State Renters' Tax Credit with Local Option (Circuit Breaker)

State

Maryland

Year

2021

Variations in Receipt of Benefit

Benefit Varies with Income

Minimum Tax Amount Must be Paid

Benefit Type

Circuit Breaker

Benefit

The program provides a relief equal to the amount of assumed property taxes that exceed a percentage of income. The plan assumes that 15% of your occupancy rent goes toward the payment of property taxes. The property tax relief a renter may receive is based upon a comparison of the assumed real property tax in the yearly rent minus a percentage of the household income 0% of the first $4,000 of income 2.5% of the next $4,000 of income 5.5% of all income in excess of $8,000 Total relief cannot exceed $1,000 and renters have until October 1 annually to apply for the credit.

How is Benefit Disbursed

Direct payment to taxpayer

Eligible Property Type

Residential

Characteristics of Eligible Property

Only residential property is eligible for this program.

Eligibility Criteria

Age

Disability

Income Ceiling

Renter

Wealth Limit

Description of Eligibility Criteria

For individuals over 60, or 100% disabled, the renters tax credit at its lowest threshold is offered for individuals making between $1 - $10,000 annually in total gross income and paying in excess of $117 monthly for rent. The highest threshold for this benefit is for individuals with incomes between $69,000 - $73,000 in 2020 total gross income for rent paid in excess of $2,000 monthly. Also eligible is an individual under the age of 60 with gross income below the federal poverty threshold and have one or more dependent children living with the renter. The property must be a principal residence and the applicant must not receive federal or state rent subsidies. The income ceiling for an applicant and one dependent is $17,308 and up to $51,393 for a household of 9 people including the applicant. An applicant's combined net worth cannot exceed $200,000. Credits are calculated according to total income, meaning all combined gross household income before deductions. This includes income from all sources, whether or not they are taxable for federal and state income tax purposes. It also includes Social Security as well as all other retirement benefits.

Local Option in Adoption of Program

Local government must take action to opt in

Local Option Regarding Program Features

Local option regarding program features

State Funding for Local Tax Loss

State reimburses all of the local government tax loss

Description of State Funding for Tax Loss

The state issues a refund check directly to the applicant.

Record ID

MD103_RR21

Footnotes

Effective 1 July 2020 Frederick County was included in the counties that were able to provide an additional local grant for elderly or disabled renters. This was enacted under HB 353, chapter 178. The credits are calculated based on the household combined income, which is defined as combined gross household income before deductions. This includes income from all sources, whether or not taxable for federal and state income tax purposes. It also includes Social Security as well as all other retirement benefits of the tax year.

Sources

Md. Code Tax-Property § 9-102;
Md. Code Tax-Property §9-402 (in effect for 2021)
Maryland Department of Assessments and Taxation Renters' Tax Credit Form RTC-1 (2021)
[https://dat.maryland.gov/realproperty/Documents/2021-RTC-Application.pdf Accessed 09/13/2022]
View Archived Source

2020 Md. Laws ch.179

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