4                                              LAWS OF MARYLAND                                 Ch. 1

(c) There shall be subtracted from federal adjusted
gross income:

(1)   [interest] 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)   [payments] 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;

(3)   [for] FOR all taxable years ending after
December 31, 1972, the lessor of:

(i) [amounts] 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, or

(ii) [an] AN amount equal to the maximum
annual benefits permitted for persons who retired at the age
of 65 or older under the Social Security Act for the prior
calendar year 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. The Comptroller shall determine the amount of the
maximum benefit annually. For the purposes of this
paragraph, the Comptroller may allow the subtraction to the
nearest $100;

(4)  [in] 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;

(5)  [for] FOR all taxable years beginning after
December 31, 1978, any income reported on the individual's
federal income tax return due to a withdrawal or withdrawals
from a retirement plan established under the Self-Employed
Individuals Tax Retirement Act of 1962, Public Law 87-792,
as amended, popularly known as a Keogh Plan, to the extent
that the withdrawal or withdrawals consist of funds on which
State income taxes were paid under the applicable State law
at the time the funds were contributed to the plan, or of
interest or dividends on which State income taxes were paid