Income Tax - Itemized Deductions - Charitable Donations

HB 33 would exempt charitable donations from a 7.5% reduction applied to itemized deductions for high-income Maryland taxpayers. Specifically, it removes the requirement to reduce itemized deductions by 7.5% of income exceeding $200,000 (or $100,000 for married filing separately) for charitable contributions claimed under federal law. This change directly affects Maryland residents who itemize deductions on their state tax returns and earn above these thresholds. The bill modifies Maryland’s tax code to align charitable giving with federal deduction rules, effective for 2026 tax years. It does not alter the deduction limits themselves but prevents charitable donations from being subject to the income-based reduction.