Read the full stored bill text
EXPLANATION: CAPITALS INDICATE MATTER ADDED TO EXISTING LAW.
[Brackets] indicate matter deleted from existing law.
*hb0930*
HOUSE BILL 930
Q3 6lr3439
By: Delegates Forbes, Allen, Behler, Boyce, Chang, Ebersole, Fair, Feldmark,
Lewis, Moon, Pasteur, Ruth, and Terrasa
Introduced and read first time: February 5, 2026
Assigned to: Ways and Means
A BILL ENTITLED
AN ACT concerning 1
Income Tax – Decoupling From Federal Changes – Education Expenses 2
FOR the purpose of prohibiting the Governor from electing to participate in a certain tax 3
credit program for certain elementary and secondary education scholarships; 4
providing an addition modification under the Maryland income tax for the amount 5
paid by an employer on behalf of an employee as a contribution to a cer tain account 6
and the amount of any distribution under certain prepaid contracts or investment 7
accounts that is not used for qualified education expenses; excluding from a 8
subtraction modification certain contributions to and distributions from certain 9
investment plans that are used for certain elementary and secondary education 10
expenses; and generally relating to the effect of amendments to the Internal Revenue 11
Code on the Maryland income tax. 12
BY adding to 13
Article – State Government 14
Section 3–309 15
Annotated Code of Maryland 16
(2021 Replacement Volume and 2025 Supplement) 17
BY repealing and reenacting, without amendments, 18
Article – Tax – General 19
Section 10–204(a), 10–205(a), and 10–208(a) 20
Annotated Code of Maryland 21
(2022 Replacement Volume and 2025 Supplement) 22
BY adding to 23
Article – Tax – General 24
Section 10–204(m) 25
Annotated Code of Maryland 26
(2022 Replacement Volume and 2025 Supplement) 27
2 HOUSE BILL 930
BY repealing and reenacting, with amendments, 1
Article – Tax – General 2
Section 10–205(h) and 10–208(o) 3
Annotated Code of Maryland 4
(2022 Replacement Volume and 2025 Supplement) 5
SECTION 1. BE IT ENACTED BY THE GENERAL ASSEMBLY OF MARYLAND, 6
That the Laws of Maryland read as follows: 7
Article – State Government 8
3–309. 9
THE GOVERNOR MAY NOT ELEC T TO PARTICIPATE IN THE TAX CREDIT 10
PROGRAM FOR QUALIFIE D ELEMENTARY AND SEC ONDARY EDUCATION 11
SCHOLARSHIPS ESTABLISHED UNDER § 25F OF THE INTERNAL REVENUE CODE. 12
SECTION 2. AND BE IT FURTHER ENACTED, That the Laws of Maryland read 13
as follows: 14
Article – Tax – General 15
10–204. 16
(a) To the extent excluded from federal adjusted gross income, the amounts under 17
this section are added to the federal adjusted gross income of a resident to determine 18
Maryland adjusted gross income. 19
(M) THE ADDITION UNDER SUBSECTION (A) OF THIS SECTION INCLUDES ANY 20
AMOUNT PAID BY AN EM PLOYER AS A CONTRIBU TION TO A TRUMP ACCOUNT AND 21
EXCLUDED FROM THE GR OSS INCOME OF AN EMP LOYEE UNDER § 128 OF THE 22
INTERNAL REVENUE CODE. 23
10–205. 24
(a) In addition to the modification under § 10 –204 of this subtitle, t he amounts 25
under this section are added to the federal adjusted gross income of a resident to determine 26
Maryland adjusted gross income. 27
(h) (1) (i) In this subsection the following words have the meanings 28
indicated. 29
(ii) “Account holder” means an acc ount holder as defined in § 30
18–1901, § 18–19A–01, or § 18–19B–01 of the Education Article. 31
HOUSE BILL 930 3
(iii) “Qualified beneficiary” has the meaning stated in § 18 –1901 of 1
the Education Article. 2
(iv) “Qualified designated beneficiary” means a qualified design ated 3
beneficiary as defined in § 18–19A–01 or § 18–19B–01 of the Education Article. 4
(v) 1. “Qualified higher education expenses” has the meaning 5
stated in § 529 of the Internal Revenue Code. 6
2. “QUALIFIED HIGHER EDUC ATION EXPENSES ” DOES 7
NOT INCLUDE EXPENSES IDE NTIFIED UNDER § 529(C)(7) OF THE INTERNAL 8
REVENUE CODE. 9
(2) The addition under subsection (a) of this section includes the amount 10
of: 11
(i) any refund received in the taxable year by an account holder 12
under a prepaid contract in ac cordance with the Maryland Senator Edward J. Kasemeyer 13
Prepaid College Trust; or 14
(ii) any distribution received in the taxable year by an account 15
holder under a prepaid contract in accordance with the Maryland Senator Edward J. 16
Kasemeyer Prepaid College Trust or under an investment account in accordance with the 17
Maryland Senator Edward J. Kasemeyer College Investment Plan or the Maryland 18
Broker–Dealer College Investment Plan that is not used on behalf of the qualified 19
beneficiary or qualified designated beneficiary for qualified higher education expenses. 20
(3) The amount of the addition required under this subsection shall be 21
reduced by any amount included in the individual’s federal adjusted gross income as a 22
result of the refund or distribution. 23
(4) The cumulative amount of the addition under this subsection for the 24
taxable year and all prior taxable years may not exceed the cumulative amount allowed as 25
a subtraction: 26
(i) under § 10 –208(n) of this subtitle for the taxable year and all 27
prior taxable years for the account holder’s payments to the prepaid contract under which 28
the refund or distribution is received; or 29
(ii) under § 10 –208(o) of this subtitle for the taxable year and all 30
prior taxable years for contributions made by an account h older to an investment account 31
under which the distribution is received. 32
10–208. 33
4 HOUSE BILL 930
(a) In addition to the modification under § 10 –207 of this subtitle, the amounts 1
under this section are subtracted from the federal adjusted gross income of a resident to 2
determine Maryland adjusted gross income. 3
(o) (1) (i) In this subsection the following words have the meanings 4
indicated. 5
(ii) “Account holder” means an account holder as defined in § 6
18–19A–01 or § 18–19B–01 of the Education Article. 7
(iii) “Contributor” means an individual who contributes funds to a 8
Maryland Senator Edward J. Kasemeyer College Investment Plan or Broker –Dealer 9
College Investment Plan account under Title 18, Subtitle 19A or Subtitle 19B of the 10
Education Article. 11
(iv) “Investment account” means an investment account as defined 12
in § 18–19A–01 or § 18–19B–01 of the Education Article. 13
(v) “Qualified designated beneficiary” means a qualified designated 14
beneficiary as defined in § 18–19A–01 or § 18–19B–01 of the Education Article. 15
(2) (i) Except as provided in subparagraph (ii) of this paragraph and 16
subject to the limitation under paragraph (3) of this subsection, the subtraction under 17
subsection (a) of this section includes the amount contributed by an account holder or a 18
contributor during the taxable year to an investment account. 19
(ii) The subtraction under subparagraph (i) of this paragraph may 20
not be taken if: 21
1. the account holder received a State contribution under § 22
18–19A–04.1 of the Education Article during the taxable year; OR 23
2. THE FUNDS CONTRIBUTE D TO A COLLEGE 24
INVESTMENT PLAN ESTABLISHED UNDER § 529 OF THE INTERNAL REVENUE CODE 25
ARE USED FOR ELEMENTARY OR SECONDARY EDUCATION EXPENSES AS DESCRIBED 26
IN § 529(C)(7) OF THE INTERNAL REVENUE CODE. 27
(3) (i) Subject to paragraph (4) of this subsection, for each account 28
holder or contributor for all investment accounts maintained in the Maryland Senator 29
Edward J. Kasemeyer College Investment Plan and the Maryland Broker –Dealer College 30
Investment Plan f or the same qualified designated beneficiary, the subtraction under 31
paragraph (2) of this subsection may not exceed $2,500 for any taxable year per qualified 32
designated beneficiary. 33
(ii) For purposes of the limitation under this paragraph, each spouse 34
on a joint return shall be treated separately. 35
HOUSE BILL 930 5
(4) Subject to the $2,500 annual limitation for each account holder or 1
contributor for each qualified designated beneficiary, the amount disallowed as a 2
subtraction under this subsection for any taxable yea r as a result of the limitation under 3
paragraph (3) of this subsection may be carried over until used to the next 10 succeeding 4
taxable years as a subtraction. 5
SECTION 3. AND BE IT FURTHER ENACTED, That this Act shall take effect July 6
1, 2026, and Sectio n 2 of this Act shall be applicable to all taxable years beginning after 7
December 31, 2025. 8