Local Earned Income Tax Credit - Calculation - County Income Tax Rate

New county tax-credit math for low earners

Maryland changes its county earned income credit calculation for tax years beginning after December 31, 2024. The law takes effect July 1, 2025, and covers individual filers and married couples filing jointly. Counties with tax brackets use their lowest rate; counties with flat rates use the rate for your income and filing status. The nonrefundable credit equals your federal earned income credit multiplied by 10 times that county rate, capped at your county income tax. The federal credit amount includes any amount otherwise blocked by Internal Revenue Code Section 32(m). A resident can get a refundable county credit only if county law allows it. That refund equals the amount by which the federal credit multiplied by 5 times the county rate exceeds county income tax. Counties must notify the Comptroller by July 1 before the first tax year offering the refundable credit. Refunds reduce that county’s income tax revenue.