A self-supporting taxpayer who is 65 or blind at any age can claim only the personal exemption allowable for that taxable year plus an additional personal exemption of $1,000 and $1,000 for spouse, if any. For those at least 65 who are nonspousal dependents of another taxpayer, however, the personal exemption for that year is doubled. While the special exemption for taxpayers age 65 or blind has remained frozen at $1,000, the personal exemption increased each year from $1,850 for 2000, $2,100 for 2001 and $2,400 for 2002. Therefore, the dollar difference between a doubled exemption ($4,800) and a single exemption ($2,400) plus $1,000, or $3,400, left the aged taxpayer liable for an additional $1,400 in taxable income for 2002.
The state personal income tax is $4.75 percent. When a local jurisdiction or "piggyback" tax is added, the vast majority of Marylanders are now paying taxes on more than 7.5 percent of their net income. So most taxpayers who were 65 or over in 2002 will pay more than $100 in state and local income taxes for 2002 from which a person claiming a 65-year-old non-spousal dependent was exempt. This unfair tax liability doubles, of course, for a tax-paying couple, both of whom are 65, compared to two persons of the same age who are taken as non-spousal dependents by another taxpayer. This information was supplied by Frank Chase, state legislative chair of the Maryland Federation of National Association of Retired Federal Employees, (NARFE).