Although Maryland lawmakers are still gathering information about the impact of the federal tax bill signed by President Trump in December 2017, General Assembly leaders and Gov. Hogan have begun working on a plan to ensure residents’ tax bills don’t skyrocket.
Many small business owners across the country have been relieved to see the tax bill pass, but in some states—such as Maryland, California, New York, and New Jersey—the new law could mean a tax hike because it reduces or eliminates certain tax deductions.
Under the Maryland Democrats’ preliminary three-part plan:
- Taxpayers could continue to take personal exemptions on state tax bills (despite the fact that these exemptions are eliminated for federal taxes).
- Maryland’s estate tax would be disconnected from federal policy so that state taxes would apply to inheritances of $5 million or more rather than estates of $11.2 million or more.
- Maryland taxpayers could make ‘charitable donations’ to a state education fund, which could then be listed as a tax credit on their state tax bills.
Meanwhile, Gov. Hogan, whose recently proposed $44 billion budget contains no new tax increases, has also announced he will submit his own plan to shield Marylanders from a tax hike, pending the state comptroller’s review of the federal tax bill changes. State lawmakers did not work with Hogan on their plan, but said they would welcome his input.