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Highlights from the 2016 Maryland Legislative Session

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Members of the Maryland Association of Certified Public Accountants (MACPA) provided testimony on many of the bills involving tax issues during the 2016 Maryland Legislative Session. The MACPA was instrumental in introducing and promoting the bill to change the Maryland Corporate due date to match the federal due date. Several professionals from Ellin & Tucker are active in the various committees of the MACPA and were in Annapolis during session to testify in person. Over 130 CPA’s attended CPA day in Annapolis in January to request their legislators consider various bills being submitted during the legislative session.

Jerry E. Beard, CPA, MST, a supervisor at Ellin & Tucker and past Chairperson of the state tax committee of the MACPA, has the following to share from the Legislative Session:

  • The underpayment interest rate will reduce by one half percent per year starting in 2017 until it reaches 9% in 2023. The 2016 rate remains at 13%. (House Bill 422)
  • The Employer must provide the W-2 to the employees and to the State by January 31. The state copies previously were due to the State by February 28. This measure is to assist in the prevention of payments to persons making fraudulent return filings. (Senate Bill 185 and House Bill 1333)
  • The income tax subtraction for contributions to a Maryland College Savings Plan previously was only available to the account holder. The subtraction will now be available to all contributions to the accounts.   (Senate Bill 374 and House Bill 335)
  • The College Affordability Act of 2016 will authorize a subtraction modification for contributions and a refundable credit up to $5,000 for payment of undergraduate student debt. (Senate Bill 676 and House Bill 1014)
  • The refund intercept program for persons with an outstanding arrest warrant now a statewide program. The initial program only included Baltimore City, Anne Arundel and Washington Counties. (Senate Bill 425)
  • The Corporate filing date is changed to match the federal due date of the 15th day of the fourth month after year end. The due date is April 15 for calendar year returns. The federal due date for partnerships has changed to the 15th day of the third month. The federal due date for calendar year partnership returns is March 15. (Senate Bill 288 and House Bill 484)
  • House Bill 1148 requires the collection of data to study the Retirement Income Subtraction. Currently, the distributions from an Individual Retirement Account (IRA) are not eligible for the subtraction. This study will assist in determining the various sources of retirement income and the feasibility of adding the IRA distributions to the subtraction.
  • Bills that didn’t pass included Taxpayer Protection Act (antifraud provisions by Comptroller), single sales factor apportionment, personal income tax rate reductions, Sales Tax exemptions for sales by Boy and Girl Scouts, decoupling of the estate tax from the federal recoupling and combined reporting.

Jerry E. Beard, CPA, MST, is a Supervisor in the Tax Department of Ellin & Tucker. He has extensive hands-on experience providing tax compliance, planning, and consulting for a variety of clients with privately owned business operating in various industries and is also well versed in various tax services for trusts, estates and high net-worth individuals. .

 

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