(2) a member of a retirement system or pension system who is eligible for
coverage under Title 35, Subtitle 4 of this article may not contribute toward the purchase
of an annuity contract under the program.]

Article - Tax - General

10-204.

(f) The addition under subsection (a) of this section includes the amount of
pickup contributions of a member of a retirement or pension system:

(1)     provided for under [Article 73B, § 1-302(e)] § 21-313 OF THE STATE
PERSONNEL AND PENSIONS ARTICLE; and

(2)     excluded from federal adjusted gross income under § 414(h)(2) of the
Internal Revenue Code.

10-207.

(m) The subtraction under subsection (a) of this section includes that portion of
an annuity received by a retiree of a retirement or pension system:

(1)     for which pickup contributions were made under [Article 73B, §
1-302(e) of the Code] § 21-313 OF THE STATE PERSONNEL AND PENSIONS ARTICLE;
and

(2)     that is included in federal adjusted gross income under § 414(h)(2) of
the Internal Revenue Code.

10-905.

(c) "Payment subject to withholding" means:

(1)     an annuity or sick pay payment described in § 3402(o) of the Internal
Revenue Code;

(2)     income that is subject to the income tax and is distributed by a fiduciary
to a nonresident alien;

(3)     a payment of winnings derived from wagering in the State if the payment
is subject to withholding under § 3402 of the Internal Revenue Code; and

(4)     a payment of a death benefit by the Board of Trustees of the
[Maryland] State Retirement and Pension [Systems] SYSTEM.

10-907.

(c) Income tax is not required to be withheld on that portion of a death benefit to
be excluded from federal adjusted gross income, including amounts to be transferred by
the beneficiary or the Board of Trustees of the [Maryland] State Retirement and
Pension [Systems] SYSTEM to an eligible retirement plan as defined in § 402(c)(8)(b) of
the Internal Revenue Code in a nontaxable rollover. The State Retirement Agency is
authorized to obtain such representation as it deems necessary to determine if the
beneficiary will make a nontaxable rollover.

- 2247 -

WILLIAM DONALD SCHAEFER, Governor

Ch. 468