What's New for the 2025 Tax Filing Season (2024 Tax Year)
Here are some of the most important changes and benefits affecting the approximately 3.5 million taxpayers working on their 2024 Maryland income tax returns.
Note: For forms, visit the 2024 Individual Tax Forms or Business Tax Forms pages.
2024 Business Income Tax Instruction Booklets
Number | Title | Description |
---|---|---|
Corporation | Maryland Income Tax Form Instructions for Corporations | Instructions for filing corporation income tax returns for the calendar year or any other tax year or period beginning in 2024. |
Pass-Through Entity | Maryland Income Tax Form Instructions for Pass-Through Entities | Instructions for filing pass-through entity income tax returns for the calendar year or any other tax year or period beginning in 2024. |
Electing Pass-Through Entity | Maryland Income Tax Form Instructions for Electing Pass-Through Entities | Instructions for filing Electing pass-through entity income tax returns for the calendar year or any other tax year or period beginning in 2024. |
Opening of the 2025 Tax Filing Season
The IRS began accepting all Business tax returns on TBD.
Maryland started accepting all Business tax returns on TBD.
The IRS begins accepting all Individual tax returns on TBD.
Maryland begins accepting all Individual tax returns on TBD.
Claiming Business Income Tax Credits
For tax years beginning after December 31, 2012, you must file your tax return electronically in order to claim a business tax credit unless you submit a waiver from the electronic filing requirement. To request a waiver from filing the Form 500CR electronically, you must submit a completed Form 500CRW Waiver Request For Electronic Filing of Form 500CR and it must be attached to Form 500CR in the filing of your return.
Beginning with Tax Year 2015 certain individual taxpayers may elect to claim the Community Investment Tax Credit and/or the Endow Maryland Tax Credit on Maryland Form 502CR, and thus avoid the electronic filing requirement. Read instructions to Form 502CR to see if you qualify for this election.
Filing Deadline
Your income tax return is due April 15, 2025.
Business income tax return dates vary. See Filing Extensions and Deadlines for Corporations
New Tax Rates
Local Tax Rate Changes - For calendar year 2025, local rates for some counties have been adjusted (Anne Arundel, Calvert, Cecil, and St. Mary’s). View a complete list of current city and local counties' tax rate and see note for Anne Arundel and Frederick Counties.
Exemptions and Deductions
There have been no changes affecting personal exemptions on the Maryland returns.
Personal Exemption Amount - The exemption amount of $3,200 begins to be phased out if your federal adjusted gross income is more than $100,000 ($150,000 for joint taxpayers). The $3,200 exemption is phased out entirely when the income exceeds $150,000 ($200,000 for joint taxpayers). See Instruction 10 in the Resident tax booklet for the reduced amounts, or review the page, Determine Your Personal Income Tax Exemptions. The additional exemption of $1,000 remains the same for age and blindness.
Dependent Form 502B - will be required to be attached to Form 502, Form 505 and Form 515 to determine what exemptions you are entitled to claim.
Standard Deduction - The tax year 2024 standard deduction is a maximum value of $2,700 for single taxpayers and to $5,450 for head of household, a surviving spouse, and taxpayers filing jointly.
Itemized Deduction Limitation - The State of Maryland follows the new federal tax law treatment to suspend the itemized deduction limitation threshold (Pease Limitation). This means that high-income taxpayers are not required to reduce their itemized deductions using the itemized deduction worksheet used in prior years.
Should I take the standard deduction or itemize? - The federal tax reform of 2017 significantly raised the federal standard deduction. Under current Maryland law, if you take the standard deduction the federal level, you cannot itemize at the Maryland level. You may take the federal standard deduction, while this may reduce your federal tax liability, it may result in an increase to your Maryland income tax liability. The Comptroller's Office encourages you to run your income tax returns under both deduction methods, and to compare the results of taking the standard deduction versus itemizing your deductions, to see which method causes the lowest overall tax liability.
Limitation on deduction for state and local tax - Federal tax reform limited the amount you can deduct for state and local taxes. You cannot claim more than $10,000 ($5,000 for married filing separately) for state and local taxes you paid. The new federal limitation impacts your Maryland return because you must addback the amount of state income taxes you claimed as federal itemized deductions. The addback is limited to $10,000 ($5,000 for married filing separately) and is reported on line 17b of the Maryland Form 502. Maryland will accept any reasonable interpretation of the limitation reported on line 17b. A reasonable interpretation of the law includes the following example: you, a single filer, paid $8,000 in real property taxes and $4,000 in Maryland state income taxes, Maryland will accept an addback of state income tax of $2,000 on Line 17b. In this example, the real estate taxes make up $8,000 of your $10,000 limitation and only $2,000 are required to be added back as state income taxes.
Tax Forms, Instructions & Booklets
The resident tax booklets contain both the tax forms and the instructions for each major form. The tax forms on the Web site are available separately from the resident and nonresident instruction booklets.
All of our tax forms have been reformatted to ensure enhanced readability when paper forms are filed. This format has increased the number of pages of some of the tax returns. Make sure that you attach all pages of your return to ensure that your return is processed correctly.
- Tax Forms and Instructions Online - Tax forms and instructions for Individual and Business taxpayers are available here online at Maryland Tax Forms and Instructions (business and individuals).
- Tax Booklets at Libraries - We have provided a limited supply of tax booklets to a number of libraries throughout the State that have requested them.
- Tax Booklets at Comptroller's Taxpayer Service Offices - Tax booklets are available at all of our local taxpayer service offices.
- Request a Tax Booklet - Taxpayers may request a resident or nonresident tax booklet by sending an e-mail to taxforms@marylandtaxes.gov.
Subtractions
Increased pension exclusion - Maryland's maximum pension exclusion, which is available to qualifying taxpayers who are age 65 or older; are totally and permanently disabled; or have a spouse who is totally and permanently disabled, is $39,500 for tax year 2024.
Pension exclusion for retired forest/park/wildlife ranger - The pension exclusion available to public safety personnel in prior years is now available only to retired forest, park, and wildlife rangers of the United States, the State of Maryland, or a political subdivision of Maryland. (The pension exclusion for other public safety personnel is still available, but is now calculated as a separate subtraction. See below.) To claim this pension exclusion, a retired forest, park, or wildlife ranger must be (1) age 55 or older, (2) not 65 or older, totally disabled, or have a spouse who is totally disabled, and (3) included on your federal return taxable income received as a pension, annuity, or endowment from an “employee retirement system” qualified under Section 401(a), 403, or 457(b) of the Internal Revenue Code. Use WORKSHEET (13E) to calculate this pension exclusion, up to a maximum of $15,000. An individual may not claim both this subtraction and the standard pension exclusion.
Subtraction modification updates for tax year 2024:
There were two new subtractions for tax year 2024. However, there have been modifications to a few.
Code Letter yd. Amount of the benefit payment provided to an individual or the family member of an individual as a result of the individual being injured or killed in the collapse of the Francis Scott Key Bridge.
- Code Letter ye. Amount of tuition assistance provided to a student who is an eligible dependent or surviving spouse of a fallen transportation worker. A “fallen transportation worker” means an individual (1) whose occupation is in the construction, rehabilitation, or operation of a transportation facility or transportation facilities project in Maryland, and (2) who died, on or after January 1, 2022, as a result of an accident occurring while the individual was performing any job duty necessary for the construction, maintenance, rehabilitation, or operation of a transportation facility or transportation facilities project in Maryland. Tuition assistance that qualifies for this subtraction is paid under the Fallen Transportation Workers Scholarship Program.
Also, there have been modifications to a few.
- Code Letter va.Th e Honorable Louis L. Goldstein Volunteer Police, Fire, Rescue and Emergency Medical Services Personnel Subtraction Modification Program. $7,000 for each taxpayer who is a qualifying volunteer as certified by a public safety organization. Public safety organizations are Maryland police agencies, Maryland fire, rescue or emergency medical services organizations or auxiliary organizations, the U.S. Coast Guard Auxiliary, Maryland Defense Force or Maryland Civil Air Patrol. Attach a copy of the certification.
- Code Letter aa. Payments from a pension system, or a death benefit required by a Maryland municipal or county collective bargaining agreement, to the surviving spouse or other beneficiary of a law enforcement officer or firefighter whose death arises out of or in the course of their employment.
- Code letter oo. Up to $5,000 of income earned by an eligible law enforcement officer. A law enforcement officer means a person who in their official capacity has the legal authority to make arrests and includes those who serve in a probationary status and those who serve at the pleasure of a county or municipal corporation appointing authority. The following law enforcement officers are eligible to claim this subtraction:
- any law enforcement officer residing in a political subdivision in which the officer is employed, if the crime rate in the political subdivision exceeds the State’s crime rate;
- a member of the Maryland Transportation Authority Police or any other State (not local or federal) law enforcement unit, if the officer resides in a political subdivision in which the crime rate exceeds the State’s crime rate;
- a member of the Maryland-National Capital Park Police, if the officer resides in a political subdivision that lies wholly or partly within the Maryland-Washington Regional District and the crime rate of the political subdivision exceeds the State’s crime rate; or
- a member of the Washington Suburban Sanitary Commission Police Force, if the officer resides in a political subdivision that lies wholly or partly within the Washington Suburban Sanitary District and the crime rate of the political subdivision exceeds the State’s crime rate.
- Code Letter uu. Income related to the sale or redevelopment of race courses in Maryland. For income realized prior to June 1, 2024, the subtraction includes the following: (1) the amount of gain recognized as a result of the (direct or indirect) sale of property within Laurel Park in Anne Arundel County, Pimlico Race Course in Baltimore City, and Bowie Race Course Training Center in Prince George’s County; and (2) the amount of income recognized as a result of any expenditure of funds (directly or indirectly) by the State of Maryland, Baltimore City, or Anne Arundel County with respect to the Laurel Park site or Pimlico site. For income realized on or after June 1, 2024, the subtraction includes the following: (1) the amount of gain recognized as a result of the (direct or indirect) sale of property within Pimlico Race Course in Baltimore City and Bowie Race Course Training Center in Prince George’s County; and (2) the amount of income recognized as a result of any expenditure of funds (directly or indirectly) by the State of Maryland or Baltimore City with respect to the Pimlico site.
- Code letter xx. Donations to Diaper Banks and Other Charitable Entities Sunset Extension – House Bill 490: This bill extends the sunset date of the diaper bank income tax subtraction through tax year 2026.
- The mileage rate for certain qualifying charitable use of a car on Form 502V has increased as follows: 67 cents per mile for the period of 01/01/2024 through 12/31/2024.
Individual Taxpayer Changes
- Interest Rate Increase: Interest is due at the rate of 11.4825% annually or 0.9568% per month for any month or part of a month that a tax is paid after the original due date of the 2024 return but before January 1, 2026. Click here for assistance in calculating interest for tax paid on or after January 1, 2026. Enter any interest due on the appropriate line of your tax return.
- There are two new subtraction modifications and five updated subtraction modifications. For more information, see Instruction 13 (Line 13, Code Letters va., aa., oo., uu., xx., yd., and ye.).
- Addition Modifications: There is no new addition modifications.
- Tax Credits: There are two updated tax credits for qualified individuals. For more information, see Instruction 18 (Line 24 Code Letter g) and Instruction 21 (Line 43 #5).
- Many state revenue agencies, including Maryland, are requesting additional information in an effort to combat stolen-identity tax fraud and to protect you and your tax refund. If you and your spouse have a driver's license or state issued identification card, please provide the requested information from it. The return will not be rejected if you do not provide a driver's license or state-issued identification. If you provide this information, it may help to identify you as the taxpayer.
Business Taxpayer Changes
Addition Modifications: There are no new addition modifications.
Subtraction Modifications: There are changes to two subtraction modifications.
- Cannabis Reform – Alterations – House Bill 253: This bill alters the subtraction for ordinary and necessary business expenses related to a cannabis business by removing the reference to "medical" cannabis businesses and adding a reference to "registered cannabis businesses."
- Horse Racing Facility Ownership and Construction – House Bill 1524: This bill amends the subtraction for income recognized before, on, or after June 1, 2024, from the sale of property within or the expenditure of government funds on Laurel Park in Anne Arundel County, Pimlico Race Course in Baltimore City, or Bowie Race Course Training Center in Prince George’s County.
Tax Credits: There are changes to two tax credits.
- Budget Reconciliation and Financing Act of 2024 – Senate Bill 362: This bill repeals the Small Business Relief Tax Credit for paid sick and safe leave, effective June 1, 2024. Credit certificates issued prior to June 1, 2024 may be used to claim the credit.
- Catalytic Revitalization Project Tax Credit Alterations – Senate Bill 394: This bill specifies the credit certificate may now be issued by the Maryland Department of Housing and Community Development in one of two ways: (1) for a project issued a single tax credit on completion, the taxpayer may claim a credit of 20% of the amount stated on the certificate for 5 consecutive years; and (2) for a phased project issued on completion of a phase, the taxpayer may claim 100% of the amount stated on the certificate.
Tax Professional Changes
Please see the latest updated list of approved eFile software vendors for individuals and businesses.
Click here for more information regarding new business tax credits.