What's New for the Tax Filing Season

Here are some of the most important changes and benefits affecting the approximately 3.5 million taxpayers working on their 2008 Maryland income tax returns due to be filed by April 15, 2009.

• New graduated tax rates - The new graduated personal income tax rates start at 2 percent on the first $1,000 of taxable income and increase up to a maximum of 6.25 percent on incomes exceeding $1,000,000. More
• New personal exemption amounts - The personal exemption amount has been increased from $2,400 to $3,200 but is subject to a partial phaseout depending on the taxpayer's adjusted gross income. More
• Increased pension exclusion - Maryland's maximum pension exclusion, which is available to qualifying taxpayers 65 or older, increased from $23,600 to $24,000 for tax year 2008. More
• Expanded refundable earned income tax credit - The refundable earned income tax credit for qualifying individuals has been increased from 20 percent to 25 percent of the federal earned income credit, and having a dependent is no longer required for qualification. More
• Military personnel - In some situations, military personnel who are legal residents of another state may have to file new Form 505NR with their nonresident Form 505. More
• Nonresidents - Nonresidents who are subject to the Maryland income tax must use new Form 505NR to subtract their non-Maryland income. More
• Increased local income tax rate for Allegany County - The local income tax rate for Allegany County has been increased from .0293 to .0305 for tax year 2008. More
• Estimated taxpayers in Prince George's County - Taxpayers in Prince George's County filing estimated taxes for tax year 2009 must calculate their local tax at the new rate of 3.20 percent. More