ROBERT L. EHRLICH, JR., Governor                               Ch. 94

(I) 30% FOR A TAXABLE YEAR ENDING AFTER DECEMBER 31, 2003
AND BEGINNING BEFORE JANUARY 1, 2005;

(II) 40% FOR A TAXABLE YEAR ENDING AFTER DECEMBER 31, 2004
AND BEGINNING BEFORE JANUARY 1, 2006;

(III) 60% FOR A TAXABLE YEAR ENDING AFTER DECEMBER 31, 2005
AND BEGINNING BEFORE JANUARY 1, 2007; AND

(IV) 80% FOR A TAXABLE YEAR ENDING AFTER DECEMBER 31, 2007
AND BEGINNING BEFORE JANUARY 1, 2008.

10-209.

(a) In this section:

(1) "employee retirement system" means a plan:

(i) established and maintained by an employer for the benefit of its
employees; and

(ii) qualified under § 401(a), § 403, or § 457(b) of the Internal
Revenue Code; and

(2) "employee retirement system" does not include:

(i) an individual retirement account or annuity under § 408 of the
Internal Revenue Code;

(ii) a Roth individual retirement account under § 108A of the
Internal Revenue Code;

(iii) a rollover individual retirement account;

(iv) a simplified employee pension under Internal Revenue Code §
408(k); or

(v) an ineligible deferred compensation plan under § 457(f) of the
Internal Revenue Code.

(b) [To] SUBJECT TO SUBSECTION (D) OF THIS SECTION, TO determine
Maryland adjusted gross income, if, on the last day of the taxable year, a resident is at
least 65 years old or is totally disabled or the resident's spouse is totally disabled, an
amount is subtracted from federal adjusted gross income equal to the lesser of:

(1) the cumulative or total annuity, pension, or endowment income from
an employee retirement system included in federal adjusted gross income; or

(2) the maximum annual benefit under the Social Security Act computed
under subsection (e) of this section, less any payment received as old age, survivors, or
disability benefits under the Social Security Act, the Railroad Retirement Act, or both.

(c) For purposes of subsection (b)(2) of this section, the Comptroller:

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