Since the State of Maryland is indirectly paying a portion of each homeowner's property taxes to the local governments whenever a homeowner's tax credit is granted, the State in turn has the legal right to enact a special definition of what constitutes "income" to be reported under this tax credit program. The following definitions on income are either specifically written into the tax credit enabling law itself or have been further elaborated upon by the Maryland Courts or by formal administrative regulations in COMAR.

1. Every applicant must report the "COMBINED GROSS INCOME" for their household. "COMBINED INCOME" means "the combined gross income of all individuals who reside in a dwelling, except an individual who is a dependent according to the Internal Revenue Code or those paying reasonable fixed charges." [Section 9-104(a)(3)]. Income information must be reported for the applicant and spouse and all other occupants of the dwelling unless such other occupants can be claimed as dependents on the applicant's Federal Income tax return or unless they are paying reasonable fixed charges such as rent or room and board to the applicants.
2. "GROSS INCOME" means "total income from all sources, for the calendar year immediately preceding the taxable year, whether or not included in the definitions of gross income for Federal or State tax purposes, including but not limited to benefits under the Social Security Act or Railroad Retirement Act as these acts may be amended from time to time, the aggregate of gifts in excess of $300, alimony, support money, nontaxable strike benefits, public assistance received in cash grants, pensions, annuities, unemployment insurance benefits, and workmen's compensation benefits. The term includes the net income received from business, rental, or other endeavors. A loss from business, rental or other endeavors may not be used in the determination of gross income. The term does not include any income tax refund received from the State or the Federal Government." [Section 9-104(a)(7)].
3. Income from all sources must be reported by the applicant even if the items are not taxable on either the Federal or State income tax returns. Id.
4. The Maryland Court of Special Appeals has affirmed the principle that eligibility for a tax credit "shall be calculated on the basis of all monies coming into the household during the year", regardless of the source of taxability of those monies. State Department of Assessments and Taxation v. Glick, 47 Md. App. 150, 422 A.2d 34 (1980).
5. Nontaxable retirement benefits such as Social Security and Railroad Retirement specifically are included in the definition of gross income written into the tax credit law. [See Section 9-104(a)(7) and the Court's opinion in Glick, supra].
6. The return of a Federal retiree's own pension contributions during the first three years of retirement is countable as income for purposes of the property tax credit program. Glick, supra.
7. Total income, whether taxable for Federal or State income tax purposes or not, shall be reported on the tax credit application and requires; [COMAR 18.07.01.02(F)(1)].
   
   1. The counting of 100% of capital gains and dividends before the Federal income tax exclusions;
   2. The disallowance of capital losses in excess of capital gains;
   3. The disallowance of depreciation as a business deduction;
   4. The disallowance of all Federal adjustments to personal income except employees business expenses (which are documented by the filing of Federal Form 2106) and the penalty for early withdrawal of savings.
8. The total income to be reported does not include lump sum insurance payments. Id.