SENATE BILL 578
Q3 1lr0799
By: Senator McCray
Introduced and read first time: January 29, 2021
Assigned to: Budget and Taxation
A BILL ENTITLED
1 AN ACT concerning
2 Income Tax – Retroactive Changes Under the Federal CARES Act – Addition
3 Modification
4 FOR the purpose of providing an addition modification under the Maryland income tax for
5 certain amounts related to certain net operating loss deductions, certain excess
6 business losses, and certain business interest expense deductions; making
7 conforming changes; and generally relating to the Maryland income tax.
8 BY repealing and reenacting, without amendments,
9 Article – Tax – General
10 Section 10–205(a) and 10–306(a)
11 Annotated Code of Maryland
12 (2016 Replacement Volume and 2020 Supplement)
13 BY adding to
14 Article – Tax – General
15 Section 10–205(m) and (n)
16 Annotated Code of Maryland
17 (2016 Replacement Volume and 2020 Supplement)
18 BY repealing and reenacting, with amendments,
19 Article – Tax – General
20 Section 10–306(b)
21 Annotated Code of Maryland
22 (2016 Replacement Volume and 2020 Supplement)
23 SECTION 1. BE IT ENACTED BY THE GENERAL ASSEMBLY OF MARYLAND,
24 That the Laws of Maryland read as follows:
25 Article – Tax – General
EXPLANATION: CAPITALS INDICATE MATTER ADDED TO EXISTING LAW.
[Brackets] indicate matter deleted from existing law.
*sb0578*
2 SENATE BILL 578
1 10–205.
2 (a) In addition to the modification under § 10–204 of this subtitle, the amounts
3 under this section are added to the federal adjusted gross income of a resident to determine
4 Maryland adjusted gross income.
5 (M) FOR A TAXABLE YEAR BEGINNING AFTER DECEMBER 31, 2020, BUT
6 BEFORE JANUARY 1, 2022, THE ADDITION UNDER SUBSECTION (A) OF THIS SECTION
7 INCLUDES:
8 (1)
THE AGGREGATE OF THE AMOUNTS FOR EACH TAXABLE YEAR
9 BEGINNING AFTER DECEMBER 31, 2013, BUT BEFORE JANUARY 1, 2021, EQUAL TO
10 THE DIFFERENCE BETWEEN THE TAXPAYER’S NET OPERATING LOSS DEDUCTION AS
11 DETERMINED UNDER § 172(A) OF THE INTERNAL REVENUE CODE BEFORE THE
12 AMENDMENTS MADE BY § 2303 OF THE FEDERAL CORONAVIRUS AID, RELIEF, AND
13 ECONOMIC SECURITY ACT AND THE TAXPAYER’S NET OPERATING LOSS DEDUCTION
14 AS DETERMINED UNDER § 172(A) OF THE INTERNAL REVENUE CODE AFTER THE
15 AMENDMENTS MADE BY § 2303 OF THE FEDERAL CORONAVIRUS AID, RELIEF, AND
16 ECONOMIC SECURITY ACT;
17 (2)THE AGGREGATE OF THE AMOUNTS FOR EACH TAXABLE YEAR
18 BEGINNING AFTER DECEMBER 31, 2017, BUT BEFORE JANUARY 1, 2021, EQUAL TO
19 THE AMOUNT BY WHICH THE TAXPAYER’S EXCESS BUSINESS LOSS EXCEEDS THE
20 EXCESS BUSINESS LOSS LIMITATION AS DETERMINED UNDER § 461(L) OF THE
21 INTERNAL REVENUE CODE WITHOUT REGARD TO THE AMENDMENTS MADE BY §
22 2304 OF THE FEDERAL CORONAVIRUS AID, RELIEF, AND ECONOMIC SECURITY
23 ACT, BUT WITH REGARD TO THE TECHNICAL AMENDMENT MADE BY § 2304(B)(2)(B)
24 OF THE FEDERAL CORONAVIRUS AID, RELIEF, AND ECONOMIC SECURITY ACT; AND
25 (3) THE AGGREGATE OF THE AMOUNTS FOR EACH TAXABLE YEAR
26 BEGINNING AFTER DECEMBER 31, 2018, BUT BEFORE JANUARY 1, 2021, EQUAL TO
27 THE AMOUNT BY WHICH THE TAXPAYER’S INTEREST EXPENSE DEDUCTION EXCEEDS
28 THE LIMITATION ON BUSINESS INTEREST UNDER § 163(J) OF THE INTERNAL
29 REVENUE CODE WITHOUT REGARD TO THE AMENDMENTS MADE BY § 2306 OF THE
30 FEDERAL CORONAVIRUS AID, RELIEF, AND ECONOMIC SECURITY ACT, AND AS
31 CALCULATED ON A SEPARATE ENTITY BASIS.
32 (N) FOR A TAXABLE YEAR BEGINNING AFTER DECEMBER 31, 2020, BUT
33 BEFORE JANUARY 1, 2026, THE ADDITION UNDER SUBSECTION (A) OF THIS SECTION
34 INCLUDES THE AMOUNT EQUAL TO THE TAXPAYER’S EXCESS BUSINESS LOSS AS
35 DETERMINED UNDER § 461(L) OF THE INTERNAL REVENUE CODE WITHOUT REGARD
36 TO THE AMENDMENTS MADE BY § 2304 OF THE FEDERAL CORONAVIRUS AID,
37 RELIEF, AND ECONOMIC SECURITY ACT, BUT WITH REGARD TO THE TECHNICAL
38 AMENDMENT MADE BY § 2304(B)(2)(B) OF THE FEDERAL CORONAVIRUS AID,
SENATE BILL 578 3
1 RELIEF, AND ECONOMIC SECURITY ACT, IF THE LOSS INCLUDES EXCESS FARM LOSS
2 AS DEFINED UNDER § 461(J) OF THE INTERNAL REVENUE CODE.
3 10–306.
4 (a) In addition to the modification under § 10–305 of this subtitle, the amounts
5 under this section are added to the federal taxable income of a corporation to determine
6 Maryland modified income.
7 (b) The addition under subsection (a) of this section includes the additions
8 required for an individual under:
9 (1) § 10–205(b) of this title (Enterprise zone wage credit, employment
10 opportunity credit, disability credit, and qualified ex–felon employee credit);
11 (2) § 10–205(c) of this title (Reforestation and timber stand modification);
12 (3) § 10–205(e) of this title (Net operating loss modification);
13 (4) § 10–205(g) of this title (Unlicensed child care facility operating
14 expenses); [and]
15 (5) § 10–205(i) of this title (Maryland research and development tax credit);
16 (6)§ 10–205(M) OF THIS TITLE (NET OPERATING LOSS DEDUCTION,
17 EXCESS BUSINESS LOSS, INTEREST EXPENSE DEDUCTION); AND
18 (7) § 10–205(N) OF THIS TITLE (EXCESS BUSINESS LOSS).
19 SECTION 2. AND BE IT FURTHER ENACTED, That this Act shall take effect July
20 1, 2021.