“As student loan debt continues to be exacerbated by
the COVID-19 pandemic, innovative programs like the Student Loan Debt Relief
Tax Credit offers Maryland taxpayers an additional option to help pay off their
student loan debt while remaining a valuable member of the state’s workforce,”
said Governor Hogan.
Maryland taxpayers who 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 are eligible to apply for the
Student Loan Debt Relief Tax Credit.
There were 7,962 applicants who were eligible for the
Student Loan Debt Relief Tax Credit. The tax credits were divided into two
groups of eligibility, including Maryland residents who attended a Maryland
institution and Maryland residents who attended an out-of-state institution.
There were 4,995 eligible applicants who attended Maryland institutions and
will each receive $1,210 in tax credits, while 2,967 eligible applicants
attended out-of-state institutions and will each receive $982 in tax
credits.
“Despite the challenges
of the pandemic, MHEC’s staff remains committed to engage, inform, and
support our students about the numerous programs available to them, providing
student success with less debt,” Secretary Fielder said. “This program is one
of 26 state financial aid programs administered by MHEC to help reduce student
loan debt.”
The tax credit is claimed on the recipient’s Maryland
income tax return when they file their Maryland taxes. If the credit is more
than the taxes owed, they will receive a tax refund for the difference. For
example, if $800 in taxes is owed without the credit, and a $1,000 Student Loan
Debt Relief Tax Credit is applied, the taxpayer will get a $200 refund.
Under Maryland law, the recipient must submit proof of
payment to MHEC, showing that the tax credit was used for the purpose of paying
down the qualifying student loan debt.
To learn more about the program, go
to
https://mhec.maryland.gov/preparing/Pages/StudentLoanDebtReliefTaxCredit.aspx
