1576                                     LAWS OF MARYLAND                                 Ch. 748

280.

(c) There shall be subtracted from federal adjusted gross income: (1) interest or
dividends on obligations of the United States and its territories and possessions or
of any authority, commission or instrumentality of the United States and any
other income to the extent includable in gross income for federal income tax
purposes, but exempt from State income taxes under the laws of the United States;

(2)  to the extent included, undistributed corporate income attributed to individuals
from small business corporations, as defined by Section 1371 of the Internal
Revenue Code, as amended from time to time, which elected to be taxed in
accordance with the provisions of subchapter "S" of the Internal Revenue Code;

(3)  payments received by policemen and firemen from pension systems for injuries
or disabilities arising out of and in the course of their employment as policemen or
firemen; and (4) for all taxable years ending after December 31, 1966, amounts
received by an individual who has attained the age of 65 years before the close of
the taxable year, as an annuity, pension, or endowment under a private, municipal,
State or federal employee retirement system, and included in such individual's
federal adjusted gross income, this subtraction [not to exceed one thousand five
hundred dollars ($1,500.00) less) SHALL NOT EXCEED AN AMOUNT
EQUAL TO THE AVERAGE ANNUAL BENEFIT RECEIVED IN
MARYLAND BY PERSONS WHO RETIRED AT THE AGE OF 65 OR
OLDER UNDER THE SOCIAL SECURITY AND RAILROAD
RETIREMENT ACTS FOR THE PRIOR CALENDAR YEAR. THE
COMPTROLLER SHALL DETERMINE THE AMOUNT OF THE
AVERAGE BENEFIT ANNUALLY AND FOR THE PURPOSES OF THIS
SUBPARAGRAPH MAY ALLOW THE SUBTRACTION TO THE
NEAREST $100. THE ALLOWED SUBTRACTION SHALL BE REDUCED
BY the amount of old age, survivors, or disability benefits received under the
Social Security Act, the Railroad Retirement Act, or both, as the case may be;
and (5) in the case of persons retired prior to January 1, 1967, payments received
which represent unrecovered contributions to a retirement system over and above
any amount of such contributions remaining to be recovered tax free on the federal
return, limited to an amount which together with the amount of any tax-free
exclusion in the federal return does not exceed the exclusion which was permitted
under the laws and regulations of this State prior to the year 1967; and (6) to the
extent included, the amount of any refunds of income taxes paid to the State of
Maryland, any other state, the District of Columbia, and any political subdivision
of the State of Maryland and of any other state; and (7) to the extent included,
distributions to beneficiaries of accumulated income on which income tax has been
paid by a fiduciary to this State.

SECTION 2. AND BE IT FURTHER ENACTED, That all provisions of this
Act shall apply to all taxable years ending after December 31, 1972.

SECTION [[2]] 3. AND BE IT FURTHER ENACTED, That this Act shall
take effect July 1, 1973.

Approved May 24, 1973.