Individual Income Tax Insights: Maryland Prepares to Refund Taxpayers after Losing ‘Wynne’


In the wake of Md. State Comp. of the Treas. v. Wynne, it is anticipated that taxpayers will seek refunds, and Maryland’s legislature prepared a bill in response to the Wynne decision. On May 29, the Maryland legislature enacted H.B. 72 and it became law without the governor’s signature.

To align Maryland’s law with the U.S. Supreme Court’s decision in Wynne, H.B. 72 allows for a tax credit against both the state and the county income tax, applicable to tax years beginning after Dec. 31, 2014.

The new law also requires the payment of tax refunds and interest attributable to taxable years beginning after Dec. 31, 2005 and before Jan. 1, 2015, if the Attorney General advises the Comptroller to do so.

The money will be paid to taxpayers out of a reserve account established under Maryland law. Local governments will then reimburse the account for their share of refunds and interest paid to taxpayers affected by the Maryland law deemed unconstitutional in Wynne.

Although there are still more details to iron out, it is expected that the Maryland Comptroller will soon enough develop a plan for distributing refunds to taxpayers.

According to Dominic Perella in a June 1 webcast hosted by Ernst & Young, the Wynnes need only provide a perfunctory filing with the comptroller to claim their tax refund. In time, we will find out whether the process is as simple for other taxpayers.

Continue the conversation on Bloomberg BNA’s State Tax Group’s LinkedIn page: What is the most efficient way for Maryland to issue refunds to taxpayers affected by the pre-Wynne income tax regime?

For more information about the Wynne case, check out the Individual Income Tax Navigator at Maryland 3.6.1., which is part of the Premier State Tax Library.

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