If you, or anyone you know, lives in Maryland and has student loans, you could be eligible for a little known, but very valuable state tax credit!
What is it?
Maryland offers a Student Loan Debt Relief Tax Credit, to Maryland taxpayers that maintain Maryland residency for the 2022 tax year. The credit is claimed when filing your Maryland tax return and the money received from the credit must be used to pay student loan debt within two years.
In order to qualify for the credit, the taxpayer must have incurred at least $20,000 in undergraduate and/or graduate student loan debt, and have at least $5,000 in outstanding student loan debt at the time of applying for the tax credit. It does not matter whether you attended an in-state or out-of-state institution.
When can I apply?
Applications are open from July 1st 2022 though September 15th 2022. Online applications are strongly encouraged. Average application time takes between 10 – 30 minutes and there is no application fee. You will be notified regarding the amount of any tax credit you can claim by the state anywhere between 90 – 135 days from the date of application. Do not discard the email or the accompanying “Certificate of Approval” as you will need to include a PDF copy when submitting your tax returns for the year.
How much can I get?
The state prioritizes the amount of credit issued based on the following criteria:
- Did not receive a tax credit in a prior year
- Were eligible for in-state tuition
- Graduated from an institution of higher education located in Maryland
- Have higher debt burden to income ratios
In 2021, a total of 9,155 Maryland residents were awarded a state tax credit, with those who attended a Maryland institution receiving $1,067 and those attending out-of-state institutions receiving $875.
What are my next steps?
- Review the information above and check out the Student Loan Debt Relief Tax Credit website for more information.
- If you are eligible, we recommend you apply as soon as possible (deadline is September 15th 2022)
- Reach out to if you have questions or would like to discuss your situation in more detail with us