Maryland tax credits for owners, renters
As the COVID-19 pandemic continues, thinking about the impacts on your household can be overwhelming. But now is an ideal time to learn about the resources available to you and your family.
The Maryland Consumer Rights Coalition (MCRC) is ramping up its “Take the Credit” campaign, which reminds Maryland homeowners and renters about two sometimes forgotten tax credits.
The Maryland Property Tax Credit programs provide financial assistance to help older adults and low-income families with their property costs. Combined, these tax credits help save homeowners and renters more than $260 million in property taxes each year.
Although the programs have been around for decades, few people eligible for the renters and homeowners tax credits even know they exist.
It’s time to Take the Credit! You have until Oct. 1 to apply for the 2020 Maryland Property Homeowners’ Tax Credit and Maryland Renters’ Tax Credit. (And you must apply every year for the credits.)
Income-based homeowner relief
The Homeowners’ Property Tax Credit Program provides tax relief for eligible Maryland homeowners by setting a limit on the amount of property taxes owed based on their income. Applications received and approved will be credited on your property tax bill.
If a resident has already paid their property taxes and applies before Oct. 1, any tax credit that the homeowner may be eligible for will be refunded by their county finance office. Last year, for instance, SOAR applicants received an average of $1,383 in property tax relief.
The tax credit is available to Maryland homeowners whose gross household income doesn’t exceed $60,000. In addition, your net worth must be less than $200,000 not including the value of your home; your name must be on the home’s deed; and you must reside in the home.
To confirm eligibility for the homeowners’ property tax credit, homeowners can visit marylandtaxcredit.com.
MCRC’s Securing Older Adult Resources (SOAR) program provides the following services:
—Free comprehensive benefit checkups and case management
—Financial counseling and coaching to build and protect individual assets, as well as to connect with, and maximize the efficacy of, existing services
—Screening and application assistance for the Renters’ Tax Credit (RTC) and Homeowners’ Property Tax Credit (HOTC).
To speak with a SOAR Financial Counselor to determine your eligibility, or if a paper application is preferred, call (443) 961-6220 for assistance. Be prepared to provide information about your 2019 household’s gross income and rental payments.
Income-based renter relief
The Maryland Renters’ Tax Credit Program similarly provides tax relief for eligible renters who pay high monthly rent relative to their total income.
While the majority of recipients of this credit are Marylanders 60 or older, the program is also available to renters who are disabled, as well as renters under age 60 with at least one dependent child under 18 years old, others who meet low-income requirements, and the surviving spouse of a renter who met the eligibility requirements.
The renters’ tax credit is issued in the form of a direct check payment of up to $1,000 a year from the state of Maryland. SOAR applicants who rent in Maryland received an average of $630 in property tax relief in 2019.
To confirm eligibility for the renters’ tax credit or download an application, Maryland renters can visit marylandtaxcredit.com.
For D.C. residents
Washington, D.C. offers a senior assessment cap tax credit to counteract the surge in property values. Under this credit, the property cannot be taxed by more than a 5% increase in the original assessed value of your home.
To be applied automatically, the homeowner must also be receiving a homestead deduction (a decrease in the yearly tax liability due to its status as the principle residence) and Senior Real Property Tax Relief.
There is also a lower income, long-term homeowner tax credit available. You must have lived in the property for at least seven years, be receiving the homestead deduction, and not exceed the household income limit, which depends on the number of household members.
Renters can also receive a tax credit by up to $1,000 if your gross income was $40,000 or less, or less than $60,000 for ages 70 and older.
Call (202) 727-4829 or visit otr.cfo.dc.gov and click on the “Real Property Tax Service Center” for more information about property tax relief.
For Virginia residents
Virginia also has tax credits for certain homeowners. If your home requires accessibility features, including ramps for wheelchairs, you could receive $5,000 for retrofitting an existing residence or purchasing a new accessible residence. The credit cannot be greater than your tax liability.
If you and your family live below the poverty line, you can receive a tax credit of up to $300 per person. You cannot, however, receive this credit if you already have applied for an age-based tax deduction.
There is no tax credit for renters in Virginia.
For more information, visit tax.virginia.gov.
Ivey Noojin contributed the D.C. and Virginia sections of this story.
Francine Hyman is program manager of Maryland Consumer Rights Coalition’s SOAR Program.