Maryland House Bill 712 Raises Standard Deduction to Adjust State Income Tax Calculations for Baltimore Residents

The Maryland General Assembly approved House Bill 712, which increases the standard deduction used on state income tax returns for single and joint filers below set income thresholds. The measure applies to Baltimore residents who submit annual state returns and shifts the amount of income subject to state taxation.

Lawmakers advanced the bill during the 2026 session as part of a larger package of cost related measures tracked by the legislature. The change follows repeated updates to federal tax parameters that Maryland has historically aligned with on several deduction categories.

Daily Budget Calculations for City Households

Baltimore residents who claim the standard deduction rather than itemizing will see a different starting point when they complete Form 502. A household that previously subtracted a fixed amount from gross income will now subtract a higher figure before applying state tax rates.

The legislation states that the revised deduction amounts will be recalculated each year using the consumer price index published by the U.S. Bureau of Labor Statistics. State revenue officials will incorporate the new figures into withholding tables that employers in Baltimore use for payroll.

Policy analysts say the adjustment affects the timing of refunds and the size of any balance due when residents file in the spring. The Department of Legislative Services analysis attached to the bill notes that the change takes effect for tax year 2027 returns filed in 2028.

Remaining Steps Before Implementation

The governor must sign the enrolled bill before the end of the current month. After enactment, the comptroller will publish updated instructions and software specifications for tax preparers who serve Baltimore taxpayers.