Summary of 2007 Tax Legislation for Individuals

The following is a brief summary of Maryland tax legislation affecting individuals that was passed during the 2007 session of the General Assembly and signed into law by Governor Martin O'Malley. No bills affecting the sales and use tax or the admissions and amusement tax were passed. All references are to the Tax-General Article (TG), Annotated Code of Maryland, unless otherwise noted. For more detailed information, see Summary of 2007 Tax Legislation

INCOME TAX

Military Retirement Income - House Bill 392 (Chapter 553, Acts of 2007) and Senate Bill 419 (Chapter 552, Acts of 2007) House Bill 392 and Senate Bill 419 expand the existing military retirement income subtraction modification by allowing individuals who retired before July 1, 1991 from active duty with the Commissioned Corps of the Public Health Service, the National Oceanic and Atmospheric Administration (NOAA), or the Coast and Geodetic Survey to qualify for the subtraction modification. The legislation became effective July 1, 2007 for tax years beginning after December 31, 2006.

Solar Energy Devices - House Bill 590 (Chapter 615, Acts of 2007) House Bill 590 creates a new subtraction modification for the amount of any grant received from the state under the Solar Energy Grant Program. The subtraction is limited to the amount included in the taxpayer's federal adjusted gross income. The legislation became effective July 1, 2007 for tax years beginning after January 31, 2006.

Heritage Structure Rehabilitation Tax Credit - House Bill 598 (Chapter 567, Acts of 2007) and Senate Bill 613 (Chapter 566, Acts of 2007) House Bill 598 and Senate Bill 613 extend the termination date for the tax credit by two years to July 1, 2010. The legislation also requires the governor to include an appropriation to the Reserve Fund for fiscal years 2009 and 2010; permits the Maryland Historical Trust to charge a fee for administrative costs for non-commercial rehabilitations; and makes other changes that expand the scope of the tax credit. The legislation became effective July 1, 2007 for initial credit certificates issued on or after July 1, 2007.

Earned Income Tax Credit and Guaranteed Access Grant - Senate Bill 834 (Chapter 491, Acts of 2007) Senate Bill 834 prohibits the Office of Student Financial Assistance from considering an amount received as an earned income credit when determining the financial need of an applicant for a Guaranteed Access Grant. Effective July 1, 2007.

Tax Credit for Individuals Facing Employment Barriers - Senate Bill 1033 (Chapter 370, Acts of 2007) Senate Bill 1033 extends, by one year, both the Employment Opportunity Tax Credit and the Maryland Disability Employment Tax Credit. Both credits will be allowed for employees hired before July 1, 2008. The legislation became effective July 1, 2007 for tax years beginning after December 31, 1996, but before January 1, 2011.

ESTATE TAX

Donations of Conservation Easements - House Bill 187 (Chapter 19, Acts of 2007) and Senate Bill 219 (Chapter 18, Acts of 2007) House Bill 187 and Senate Bill 219 clarifies that the personal representative of an estate may donate a conservation easement on real property if the donation is authorized under the will. A fiduciary, or the trustee of a trust, may donate, or consent to the donation of, a conservation easement on real property if the donation is authorized under the governing instrument. The donation of a conservation easement on real property qualifies as a federal estate tax exclusion. This legislation becomes effective October 1, 2007 and can be applied retroactively to a conservation easement donation from an estate of a decedent who died on or after January 1, 1998.