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*hb0735*
HOUSE BILL 735
Q3 6lr2360
CF SB 519
By: Delegate Palakovich Carr
Introduced and read first time: February 2, 2026
Assigned to: Ways and Means
Committee Report: Favorable
House action: Adopted
Read second time: February 24, 2026
CHAPTER ______
AN ACT concerning 1
Earned Income Tax Credit – Assistance Program Implementation Delay and 2
Study 3
FOR the purpose of delaying the implementation of the Earned Income Tax Credit 4
Assistance Program until a certain taxable year; requiring the Comptroller’s Office, 5
on or before a certain date, to study and make recommendations regarding outreach 6
efforts to encourage eligible taxpayers to claim the State earned income tax credit ; 7
requiring the Department of Service and Civic Innovation to make certain 8
recommendations concerning methods to assist low –income Marylanders with 9
claiming certain credits and obtaining certain assistance; and generally relating to 10
the State earned income tax credit. 11
BY repealing and reenacting, with amendments, 12
Article – Tax – General 13
Section 2–116 14
Annotated Code of Maryland 15
(2022 Replacement Volume and 2025 Supplement) 16
BY repealing and reenacting, with amendments, 17
Chapter 110 of the Acts of the General Assembly of 2022 18
Section 2 19
BY repealing and reenacting, with amendments, 20
Chapter 111 of the Acts of the General Assembly of 2022 21
Section 2 22
2 HOUSE BILL 735
SECTION 1. BE IT ENACTED BY THE GENERAL ASSEMBLY OF MARYLAND, 1
That the Laws of Maryland read as follows: 2
Article – Tax – General 3
2–116. 4
(a) In this section, “Program” means the Maryland Earned Income Tax Credit 5
Assistance Program for Low–Income Families. 6
(b) (1) There is a Maryland Earned Income Tax Credit Assistance Program for 7
Low–Income Families. 8
(2) The purpose of the Program is to: 9
(i) identify residents who are eligible to claim the credit under § 10
10–704 of this article but have failed to claim the credit; and 11
(ii) provide residents identified under item (i) of this paragraph with 12
a streamlined mechanism to claim the credit under § 10–704 of this article. 13
(3) The Comptroller shall administer the Program. 14
(c) (1) This subsection applies to a taxable year beginning after December 31, 15
[2024] 2029. 16
(2) Subject to subsection (d) of this section, the Comptroller shall provide, 17
as part of the Program, a form to claim the credit under § 10 –704 of this article to any 18
resident: 19
(i) for whom the Comptroller has received federal income tax return 20
information for a taxable year described in § 13–1104(c)(1) of this article; 21
(ii) whose wages were reported by the resident’s employer to the 22
Comptroller for that taxable year; 23
(iii) who the Co mptroller determines, based on all available data, 24
may be eligible to claim the credit under § 10–704 of this article for that taxable year; 25
(iv) who failed to claim the credit under § 10 –704 of this article for 26
that taxable year; and 27
(v) who is authorized to request a refund under § 13 –1104(c)(1) of 28
this article. 29
HOUSE BILL 735 3
(3) The Comptroller shall provide the form required under this subsection 1
no later than 45 days before the expiration of the statute of limitations for claiming a refund 2
under § 13–1104(c)(1) of this article. 3
(d) In processing the form to claim the credit under § 10 –704 of this article, the 4
Comptroller shall calculate the credit as though the resident elected to use the standard 5
deduction under § 10–217 of this article to compute Maryland taxable income. 6
(e) (1) The Comptroller shall notify each resident identified under subsection 7
(c)(2) of this section that the Program is a method of claiming the credit under § 10 –704 of 8
this article available to eligible residents. 9
(2) The notification required under paragraph (1) of this subsection shall 10
include: 11
(i) a description of the Program; 12
(ii) an explanation of the resident’s eligibility for participation in the 13
Program; 14
(iii) an explanation that the resident’s participatio n in the Program 15
is optional but subject to the limitation under subsection (d) of this section; 16
(iv) an explanation that, notwithstanding the provisions of this 17
section, the resident’s participation in the Program is subject to the provisions of this article 18
relating to the filing of a tax return; 19
(v) the time by which the form must be completed and returned in 20
order to claim the credit under § 10–704 of this article; and 21
(vi) a statement that the resident may be eligible for, in a succeeding 22
taxable year: 23
1. the federal earned income credit under § 32 of the Internal 24
Revenue Code; and 25
2. the credit under § 10–704 of this article. 26
(f) On request by a resident, a tax collector shall waive any penalties or interest 27
on any assessment of tax due on the form provided to the resident under subsection (c)(2) 28
of this section unless the tax collector reasonably believes the resident knew or should have 29
known the tax was miscalculated. 30
(g) On or before December 31, [2025] 2030, and each Decem ber 31 thereafter 31
through December 31, [2030] 2035, the Comptroller shall report to the Governor and, in 32
accordance with § 2–1257 of the State Government Article, the General Assembly on: 33
4 HOUSE BILL 735
(1) the effectiveness of the Program in meeting the purpose speci fied in 1
subsection (b)(2) of this section and recommendations for potential statutory or 2
administrative changes to enhance participation in the Program; 3
(2) the number of claim forms provided to residents during the previous 4
fiscal year; 5
(3) the number of claim forms filed by residents during the previous fiscal 6
year; 7
(4) the number of refundable credits provided to residents during the 8
previous fiscal year; and 9
(5) the total amount of refundable credits provided to residents during the 10
previous fiscal year. 11
(h) The Comptroller shall adopt regulations to carry out this section. 12
Chapter 110 of the Acts of 2022 13
SECTION 2. AND BE IT FURTHER ENACTED, That this Act shall take effect 14
October 1, 2022. It shall remain effective for a period of [8] 13 years and 3 months and, at 15
the end of December 31, [2030] 2035, this Act, with no further action required by the 16
General Assembly, shall be abrogated and of no further force and effect. 17
Chapter 111 of the Acts of 2022 18
SECTION 2. AND BE IT FURTHER ENAC TED, That this Act shall take effect 19
October 1, 2022. It shall remain effective for a period of [8] 13 years and 3 months and, at 20
the end of December 31, [2030] 2035, this Act, with no further action required by the 21
General Assembly, shall be abrogated and of no further force and effect. 22
SECTION 2. AND BE IT FURTHER ENACTED, That: 23
(a) The Comptroller’s Office shall study and make recommendations regarding 24
outreach efforts to encourage eligible taxpayers to claim the State earned income tax credit. 25
(b) In conducting the study required under subsection (a) of this section, the 26
Comptroller’s Office shall: 27
(1) analyze the effectiveness of practices or forms of outreach in this State 28
and in other states to assist eligible taxpayers to claim the State earned income tax credit; 29
(2) analyze which Maryland demographic groups have responded well to 30
previous outreach efforts concerning the State earned income tax credit and which have 31
not responded well or remain underserved; 32
HOUSE BILL 735 5
(3) analyze the degree to whi ch and manner in which Maryland’s current 1
earned income tax credit outreach efforts are reliant on federal data sharing; 2
(4) research existing or possible methods to conduct outreach efforts in the 3
absence of federal data sharing; 4
(5) analyze how Maryland Tax Connect might simplify filing for the State 5
earned income tax credit and encourage more eligible taxpayers to claim the credit; 6
(6) research changes to the filing process that generally could simplify 7
filing or encourage more eligible taxpayers to claim the credit; 8
(7) research the potential for privacy risks if the Comptroller’s Office and 9
the Internal Revenue Service share data concerning the State earned income tax credit , 10
including whether the federal government might use the data shared by the Comptroller’s 11
Office for the purposes of immigration enforcement; 12
(8) identify and analyze strategies that are most effective in advising 13
eligible taxpayers who previously filed taxes but failed to claim the State earned income 14
tax credit of their ability to claim the credit in future filing years; 15
(9) analyze which strategies are most effective in identifying and reaching 16
low–income taxpayers who are not required to file an income tax return and encouraging 17
those taxpayers to file and claim the State earned income tax credit; 18
(10) analyze opportunities for partnership between the Comptroller’s Office 19
and State social service agencies for data sharing, outreach, and enhancing awareness of 20
the State earned income tax credit; and 21
(11) research whether employers who are required to notify their employees 22
about the State earned income tax credit need additional support or resources from the 23
Comptroller’s Office in carrying out that duty. 24
(c) On or before December 1, 2026, the Comptroller’s Office shall submit a report 25
of its findings and recommendations to the General Assembly, in accordance with § 2–1257 26
of the State Government Article. 27
SECTION 3. AND BE IT FURTHER ENACTED, That: 28
(a) The Department of Service and Civi c Innovation shall study and make 29
recommendations on how Maryland Corps participants might assist low –income 30
Marylanders with claiming the State earned income tax credit and other family –serving 31
tax credits and government assistance for which they may be eligible. 32
(b) On or before December 1, 202 6, t he Department of Service and Civic 33
Innovation shall submit a report on its findings and recommendations to the General 34
Assembly, in accordance with § 2–1257 of the State Government Article. 35
6 HOUSE BILL 735
SECTION 4. AND BE IT FURTHER ENACTED, That this Act shall take effect July 1
1, 2026. 2
Approved:
________________________________________________________________________________
Governor.
________________________________________________________________________________
Speaker of the House of Delegates.
________________________________________________________________________________
President of the Senate.