Governor Larry Hogan has introduced the RELIEF Act of 2021, an emergency stimulus and tax relief package that will provide more than $1 billion for Maryland working families, small businesses, and those who have lost their jobs as a result of the COVID-19 pandemic.
DIRECT STIMULUS PAYMENTS FOR LOW TO MODERATE-INCOME MARYLANDERS
Taxpayers who claim the Earned Income Tax Credit will receive benefits of up to $750 for families and $450 for individuals. The initial payment will be in the amount of $500 for families and $300 for individuals, followed by an additional payment of $250 for eligible families and $150 for individuals. Similar to federal stimulus payments, no action is required by the taxpayer.
Marylanders would qualify for these payments who annually earn:
$50,954 ($56,844 married filing jointly) with three or more qualifying children
$47,440 ($53,330 married filing jointly) with two qualifying children
$41,756 ($47,646 married filing jointly) with one qualifying child
$15,820 ($21,710 married filing jointly) with no qualifying children
SUPPORT FOR UNEMPLOYED MARYLANDERS
The RELIEF Act will exempt taxpayers who received unemployment benefits due to COVID-19 from all state and local income taxes, helping people get more refunds during this tax filing season. Should we instead say that it MAY exempt taxpayers? I’m not sure if it’s clear if a resident who receives unemployment from another state would be exempted.
RELIEF FOR SMALL BUSINESSES
SALES TAX CREDITS
Small businesses are allowed sales tax credits of up to $3,000 per month for four months—for a total of up to $12,000. For example, if you are a business with $100,000 in monthly revenue and you collect $6,000 in sales taxes, you only remit $3,000. If you have $50,000 in monthly revenue and you collect $3,000 in sales taxes, you keep all $3,000.
UNEMPLOYMENT TAX RELIEF
An employer’s 2021 tax rate will be calculated based on their non-pandemic experience by excluding the 2020 fiscal year, and instead by using the last three fiscal years of 2017, 2018, and 2019. A change in law is necessary to enable this policy to remain in place beyond the state of emergency.
COVID-19 LOAN AND GRANT FORGIVENESS
The RELIEF Act’s loan and grant forgiveness plan would safeguard Maryland business owners against any tax increase triggered by the use of state loan or grant funds. This relief would come at a net zero cost to the state while saving businesses an estimated $40 million.
