Income Tax - Credit for Paid Organ Donation Leave

EXPLANATION: CAPITALS INDICATE MATTER ADDED TO EXISTING LAW.
[Brackets] indicate matter deleted from existing law.
*sb0793*

SENATE BILL 793
Q3 6lr3408
CF 6lr3405
By: Senator Lam
Introduced and read first time: February 6, 2026
Assigned to: Budget and Taxation

A BILL ENTITLED

AN ACT concerning 1

Income Tax – Credit for Paid Organ Donation Leave 2

FOR the purpose of allowing a credit against the State income tax for certain qualified 3
employers who provide certain paid organ donation leave to eligible employees; 4
allowing a qualified employer to carry over any excess credit to certain taxable years; 5
and generally relating to a credit against the State income tax for employers that 6
provide paid organ donation leave. 7

BY adding to 8
Article – Tax – General 9
Section 10–758 10
Annotated Code of Maryland 11
(2022 Replacement Volume and 2025 Supplement) 12

SECTION 1. BE IT ENACTED BY THE GENERAL ASSEMBLY OF MARYLAND, 13
That the Laws of Maryland read as follows: 14

Article – Tax – General 15

10–758. 16

(A) (1) IN THIS SECTION THE F OLLOWING WORDS HAVE THE MEANIN GS 17
INDICATED. 18

(2) “DEPARTMENT” MEANS THE MARYLAND DEPARTMENT OF 19
HEALTH. 20

(3) “ELIGIBLE EMPLOYEE” MEANS AN INDIVIDUAL WHO: 21

(I) IS EMPLOYED BY A QUALIFIED EMPLOYER; AND 22
2 SENATE BILL 793

(II) PROVIDES WRITTEN VER IFICATION FROM A LIC ENSED 1
PHYSICIAN THAT THE INDIVI DUAL DONATED ONE OR MORE OF THE INDIVIDU AL’S 2
ORGANS TO ANOTHER INDIVIDUAL FOR ORGAN TRANSPLANTATION. 3

(4) “ORGAN” HAS THE MEANING STAT ED IN § 10–208(W) OF THIS 4
TITLE. 5

(5) “ORGAN DONATION LEAVE” MEANS A PERIOD THAT: 6

(I) AN ELIGIBLE EMPLOYEE IS ABSENT FROM EMPLOYME NT 7
FOR THE PURPOSE OF DONATING AN ORGAN; AND 8

(II) IS IN ADDITION TO AN Y OTHER PAID LEAVE B ENEFITS 9
OFFERED BY THE EMPLOYER, INCLUDING ANY BENEFITS OFFERED IN ACCORDANCE 10
WITH TITLE 8.3 OF THE LABOR AND EMPLOYMENT ARTICLE. 11

(6) “QUALIFIED EMPLOYER” MEANS AN EMPLOYER THAT: 12

(I) MAINTAINS A WRITTEN POLICY PROVIDING PAI D ORGAN 13
DONATION LEAVE; AND 14

(II) PAYS AN ELIGIBLE EMP LOYEE AT LEAST 100% OF THE 15
EMPLOYEE’S REGULAR WAGES DURING ANY ORGAN DONATION LEAVE TAKEN BY THE 16
ELIGIBLE EMPLOYEE. 17

(B) A QUALIFIED EMPLOYER THAT EMPLOYS AN ELIGI BLE EMPLOYEE MAY 18
CLAIM A CREDIT AGAINST THE STATE INCOME TAX IN THE AMOUNT STATED ON THE 19
TAX CREDIT CERTIFICATE ISSUED UNDER SUBSECTION (D) OF THIS SECTION. 20

(C) (1) FOR THE TAXABLE YEAR IN WHIC H AN ELIGIBLE EMPLOY EE 21
TAKES PAID ORGAN DONATION LEAVE, THE CREDIT ALLOWED UNDER THIS SECTION 22
EQUALS 100% OF THE WAGES PAID TO THE ELIGIBLE EMPLOYEE DURING THE FIRST 23
12 WEEKS OF THE ORGAN DONATION LEAVE. 24

(2) IF THE CREDIT ALLOWED UNDER THIS SECTION EXCE EDS THE 25
STATE INCOME TAX FOR THAT TAXABLE YEAR , ANY UNUSED CREDIT MA Y BE 26
CARRIED FORWARD AND APPLIED FOR SUCCEEDI NG TAXABLE YEARS UNT IL THE 27
EARLIER OF: 28

(I) THE DATE ON WHICH THE FULL AMOUNT OF THE CREDIT IS 29
USED; OR 30

SENATE BILL 793 3

(II) THE DATE OF THE EXPIRATION OF THE 3RD TAXABLE YEAR 1
AFTER THE TAXABLE YEAR FOR WHICH THE CREDIT WAS ALLOWED. 2

(D) (1) SUBJECT TO THE LIMITA TIONS OF THIS SUBSEC TION, ON 3
APPLICATION BY A QUA LIFIED EMPLOYER, THE DEPARTMENT SHALL ISSUE A TAX 4
CREDIT CERTIFICATE IN THE AMOUNT ALLOWABLE UNDER SUBSECTION (C) OF THIS 5
SECTION. 6

(2) THE APPLICATION SHALL INCLUDE: 7

(I) THE NAME OF THE QUALIFIED EMPLOYER; 8

(II) EVIDENCE THAT THE QUALIFIED EMPLOYER IS: 9

1. DULY ORGANIZED AND I N GOOD STANDING IN T HE 10
JURISDICTION UNDER THE LAWS UNDER WHICH IT IS ORGANIZED; 11

2. CURRENT IN THE PAYME NT OF ALL OBLIGATION S TO 12
THE STATE OR ANY UNIT OR SUBDIVISION OF THE STATE; AND 13

3. NOT IN DEFAULT UNDER THE TERMS OF ANY 14
CONTRACT WITH, INDEBTEDNESS TO, OR GRANT FROM THE STATE OR ANY UNIT OR 15
SUBDIVISION OF THE STATE; 16

(III) PROOF OF THE WAGES PAID TO EACH ELIGIBLE EMPLOYEE; 17

(IV) PROOF OF THE PAID OR GAN DONATION LEAVE B ENEFITS 18
ACCRUED TO EACH ELIGIBLE EMPLOYEE; AND 19

(V) ANY OTHER INFORMATIO N THAT THE DEPARTMENT 20
REQUIRES. 21

(3) THE DEPARTMENT SHALL NOTI FY THE QUALIFIED EMP LOYER 22
WITHIN 45 DAYS AFTER THE RECEIPT OF THE APPLICATION OF THE DEPARTMENT’S 23
APPROVAL OR DENIAL OF THE APPLICATION. 24

(E) ON OR BEFORE JANUARY 31 EACH TAXABLE YEAR, THE DEPARTMENT 25
SHALL REPORT TO THE COMPTROLLER ON THE TAX CREDIT CERTIFICATES ISSUED 26
UNDER THIS SECTION DURING THE PRIOR TAXABLE YEAR. 27

(F) THE DEPARTMENT AND THE COMPTROLLER JOINTLY S HALL ADOPT 28
REGULATIONS TO IMPLEMENT THE PROVISIONS OF THIS SECTION. 29

4 SENATE BILL 793

SECTION 2. AND BE IT FURTHER ENACTED, That this Act shall take effect July 1
1, 2026, and shall be applicable to all taxable years beginning after December 31, 2025. 2