the economy, advocated for civil rights and made technological advancements that have improved our standard of living."
Maryland lawmakers started the legislative session in January with a $4.5 billion budget surplus. In March, state revenue projections were revised up by $1.6 billion.
Part of the windfall was used for a 30-day gas tax holiday. Surplus money is being used to cover losses to the Transportation Trust Fund after the state suspended its collection of 36 cents per gallon.
The sales tax changes are expected to save families $115.6 million and Work Opportunity Tax Credit program is expected to give small businesses $195 million.
"Investing state dollars to help vulnerable populations delivers on our promise to use this session to support our residents through post-pandemic recovery," said Jones.
The tax cuts are in effect between Fiscal Year 2023 and Fiscal Year 2027.
