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EXPLANATION: CAPITALS INDICATE MATTER ADDED TO EXISTING LAW.
[Brackets] indicate matter deleted from existing law.
Underlining indicates amendments to bill.
Strike out indicates matter stricken from the bill by amendment or deleted from the law by
amendment.
Italics indicate opposite chamber/conference committee amendments.
*hb0363*
HOUSE BILL 363
Q3 (6lr1399)
ENROLLED BILL
— Ways and Means/Budget and Taxation —
Introduced by Delegate Palakovich Carr
Read and Examined by Proofreaders:
_______________________________________________
Proofreader.
_______________________________________________
Proofreader.
Sealed with the Great Seal and presented to the Governor, for his approval this
_______ day of _______________ at _________________ _______ o’clock, ________M.
______________________________________________
Speaker.
CHAPTER ______
AN ACT concerning 1
Income Tax – Local Local Government – Grant for Recipients of State Child Tax 2
Credit – Authorization 3
FOR the purpose of authorizing a county to provide, by law, a credit against the county 4
grant to recipients of the State income tax credit for certain dependent children , 5
subject to certain limitations ; and generally relating to a credit against the county 6
county grants to recipients of the State income tax credit for dependent children. 7
BY adding to 8
Article – Local Government 9
Section 12–906 10
Annotated Code of Maryland 11
(2013 Volume and 2025 Supplement) 12
BY repealing and reenacting, with amendments, 13
2 HOUSE BILL 363
Article – Tax – General 1
Section 10–706, 10–751, and 10–809 10–706 and 10–809 2
Annotated Code of Maryland 3
(2022 Replacement Volume and 2025 Supplement) 4
BY repealing and reenacting, without amendments, 5
Article – Tax – General 6
Section 10–751 7
Annotated Code of Maryland 8
(2022 Replacement Volume and 2025 Supplement) 9
SECTION 1. BE IT ENACTED BY THE GENERAL ASSEMBLY OF MARYLAND, 10
That the Laws of Maryland read as follows: 11
Article – Local Government 12
12–906. 13
(A) (1) IN THIS SECTION THE F OLLOWING WORDS HAVE THE MEANINGS 14
INDICATED. 15
(2) “FEDERAL ADJUSTED GROS S INCOME ”, “FIDUCIARY”, 16
“RESIDENT”, AND “TAXABLE YEAR” HAVE THE MEANINGS ST ATED IN § 10–101 OF 17
THE TAX – GENERAL ARTICLE. 18
(3) “QUALIFIED CHILD ” AND “TAXPAYER” HAVE THE MEANINGS 19
STATED IN § 10–751 OF THE TAX – GENERAL ARTICLE. 20
(B) A COUNTY MAY PROVIDE, BY LAW, FOR A GRANT FOR EACH QUALIFIED 21
CHILD OF A TAXPAYER IF: 22
(1) THE TAXPAYER HAS FED ERAL ADJUSTED GROSS INCOME LOWER 23
THAN THE THRESHOLD AMOUNT OF $15,000; AND 24
(2) THE TAXPAYER AND EAC H QUALIFIED CHILD ARE RESIDENTS , 25
OTHER THAN FIDUCIARIES, WHO ON THE LAST DAY OF THE TAXABLE YEAR ARE: 26
(I) DOMICILED IN THAT COUNTY; OR 27
(II) MAINTAIN A PRINCIPAL RESIDENCE OR PLACE OF ABODE IN 28
THAT COUNTY. 29
(C) THE AMOUNT OF A GRANT ALLOWED UNDER THIS S ECTION SHALL BE 30
REDUCED BY 10% FOR EACH $1,000, OR FRACTION THEREOF , BY WHICH THE 31
HOUSE BILL 363 3
TAXPAYER’S FEDERAL ADJUSTED G ROSS INCOME EXCEEDS THE THRESHOLD 1
AMOUNT, EXCEPT THAT THE REDUCTION CANNOT REDUCE THE GRANT BELOW ZERO. 2
(D) A COUNTY MAY PROVIDE, BY LAW, FOR: 3
(1) THE AMOUNT OF THE GR ANT UNDER SUBSECTION (B) OF THIS 4
SECTION; AND 5
(2) ANY OTHER PROVISION NECESSARY TO CARRY O UT THE GRANT 6
UNDER THIS SECTION. 7
(E) A COUNTY THAT PROVIDES A GRANT UNDER THIS S ECTION SHALL 8
REIMBURSE THE COMPTROLLER FOR REASO NABLE EXPENSES INCURRED BY THE 9
COMPTROLLER TO PROVID E THE COUNTY INFORMA TION NECESSARY TO 10
IMPLEMENT THE GRANT. 11
Article – Tax – General 12
10–706. 13
(a) Except as otherwise provided in this section, a credit allowed under this 14
subtitle is allowed against the State income tax only. 15
(b) A credit under § 10–701 of this subtitle is allowed against the total county and 16
State income taxes. 17
(c) (1) A credit allowed under [§ 10 –704(a)(1) or ] § 10–704(B)(1), § 18
10–709(b)(1), OR § 10–751(B) of this subtitle is allowed against the State income tax only. 19
(2) A credit allowed under [§ 10 –704(a)(2) or ] § 10–704(B)(2), § 20
10–709(b)(2), OR § 10–751(C) of this subtitle is allowed against the county income tax only. 21
(c) (1) A credit allowed und er [§ 10 –704(a)(1)] § 10–704(B)(1) or § 22
10–709(b)(1) of this subtitle is allowed against the State income tax only. 23
(2) A credit allowed under [§ 10 –704(a)(2)] § 10–704(B)(2) or § 24
10–709(b)(2) of this subtitle is allowed against the county income tax only. 25
10–751. 26
(a) (1) In this section the following words have the meanings indicated. 27
(2) “Qualified child” means a dependent of a taxpayer, if the dependent: 28
4 HOUSE BILL 363
(i) is a dependent for purposes of § 152 of the Internal Revenue Code 1
in effect on December 31, 2024; and 2
(ii) 1. is under the age of 6 years; or 3
2. A. is under the age of 17 years; and 4
B. is a child with a disability, as defined under § 8–401 of the 5
Education Article. 6
(3) “Taxpayer” means: 7
(i) an individual filing an income tax return; or 8
(ii) a married couple filing a joint income tax return. 9
(b) (1) A taxpayer who is a resident and has federal adjusted gross income 10
lower than the threshold amount of $15,000 may claim a credit against the State income 11
tax for each qualified child in an amount equal to $500. 12
[(c)] (2) The amount of the credit ALLOWED UNDER THIS SUBSECTION shall 13
be reduced by $50 for each $1,000, or fraction thereof, by which the taxpayer’s federal 14
adjusted gross income exceeds the threshold am ount, except that the reduction cannot 15
reduce the credit below zero. 16
[(d)] (3) If the credit allowed under this [section] SUBSECTION in any taxable 17
year exceeds the State income tax for that taxable year, the taxpayer may claim a refund 18
in the amount of the excess. 19
(C) (1) A COUNTY MAY PROVIDE , BY LAW , FOR A CREDIT AGAINST THE 20
COUNTY INCOME TAX FOR EACH QUALIFIED CHILD OF A TAXPAYER IF: 21
(I) THE TAXPAYER HAS FED ERAL ADJUSTED GROSS INCOME 22
LOWER THAN THE THRESHOLD AMOUNT OF $15,000; AND 23
(II) THE TA XPAYER AND EACH QUAL IFIED CHILD ARE 24
RESIDENTS, OTHER THAN FIDUCIARI ES, WHO ON THE LAST DAY OF THE TAXABLE 25
YEAR: 26
1. ARE DOMICILED IN THAT COUNTY; OR 27
2. MAINTAIN A PRINCIPAL RESIDENCE OR PLACE O F 28
ABODE IN THAT COUNTY. 29
HOUSE BILL 363 5
(2) THE AMOUNT OF THE COUNTY INCOME TAX CR EDIT ALLOWED 1
UNDER THIS SUBSECTIO N SHALL BE REDUCED B Y $50 FOR EACH $1,000, OR 2
FRACTION THEREOF , BY WHICH THE TAXPAYE R’S FEDERAL ADJUSTED G ROSS 3
INCOME EXCEEDS THE T HRESHOLD AMOUNT , EXCEPT THAT THE REDU CTION 4
CANNOT REDUCE THE CREDIT BELOW ZERO. 5
(3) IF A COUNTY PROVIDES FOR A COUNTY INCOME TAX CREDIT 6
UNDER THIS SUBSECTION, ON OR BEFORE JULY 1 PRIOR TO THE BEGINNING OF THE 7
FIRST TAXABLE YEAR FOR WHICH IT IS APPLICABLE, THE COUNTY SHALL GIVE THE 8
COMPTROLLER NOTICE OF THE COUNTY INCOME TAX CREDIT. 9
(4) A COUNTY MAY PROVIDE, BY LAW, FOR: 10
(I) THE AMOUNT OF THE CO UNTY INCOME TAX CREDIT UNDER 11
THIS SUBSECTION; AND 12
(II) IF THE CREDIT ALLOWED UNDER THIS SUBSECTION IN ANY 13
TAXABLE YEAR EXCEEDS THE TOTAL COUNTY INCOME TAX OTHERWISE PAYABLE BY 14
A TAXPAYER, WHETHER THE TAXPAYER MAY CLAIM A REFUND I N THE AMOUNT OF 15
THE EXCESS. 16
10–809. 17
If an individual is not required to file an income tax return under § 10 –805, § 18
10–806, or § 10–813 of this subtitle, the individual: 19
(1) is not liable for income tax; and 20
(2) may file an income tax return to claim a refund of the income tax 21
withheld or estimated income tax paid or a refund under § 10–704, § 10–707, [or] § 10–714, 22
OR § 10–751(C) § 10–751 of this title. 23
SECTION 2. AND BE IT FURTHER ENACTED, That this Act shall take effect June 24
1, 2026, and shall be applicable to all taxable years beginning after December 31, 2026. 25