Martin O'Malley, Governor

Ch. 3

(IV) $600 IF FEDERAL ADJUSTED GROSS INCOME FOR THE
TAXABLE YEAR IS GREATER THAN $250.000.

10-601.

Except as PROVIDED IN § 10-105(D) OF THIS TITLE AND EXCEPT AS
otherwise provided in this subtitle, a person shall compute the State income tax by
applying the tax [rate] RATES in § 10-105 of this title to Maryland taxable income.

10-704.

(a)       (1) An individual may claim a credit against the State income tax for a
taxable year in the amount determined under subsection (b) of this section for earned
income.

(2) An individual may claim a credit against the county income tax for
a taxable year in the amount determined under subsection (c) of this section for earned
income.

(b)       (1) Except as provided in paragraph (2) of this subsection and subject
to subsection (d) of this section, the credit allowed against the State income tax under
subsection (a)(1) of this section is the lesser of:

(i) 50% of the earned income credit allowable for the taxable
year under § 32 of the Internal Revenue Code; or

(ii) the State income tax for the taxable year.

(2) [(i)] An individual with one or more dependents that may be
claimed as exemptions may claim a refund in the amount, if any, by which [the
applicable percentage specified in subparagraph (ii) of this paragraph] 25% of the
earned income credit allowable FOR THE TAXABLE YEAR under § 32 of the Internal
Revenue Code exceeds the State income tax for the taxable year.

[(ii) The applicable percentage of the earned income credit
allowable under § 32 of the Internal Revenue Code to be used for purposes of
determining the refund provided under this paragraph is:

1.         16% for a taxable year beginning after December 31,

2000 but before January 1, 2002;

2.         16% for a taxable year beginning after December 31,

2001 but before January 1, 2003;

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