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2024 Legislative Recap: Income Tax Law

This year’s legislative session has resulted in several changes to the Maryland Personal Income Tax system. New filing rules and upcoming changes to the requirements of Income Tax Preparers are important updates to be aware of.

Electronic filing requirement

New legislation will require that personal income tax returns for tax periods after December 31st, 2029 must be filed electronically. There are numerous exceptions included in this law, the most notable being any taxpayers with disabilities recognized by the Americans with Disabilities Act, taxpayers 65 years or older, and single or dependent taxpayers with less than $200,000 in income, with that limit increasing to $400,000 for tax returns filed under other filing statuses.

This legislation also requires that after December 31st, 2026, many other types of tax returns, including tax returns of corporations with more than 15 employees, must be filed electronically.

Finally, the law also prohibits tax preparation businesses and tax preparation software companies from charging consumers an additional fee for electronic filing of returns, as electronic filing is common industry practice.

Stop Scam Preparers Act

In 2026, the Maryland State Board of Individual Tax Preparers will publish a code of ethics for tax preparers in the state of Maryland, and will gain enforcement power over violations of that code of ethics in partnership with the Comptroller. The MSBITP will be welcoming tax preparer input in formulating this code, so get in touch if you are a tax preparer who wants to be heard in this process.

Additionally, this law has passed additional penalties for preparing a tax return without proper certification. The penalty will be applied for each improperly prepared tax return, so unauthorized businesses that take advantage of taxpayers around filing season may now face significant risks.