Maryland Pension Exclusion, now $30,600. for those 65 and older

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    David Franz
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    Maryland Pension Exclusion, now $30,600.
    franz david
    <bcfdretirees@comcast.net>
    7:46 AM

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    Maryland Pension Exclusion
    If you are 65 or older or totally disabled (or your spouse is totally disabled), you may qualify for Maryland’s maximum pension exclusion of $30,600 under the conditions described in Instruction 13 of the Maryland resident tax booklet. If you’re eligible, you may be able to subtract some of your taxable pension and retirement annuity income from your federal adjusted gross income.

    This subtraction applies only if:

    You were 65 or older or totally disabled, or your spouse was totally disabled, on the last day of the tax year; and
    You included on your federal return income received as a pension, annuity or endowment from an “employee retirement system.” Please note that these include qualified defined benefit and defined contribution pension plans, 401(a) plans, 401(k) plans, 403(b) plans, and 457(b) plans.
    A traditional IRA, a Roth IRA, a simplified employee plan (SEP), a Keogh Plan or an ineligible deferred compensation plan does not qualify.
    Complete the Pension Exclusion Computation Worksheet shown in Instruction 13 in the Maryland resident tax booklet. Be sure to report all benefits received under the Social Security Act and/or Railroad Retirement Act on line 3 of the pension exclusion worksheet – not just those benefits you included in your federal adjusted gross income.

    To receive the benefit of the pension exclusion, be sure to transfer the amount from line 5 of the worksheet to line 10 of Form 502, and complete the remainder of your return, following the line-by-line instructions.

    Pension Exclusion for Retired Correctional Officer, Law Enforcement Officer or Fire, Rescue, and Emergency Services Personnel
    Note: An individual taxpayer may not claim BOTH the standard Pension Exclusion and the Pension Exclusion for Retired Correctional Officer, Law Enforcement Officer or Fire, Rescue, or Emergency Services Personnel.

    If you are 65 or older on the last day of the calendar year, you are totally disabled, or your spouse is totally disabled, and you have received qualified pension income, you should complete the Pension Exclusion Computation Worksheet (13A)regardless of your prior work history. It is permissible for one spouse to claim the standard Pension Exclusion and the other spouse to claim the Pension Exclusion for Retired Correctional Officer, Law Enforcement Officer or Fire, Rescue, or Emergency Services Personnel if each spouse meets the applicable required criteria.

    If you meet the below criteria, use the Retired Correctional Officer, Law Enforcement Officer or Fire, Rescue, or Emergency Services Personnel Pension Exclusion Worksheet (13E)to calculate your eligible pension exclusion:

    You were 55 or over on the last day of the tax year, AND
    You were not 65 or older, or totally disabled, or have a spouse who is totally disabled, AND
    You 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, AND
    The retirement income is attributable to your service as a correctional officer, law enforcement officer or fire, rescue, or emergency services personnel of the United States, the State of Maryland, or a political subdivision of Maryland.
    Each spouse who meets the above requirements may be entitled to the exclusion. If each spouse is eligible, complete a separate column on theRetired Correctional Officer, Law Enforcement Officer or Fire, Rescue, or Emergency Services Personnel Pension Exclusion Worksheet (13E). Combine your allowable exclusions from line 8 of the worksheet and enter the total amount on line 10b ofForm 502.

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