NO, you are not "exempt" from state taxes...from the review's I've seen (like this one)
New 2022 Maryland Tax Relief Legislation Passed | SC&H Group (schgroup.com)
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It only appears to be a nonrefundable MD tax credit of up to $1000 (or $1750 if MFJ and both spouses are 65 or older). So if you normally have a MD tax liability more than $1000:$1750, you'll still owe them something. AND, many will still have to prepare and file MD tax forms, even if the $1000:$1750 credit reduces their taxes to zero. (Tax liability means the taxes calculated that you owe to MD.... BEFORE considering any withholding or estimated tax payments that were already paid in)
As far as your MD withholding on your pension(s) are concerned....depends on whether you normally have to pay extra to MD at tax time or not. Certainly, if you always get a MD refund, you could have your MD withholding reduced some (assuming your 2022 income is expected to be exactly the same as 2021)
____________*Answers are correct to the best of my knowledge when posted, but should not be considered to be legal or official tax advice.*
