MaxGhenis · Oct 6, 2026
diff --git a/changelog.d/md-capital-gains-surtax-net-capital-gain.fixed.md b/changelog.d/md-capital-gains-surtax-net-capital-gain.fixed.md
@@ -0,0 +1 @@
+Tax Maryland's 2% capital gains surtax on net capital gain as the Internal Revenue Code defines it (net long-term gain over net short-term loss, with capital gain distributions, for the head and spouse), test the $350,000 threshold on federal rather than Maryland AGI, and add an input for gain from excepted assets (Form 502CG line 8).
diff --git a/policyengine_us/parameters/gov/states/md/tax/income/capital_gains/surtax_applies.yaml b/policyengine_us/parameters/gov/states/md/tax/income/capital_gains/surtax_applies.yaml
@@ -4,10 +4,12 @@ values:
   2025-01-01: true
 metadata:
   reference:
+    - title: Md. Code, Tax-General § 10-105(a)(3) and (4)
+      href: https://mgaleg.maryland.gov/mgawebsite/Laws/StatuteText?article=gtg&section=10-105&enactments=false
+    - title: 2025 Md. Laws ch. 604 (HB 352), § 3, amending Tax-General § 10-105(a)
+      href: https://mgaleg.maryland.gov/2025RS/Chapters_noln/CH_604_hb0352e.pdf#page=163
     - title: Maryland 2025 Resident Tax Forms and Instructions - Capital Gains Surtax
       href: https://www.marylandcomptroller.gov/content/dam/mdcomp/tax/instructions/2025/resident-booklet.pdf#page=22
-    - title: Maryland House Bill 352 - Budget Reconciliation and Financing Act of 2025
-      href: https://mgaleg.maryland.gov/2025RS/Chapters_noln/CH_604_hb0352e.pdf#page=163
   unit: bool
   period: year
   label: Maryland capital gains surtax applies
diff --git a/policyengine_us/parameters/gov/states/md/tax/income/capital_gains/surtax_rate.yaml b/policyengine_us/parameters/gov/states/md/tax/income/capital_gains/surtax_rate.yaml
@@ -3,10 +3,12 @@ values:
   2025-01-01: 0.02
 metadata:
   reference:
-    - title: Maryland 2025 Resident Tax Forms and Instructions - Capital Gains Surtax
-      href: https://www.marylandcomptroller.gov/content/dam/mdcomp/tax/instructions/2025/resident-booklet.pdf#page=22
-    - title: Maryland House Bill 352 - Budget Reconciliation and Financing Act of 2025
+    - title: Md. Code, Tax-General § 10-105(a)(3)(i)2
+      href: https://mgaleg.maryland.gov/mgawebsite/Laws/StatuteText?article=gtg&section=10-105&enactments=false
+    - title: 2025 Md. Laws ch. 604 (HB 352), § 3, amending Tax-General § 10-105(a)(3)
       href: https://mgaleg.maryland.gov/2025RS/Chapters_noln/CH_604_hb0352e.pdf#page=163
+    - title: 2025 Maryland Resident Income Tax Instructions, line 21b
+      href: https://www.marylandcomptroller.gov/content/dam/mdcomp/tax/instructions/2025/resident-booklet.pdf#page=22
   unit: /1
   period: year
   label: Maryland capital gains surtax rate
diff --git a/policyengine_us/parameters/gov/states/md/tax/income/capital_gains/surtax_threshold.yaml b/policyengine_us/parameters/gov/states/md/tax/income/capital_gains/surtax_threshold.yaml
@@ -1,12 +1,14 @@
-description: Maryland applies the capital gains surtax to filers with adjusted gross income exceeding this threshold.
+description: Maryland applies the capital gains surtax to filers with federal adjusted gross income exceeding this threshold.
 values:
   2025-01-01: 350_000
 metadata:
   reference:
-    - title: Maryland 2025 Resident Tax Forms and Instructions - Capital Gains Surtax
-      href: https://www.marylandcomptroller.gov/content/dam/mdcomp/tax/instructions/2025/resident-booklet.pdf#page=22
-    - title: Maryland House Bill 352 - Budget Reconciliation and Financing Act of 2025
+    - title: Md. Code, Tax-General § 10-105(a)(4)
+      href: https://mgaleg.maryland.gov/mgawebsite/Laws/StatuteText?article=gtg&section=10-105&enactments=false
+    - title: 2025 Md. Laws ch. 604 (HB 352), § 3, amending Tax-General § 10-105(a)(4)
       href: https://mgaleg.maryland.gov/2025RS/Chapters_noln/CH_604_hb0352e.pdf#page=164
+    - title: 2025 Maryland Form 502CG instructions, general instructions
+      href: https://www.marylandcomptroller.gov/content/dam/mdcomp/tax/forms/2025/502cg.pdf#page=2
   unit: currency-USD
   period: year
-  label: Maryland capital gains surtax AGI threshold
+  label: Maryland capital gains surtax federal AGI threshold
Original file line number	Diff line number	Diff line change
		@@ -0,0 +1 @@
		Tax Maryland's 2% capital gains surtax on net capital gain as the Internal Revenue Code defines it (net long-term gain over net short-term loss, with capital gain distributions, for the head and spouse), test the $350,000 threshold on federal rather than Maryland AGI, and add an input for gain from excepted assets (Form 502CG line 8).