Except as provided in Subtitle 4 of this title, the Maryland adjusted gross income of an individual is the individual's federal adjusted gross income for the taxable year as adjusted under this Part II of this subtitle. §10-204. IN EFFECT (a) To the extent excluded from federal adjusted gross income, the amounts under this section are added to the federal adjusted gross income of a resident to determine Maryland adjusted gross income. (b) The addition under subsection (a) of this section includes interest or dividends, less related expenses, attributable to an obligation or security of: (1) another state; or (2) a political subdivision or authority of another state. (c) (1) If exempted by federal law or by treaty from federal but not State tax on income, the addition under subsection (a) of this section includes salary, wages, or other compensation for personal services. (2) If exempted by federal law or by treaty from federal but not State tax on income, the addition under subsection (a) of this section includes interest or dividends attributable to an obligation of: (i) the United States or a foreign government; or (ii) an authority, a commission, an instrumentality, a possession, or a territory of the United States or of a foreign government. (d) (1) In this subsection, "lump-sum distribution", "minimum distribution allowance", and "total taxable amount" have the meanings stated in § 402(e) of the Internal Revenue Code. (2) The addition under subsection (a) of this section includes the amount by which the total taxable amount of a lump-sum distribution exceeds the sum of: (i) 60% of the capital gains portion of the total taxable amount; and (ii) the minimum distribution allowance. (3) For purposes of this subsection, the capital gains portion of the total taxable amount is determined by multiplying the total taxable amount by a fraction: (i) the numerator of which is the number of calendar years of active participation by the employee in the plan before January 1, 1974; and (ii) the denominator of which is the number of calendar years of active participation by the employee in the plan. (e) The addition under subsection (a) of this section includes the oil percentage depletion allowance claimed under § 613 or § 613A of the Internal Revenue Code. (f) The addition under subsection (a) of this section includes the amount of pickup contributions of a member of a retirement or pension system: (1) provided for under § 21-313 of the State Personnel and Pensions Article; and (2) excluded from federal adjusted gross income under § 414(h)(2) of the Internal Revenue Code. (g) (1) In this subsection, "remaindermen" includes a person whose remainder interest is vested, contingent, or vested subject to divestment. (2) The addition under subsection (a) of this section includes any capital loss derived from the sale or other disposition of intangible personal property that is held in trust, if the proceeds thereof are added to the principal of the trust, and if all the remaindermen in being are: (i) nonresidents during the entire taxable year; or (ii) corporations not doing business in the State. (3) The addition required under paragraph (2) of this subsection does not apply if there are no remaindermen of the trust in being. (h) The addition under subsection (a) of this section includes the amount deducted under § 222 of the Internal Revenue Code for qualified tuition and related expenses paid during the taxable year. (i) Repealed. (j) The addition under subsection (a) of this section includes any amount deducted for costs, as defined under § 10-732 of this title, for security clearance administrative expenses and construction and equipment costs incurred to construct or renovate a sensitive compartmented information facility if an amount is included in the application for a credit under § 10-732 of this title. (k) For a taxable year beginning after December 31, 2012, the addition under subsection (a) of this section includes the amount of income of an electing small business trust, as defined under § 1361(e)(1) of the Internal Revenue Code, that is subject to the special taxing rules under § 641(c) of the Internal Revenue Code. (l) The addition under subsection (a) of this section includes any amount deducted as a donation, as defined under § 10-736 or § 10-749 of this title, to the extent that the amount of the donation is included in an application for a credit that is certified under § 10-736 or § 10-749 of this title. §10-204. // EFFECTIVE DECEMBER 31, 2028 PER CHAPTER 77 OF 2022 // (a) To the extent excluded from federal adjusted gross income, the amounts under this section are added to the federal adjusted gross income of a resident to determine Maryland adjusted gross income. (b) The addition under subsection (a) of this section includes interest or dividends, less related expenses, attributable to an obligation or security of: (1) another state; or (2) a political subdivision or authority of another state. (c) (1) If exempted by federal law or by treaty from federal but not State tax on income, the addition under subsection (a) of this section includes salary, wages, or other compensation for personal services. (2) If exempted by federal law or by treaty from federal but not State tax on income, the addition under subsection (a) of this section includes interest or dividends attributable to an obligation of: (i) the United States or a foreign government; or (ii) an authority, a commission, an instrumentality, a possession, or a territory of the United States or of a foreign government. (d) (1) In this subsection, "lump-sum distribution", "minimum distribution allowance", and "total taxable amount" have the meanings stated in § 402(e) of the Internal Revenue Code. (2) The addition under subsection (a) of this section includes the amount by which the total taxable amount of a lump-sum distribution exceeds the sum of: (i) 60% of the capital gains portion of the total taxable amount; and (ii) the minimum distribution allowance. (3) For purposes of this subsection, the capital gains portion of the total taxable amount is determined by multiplying the total taxable amount by a fraction: (i) the numerator of which is the number of calendar years of active participation by the employee in the plan before January 1, 1974; and (ii) the denominator of which is the number of calendar years of active participation by the employee in the plan. (e) The addition under subsection (a) of this section includes the oil percentage depletion allowance claimed under § 613 or § 613A of the Internal Revenue Code. (f) The addition under subsection (a) of this section includes the amount of pickup contributions of a member of a retirement or pension system: (1) provided for under § 21-313 of the State Personnel and Pensions Article; and (2) excluded from federal adjusted gross income under § 414(h)(2) of the Internal Revenue Code. (g) (1) In this subsection, "remaindermen" includes a person whose remainder interest is vested, contingent, or vested subject to divestment. (2) The addition under subsection (a) of this section includes any capital loss derived from the sale or other disposition of intangible personal property that is held in trust, if the proceeds thereof are added to the principal of the trust, and if all the remaindermen in being are: (i) nonresidents during the entire taxable year; or (ii) corporations not doing business in the State. (3) The addition required under paragraph (2) of this subsection does not apply if there are no remaindermen of the trust in being. (h) The addition under subsection (a) of this section includes the amount deducted under § 222 of the Internal Revenue Code for qualified tuition and related expenses paid during the taxable year. (i) Repealed. (j) The addition under subsection (a) of this section includes any amount deducted for costs, as defined under § 10-732 of this title, for security clearance administrative expenses and construction and equipment costs incurred to construct or renovate a sensitive compartmented information facility if an amount is included in the application for a credit under § 10-732 of this title. (k) For a taxable year beginning after December 31, 2012, the addition under subsection (a) of this section includes the amount of income of an electing small business trust, as defined under § 1361(e)(1) of the Internal Revenue Code, that is subject to the special taxing rules under § 641(c) of the Internal Revenue Code. (l) The addition under subsection (a) of this section includes any amount deducted as a donation, as defined under § 10-736 of this title, to the extent that the amount of the donation is included in an application for a credit that is certified under § 10-736 of this title. §10-205. IN EFFECT (a) In addition to the modification under § 10-204 of this subtitle, the amounts under this section are added to the federal adjusted gross income of a resident to determine Maryland adjusted gross income. (b) The addition under subsection (a) of this section includes the amount of a credit claimed under: (1) § 10-702 of this title for wages paid to an employee in an enterprise zone; and (2) § 10-704.7 of this title or § 8-216 of this article for wages paid and qualified child care or transportation expenses incurred with respect to a qualified employee with a disability. (c) In the year after decertification of land used for commercial forest land under § 5-219 of the Natural Resources Article, the addition under subsection (a) of this section includes the amount allowed in a prior taxable year as a subtraction under § 10-208(i) of this subtitle for reforestation or timber stand improvement. (d) The addition under subsection (a) of this section includes the amount of a credit that is claimed under § 10-703 of this title and is based on a tax paid by an S corporation to a state that does not recognize the federal tax treatment of an S corporation. (d-1) The addition under subsection (a) of this section includes the amount of a credit that is claimed under § 10-703 of this title and is based on a tax imposed on any pass-through entity by another state that is deductible in determining the pass- through entity's income under the Internal Revenue Code. (e) (1) (i) In this subsection the following words have the meanings indicated. (ii) "Loss year" means the taxable year in which there occurs a net operating loss that is carried back or carried over in whole or in part to another taxable year. (iii) "Net addition modification" means, for any taxable year, the amount by which the sum of the addition modifications required under this title exceeds the sum of the subtraction modifications allowed under this title. (iv) "Net operating loss deduction" means a net operating loss deduction allowed for federal income tax purposes under § 172 of the Internal Revenue Code. (2) If a net operating loss deduction is allowed for the taxable year, the addition under subsection (a) of this section for the taxable year includes, for each loss year as to which a portion of the net operating loss deduction is attributable, an amount equal to the lesser of: (i) the amount of the net operating loss deduction attributable to that loss year; or (ii) the amount by which the total net operating loss in the loss year is less than the sum of: 1. the net addition modification for that loss year; and 2. the cumulative net operating loss deductions attributable to that loss year allowed for the taxable year and all prior taxable years. (f) The addition under subsection (a) of this section includes 50% of the sum of tax preference items under § 10-222 of this subtitle. (g) The addition under subsection (a) of this section includes the amount claimed and allowed as a deduction for federal income tax purposes for expenses attributable to: (1) operating a family child care home in the State without having the registration required by § 9.5-304 of the Education Article; or (2) operating a child care center in the State without having the license required by § 9.5-405 of the Education Article. (h) (1) (i) In this subsection the following words have the meanings indicated. (ii) "Account holder" means an account holder as defined in § 18-1901, § 18-19A-01, or § 18-19B-01 of the Education Article. (iii) "Qualified beneficiary" has the meaning stated in § 18- 1901 of the Education Article. (iv) "Qualified designated beneficiary" means a qualified designated beneficiary as defined in § 18-19A-01 or § 18-19B-01 of the Education Article. (v) "Qualified higher education expenses" has the meaning stated in § 529 of the Internal Revenue Code. (2) The addition under subsection (a) of this section includes the amount of: (i) any refund received in the taxable year by an account holder under a prepaid contract in accordance with the Maryland Senator Edward J. Kasemeyer Prepaid College Trust; or (ii) any distribution received in the taxable year by an account holder under a prepaid contract in accordance with the Maryland Senator Edward J. Kasemeyer Prepaid College Trust or under an investment account in accordance with the Maryland Senator Edward J. Kasemeyer College Investment Plan or the Maryland Broker-Dealer College Investment Plan that is not used on behalf of the qualified beneficiary or qualified designated beneficiary for qualified higher education expenses. (3) The amount of the addition required under this subsection shall be reduced by any amount included in the individual's federal adjusted gross income as a result of the refund or distribution. (4) The cumulative amount of the addition under this subsection for the taxable year and all prior taxable years may not exceed the cumulative amount allowed as a subtraction: (i) under § 10-208(n) of this subtitle for the taxable year and all prior taxable years for the account holder's payments to the prepaid contract under which the refund or distribution is received; or (ii) under § 10-208(o) of this subtitle for the taxable year and all prior taxable years for contributions made by an account holder to an investment account under which the distribution is received. (i) The addition under subsection (a) of this section includes the amount of a credit claimed under § 10-721 of this title for Maryland qualified research and development expenses. (j) The addition under subsection (a) of this section includes the amount of a credit claimed under § 10-726 of this title for research and development expenses for cellulosic ethanol technology. (k) The addition under subsection (a) of this section includes, if a taxpayer sold or exchanged a property for which a subtraction modification enacted by Chapters 544 and 545 of the Acts of the General Assembly of 2012, as amended, or Chapter 231 of the Acts of the General Assembly of 2017 has been claimed, the difference between: (1) the taxpayer's federal adjusted gross income as reportable under the federal Mortgage Forgiveness Debt Relief Act of 2007, as amended, prior to its expiration on December 31, 2012, and without regard to the date limitation in § 108(a)(1)(e) of the Internal Revenue Code; and (2) the taxpayer's federal adjusted gross income as claimed in the taxable year. (l) (1) (i) In this subsection the following words have the meanings indicated. (ii) "ABLE account contributor" means an individual who contributes money to an ABLE account as defined in § 18-19C-01 of the Education Article. (iii) "ABLE account holder" means the holder of an account as defined in § 18-19C-01 of the Education Article. (iv) "Designated beneficiary" has the meaning stated in § 18- 19C-01 of the Education Article. (v) "Qualified disability expenses" has the meaning stated in § 18-19C-01 of the Education Article. (2) The addition under subsection (a) of this section includes the amount of: (i) any refund received in the taxable year by an ABLE account contributor under the Maryland ABLE Program; or (ii) any distribution received in the taxable year by an ABLE account holder in accordance with the Maryland ABLE Program that is not used for the benefit of the designated beneficiary for qualified disability expenses. (3) The amount of the addition required under this subsection shall be reduced by any amount included in the individual's federal adjusted gross income as a result of a refund or distribution. (4) The cumulative amount of the addition under this subsection for the taxable year and all prior taxable years may not exceed the cumulative amount allowed as a subtraction under § 10-208(v) of this subtitle for the taxable year and all prior taxable years for contributions made by an ABLE account contributor to an ABLE account under the Maryland ABLE Program under which the distribution is received. (m) The addition under subsection (a) of this section includes the amount of credit that is claimed under § 10-701.1 of this title for the amount of tax paid by a pass-through entity under § 10-102.1 of this title and is attributable to the member's share of tax on the member's share of the pass-through entity's taxable income, as defined in § 10-102.1(a)(8) of this title. §10-205. // EFFECTIVE JUNE 30, 2027 PER CHAPTER 14 OF 2021 // (a) In addition to the modification under § 10-204 of this subtitle, the amounts under this section are added to the federal adjusted gross income of a resident to determine Maryland adjusted gross income. (b) The addition under subsection (a) of this section includes the amount of a credit claimed under: (1) § 10-702 of this title for wages paid to an employee in an enterprise zone; and (2) § 10-704.7 of this title or § 8-216 of this article for wages paid and qualified child care or transportation expenses incurred with respect to a qualified employee with a disability. (c) In the year after decertification of land used for commercial forest land under § 5-219 of the Natural Resources Article, the addition under subsection (a) of this section includes the amount allowed in a prior taxable year as a subtraction under § 10-208(i) of this subtitle for reforestation or timber stand improvement. (d) The addition under subsection (a) of this section includes the amount of a credit that is claimed under § 10-703 of this title and is based on a tax paid by an S corporation to a state that does not recognize the federal tax treatment of an S corporation. (d-1) The addition under subsection (a) of this section includes the amount of a credit that is claimed under § 10-703 of this title and is based on a tax imposed on any pass-through entity by another state that is deductible in determining the pass- through entity's income under the Internal Revenue Code. (e) (1) (i) In this subsection the following words have the meanings indicated. (ii) "Loss year" means the taxable year in which there occurs a net operating loss that is carried back or carried over in whole or in part to another taxable year. (iii) "Net addition modification" means, for any taxable year, the amount by which the sum of the addition modifications required under this title exceeds the sum of the subtraction modifications allowed under this title. (iv) "Net operating loss deduction" means a net operating loss deduction allowed for federal income tax purposes under § 172 of the Internal Revenue Code. (2) If a net operating loss deduction is allowed for the taxable year, the addition under subsection (a) of this section for the taxable year includes, for each loss year as to which a portion of the net operating loss deduction is attributable, an amount equal to the lesser of: (i) the amount of the net operating loss deduction attributable to that loss year; or (ii) the amount by which the total net operating loss in the loss year is less than the sum of: 1. the net addition modification for that loss year; and 2. the cumulative net operating loss deductions attributable to that loss year allowed for the taxable year and all prior taxable years. (f) The addition under subsection (a) of this section includes 50% of the sum of tax preference items under § 10-222 of this subtitle. (g) The addition under subsection (a) of this section includes the amount claimed and allowed as a deduction for federal income tax purposes for expenses attributable to: (1) operating a family child care home in the State without having the registration required by § 9.5-304 of the Education Article; or (2) operating a child care center in the State without having the license required by § 9.5-405 of the Education Article. (h) (1) (i) In this subsection the following words have the meanings indicated. (ii) "Account holder" means an account holder as defined in § 18-1901, § 18-19A-01, or § 18-19B-01 of the Education Article. (iii) "Qualified beneficiary" has the meaning stated in § 18- 1901 of the Education Article. (iv) "Qualified designated beneficiary" means a qualified designated beneficiary as defined in § 18-19A-01 or § 18-19B-01 of the Education Article. (v) "Qualified higher education expenses" has the meaning stated in § 529 of the Internal Revenue Code. (2) The addition under subsection (a) of this section includes the amount of: (i) any refund received in the taxable year by an account holder under a prepaid contract in accordance with the Maryland Senator Edward J. Kasemeyer Prepaid College Trust; or (ii) any distribution received in the taxable year by an account holder under a prepaid contract in accordance with the Maryland Senator Edward J. Kasemeyer Prepaid College Trust or under an investment account in accordance with the Maryland Senator Edward J. Kasemeyer College Investment Plan or the Maryland Broker-Dealer College Investment Plan that is not used on behalf of the qualified beneficiary or qualified designated beneficiary for qualified higher education expenses. (3) The amount of the addition required under this subsection shall be reduced by any amount included in the individual's federal adjusted gross income as a result of the refund or distribution. (4) The cumulative amount of the addition under this subsection for the taxable year and all prior taxable years may not exceed the cumulative amount allowed as a subtraction: (i) under § 10-208(n) of this subtitle for the taxable year and all prior taxable years for the account holder's payments to the prepaid contract under which the refund or distribution is received; or (ii) under § 10-208(o) of this subtitle for the taxable year and all prior taxable years for contributions made by an account holder to an investment account under which the distribution is received. (i) Abrogated. (j) The addition under subsection (a) of this section includes the amount of a credit claimed under § 10-726 of this title for research and development expenses for cellulosic ethanol technology. (k) The addition under subsection (a) of this section includes, if a taxpayer sold or exchanged a property for which a subtraction modification enacted by Chapters 544 and 545 of the Acts of the General Assembly of 2012, as amended, or under Chapter 231 of the Acts of the General Assembly of 2017 has been claimed, the difference between: (1) the taxpayer's federal adjusted gross income as reportable under the federal Mortgage Forgiveness Debt Relief Act of 2007, as amended, prior to its expiration on December 31, 2012, and without regard to the date limitation in § 108(a)(1)(e) of the Internal Revenue Code; and (2) the taxpayer's federal adjusted gross income as claimed in the taxable year. (l) (1) (i) In this subsection the following words have the meanings indicated. (ii) "ABLE account contributor" means an individual who contributes money to an ABLE account as defined in § 18-19C-01 of the Education Article. (iii) "ABLE account holder" means the holder of an account as defined in § 18-19C-01 of the Education Article. (iv) "Designated beneficiary" has the meaning stated in § 18- 19C-01 of the Education Article. (v) "Qualified disability expenses" has the meaning stated in § 18-19C-01 of the Education Article. (2) The addition under subsection (a) of this section includes the amount of: (i) any refund received in the taxable year by an ABLE account contributor under the Maryland ABLE Program; or (ii) any distribution received in the taxable year by an ABLE account holder in accordance with the Maryland ABLE Program that is not used for the benefit of the designated beneficiary for qualified disability expenses. (3) The amount of the addition required under this subsection shall be reduced by any amount included in the individual's federal adjusted gross income as a result of a refund or distribution. (4) The cumulative amount of the addition under this subsection for the taxable year and all prior taxable years may not exceed the cumulative amount allowed as a subtraction under § 10-208(v) of this subtitle for the taxable year and all prior taxable years for contributions made by an ABLE account contributor to an ABLE account under the Maryland ABLE Program under which the distribution is received. (m) The addition under subsection (a) of this section includes the amount of credit that is claimed under § 10-701.1 of this title for the amount of tax paid by a pass-through entity under § 10-102.1 of this title and is attributable to the member's share of tax on the member's share of the pass-through entity's taxable income, as defined in § 10-102.1(a)(8) of this title.
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