Maryland Student Loan Debt Relief Tax Credit

Maryland Student Loan Debt Relief Tax Credit

There is great news for Maryland residents who have outstanding undergraduate student loan debt! The state is now offering, beginning with the 2017 tax year, a tax credit to individuals who are making eligible undergraduate education loan payments on loans obtained to earn an undergraduate degree (associate or bachelor’s) from an accredited college or university. Even better, this tax credit is refundable. The maximum credit amount rewarded will be $5,000 per year, and any amount of credit awarded to you must be used to pay your student loan debt within two years.

In order to qualify for the Maryland tax credit you must:

  1. Be a Maryland resident; and
  2. Have incurred at least $20,000 (total, cumulative) of undergraduate student loan debt; and
  3. Have at least $5,000 outstanding when submitting an application.

The application required for the credit must be submitted no later than SEPTEMBER 15 each year. The application can be found on the Maryland Higher Education Commission web site (http://mhec.maryland.gov/preparing/Pages/StudentLoanDebtReliefTaxCredit.aspx). You must submit the following documentation with the application:

  1. Your complete, official transcript from each undergraduate institution that you attended.
  2. Documentation from your lender(s) that shows the educational loans that qualify for the credit (including the name, address, and phone number of the lender(s); account number(s); original balance(s); and outstanding balance(s); and the person(s) responsible for repayment of the loan(s))
  3. A copy of your Maryland income tax return for the most recent prior tax year

The completed application and supplementary information must be mailed to:

Maryland Higher Education Commission

Attn: Student Loan Debt Relief Tax Credit

6 North Liberty Street

Baltimore, MD 21201

The Maryland Higher Education Commission will certify, by December 15, the amount of any tax credit (up to $5,000) to individuals who applied for it. This certification must then be attached to your Maryland income tax return in order to take the credit.

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The Cultural Alliance of Greater Washington has worked with Bormel, Grice & Huyett, P.A., since 1988. Their knowledge of the arts and the arts community make their services invaluable. They can translate accounting terminology into a comprehensive language. For many organizations, the accounting firm of Bormel, Grice & Huyett provides the financial "information bridge." We whole-heartedly recommend Bormel, Grice & Huyett, excellent accountants who care about our arts organizations.
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