ANNAPOLIS, Md. — Gov. Larry Hogan on Tuesday announced nearly $9 million in tax credits to more than 9,000 Maryland residents with student loan debt, granted by the Maryland Commission on Higher Education.
To date, nearly $41 million in tax credits have been provided to residents of Maryland. Maryland taxpayers who have at least $20,000 in undergraduate and/or graduate student debt and who have at least $5,000 in outstanding student loan debt can claim the student loan debt.
There were 9,155 Maryland residents who received the 2021 Student Loan Debt Relief Tax Credit. The tax credits were divided into two eligibility groups, including Maryland residents who attended a Maryland institution and residents who attended an out-of-state institution. We’re told 5,145 applicants attended in-state institutions and will each receive $1,067 in tax credits, while 4,010 eligible applicants attended out-of-state institutions and will each receive $875 in tax credits. ‘tax.
Last year, MHEC provided the Student Debt Relief Tax Credit to 7,962 Maryland residents.
Officials say the tax credit is claimed on the recipient’s Maryland tax return when they file their Maryland taxes. If the credit is greater than the taxes owed, they will receive a tax refund for the difference. For example, if $800 of taxes are owed without the credit and a student loan debt relief tax credit of $1,000 is applied, the taxpayer will receive a refund of $200.
Under Maryland state law, the recipient must submit proof of payment to MHEC, showing that the tax credit was used for the purpose of repaying eligible student loan debt.
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