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Bill would let Marylanders exclude scam losses from taxable income, AARP backs measure
Summary
Delegate Vogel and AARP Maryland supported legislation to prevent victims of scams and fraud from being taxed on stolen funds; proponents said victims should present a police report and that technical language (e.g., penalty of perjury) could be added to prevent misuse.
Delegate Vogel and AARP Maryland told the Ways and Means Committee on March 4 that victims of scams should not be taxed on stolen funds they never received.
The bill would allow victims to exclude amounts lost to fraud from their Maryland taxable income, aligning state tax treatment with proposed federal reforms and recent policy conversations. Witnesses described cases in which victims owed state and federal taxes on funds stolen through romance or transfer scams. Karen Morgan of AARP Maryland said the measure would prevent “a cruelty on top of cruelty” and cited cases where victims faced unexpected tax liabilities and Medicare premium increases tied to income thresholds.
Committee members asked practical questions about proof and fraud prevention. Delegate Buckel and others asked how taxpayers would document claims; the sponsor said a police report would be required, and committee members suggested further safeguards such as an affidavit or penalty of perjury to deter false claims. The sponsor and AARP indicated willingness to work on the technical documentation standards.
No formal vote occurred; sponsors said they would continue to refine proof standards with committee staff.
