We Marylanders are screwed.
If you take the new higher Federal standard deduction, you must take the Maryland standard deduction. The Maryland legislature generously rewarded us by raising the Maryland standard deduction in 2018 from $4000 for Married Jointly to $4500 after years of no inflationary growth.
As a result, many of us will find we are still better off itemizing, even if our Federal itemized deductions are less than the new standard deduction.
I cannot get a straight answer out of the Maryland Comptroller's office as to how they will compute Maryland itemized deductions given the $10,000 SALT and Property Tax Cap.
Anyone here know?
Let's use an example:
2018 Maryland State and Local Tax Withheld: $15,000 Property Tax Paid: $8,000 Ignore other deductions for this exampleUnder the prior tax law, I would deduct the combined $23,000 from Federal income. Then on my Maryland return, they would subtract SALT, so I would deduct the $8,000 Property Tax.
Under the new SALT/Property Tax Cap of $10,000, I want to know if I can still fully deduct the $8,000 Property Tax from my Maryland income.
Maryland doesn't yet have 2018 tax forms on their web site.
Anyone know?