Income Tax Subtraction

Who May Claim the Law Enforcement Subtraction Modification?

Beginning January 1, 2016, “law enforcement officers” can claim an income tax subtraction modification for the first $5,000 of income earned if:

(1) The law enforcement officer resides and works in the same political subdivision; and
(2) The crime rate in the political subdivision exceeds the State’s crime rate.

A “law enforcement officer” is an individual who is authorized in his or her official capacity to make arrests and is a member of a law enforcement agency, including officers serving under a probationary status or at the pleasure of the appointing authority of a county or municipal corporation. Federal law enforcement officers do not qualify for the subtraction modification.

A list of the political subdivisions that have crime rates exceeding the State’s crime rate is provided to the Comptroller’s Office by the Maryland Police Training and Standards Commission. You can review whether your political subdivision exceeds the State’s crime rate here. (Currently #29 on the list)

A law enforcement officer may claim the subtraction, if applicable, by reporting it on Form 502 and Form 502SU. The code is 00 (zero/zero).

The current list of qualifying agencies for the 2023 tax year can be found at the below link to the MD Comptroller’s Office under tab 29. 

https://marylandtaxes.gov/individual/online-services/income-tax-faq.php

In the 2016 session of the Maryland General Assembly HB1016 the Public Safety and Policing Workgroup bill was passed. The bill contained a section (page 35) that allows for a subtraction of the first $5,000 of earned income by a law enforcement officer who resides in the political subdivision in which the law enforcement officer is employed and the crime rate in the political subdivision exceeds the state’s crime rate.

As always please consult your tax adviser for professional advice. This is provided as information only.