Homeowners' Property Tax Credit Program and Local Option (Circuit Breaker)

State

Maryland

Year

2018

Variations in Receipt of Benefit

Benefit Varies with Income

Benefit Type

Circuit Breaker

Benefit

The credit is the amount that property tax exceeds a given percentage which is based on the applicant's preceding year income. Only property taxes on the first $300,000 of assessed value are eligible for the credit. The threshold is 0% for incomes between $0 and $8,000. The required threshold is 4% for the next $4,000 of incomes ($8,001 and $12,000), 6.5% for the next $4,000 of incomes ($12,001 and $16,000), and 9% for incomes over $16,000 The benefit is based on the previous year's income. Applications must be filed annually by 1 September in order to receive the benefit. If the benefit is filed prior to 1 May, the credit will appear as a reduction on the July property tax bill and for this reason, applicants are encouraged to apply by the 1 May. Some counties and municipalities have supplementary credit programs.

How is Benefit Disbursed

Credit to the property tax bill

Eligible Property Type

Residential

Characteristics of Eligible Property

Only residential property is eligible for this program.

Eligibility Criteria

Homeowner

Income Ceiling

Wealth Limit

Description of Eligibility Criteria

An applicant's combined household income cannot exceed $60,000. Only the first $300,000 of assessed value is considered when calculating the credit. Applicants must have a maximum net worth of no more than $200,000, which excludes the residence, IRAs, and other retirement accounts. The applicant must have lived in the dwelling for at least 6 months of the year, including 1 July of the year for which the tax credit is applicable.

Local Option in Adoption of Program

Local government is unable to exercise an option

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 reimburses local governments for the amount of credit granted to the individual, or if the tax bill has already been paid, the state issues a refund to the individual.

Record ID

MD107_RR18

Footnotes

The 2019 application for the Homeowner's Property Tax Credit (based on 2018 income) will be available online and mailed to last year's recipients by March 1. According to the schedule on website, the benefits and 2018 income brackets did not change from 2017 income. The state will undertake an extensive program to identify those homeowners who are eligible for the program but have not applied. Specifically the legislation requires that on or before May 1 of each year, the Department shall provide the Comptroller information identifying owners of residential properties with an assessed value that does not exceed $300,000 who failed to claim the property tax credit during the preceding 3 years. The Comptroller shall review the information, identify the individuals who are eligible but failed to claim the credit, and provide the Department with the contact information of the individuals. For the purpose of income verification, the Comptroller shall cooperate with the Department, and assist the Department with the post-audit of each application. The Department shall contact each individual who may be eligible for the property tax credit. In addition to the State of Maryland’s Homeowners’ Tax Credit, county supplemental tax credits are available to eligible homeowners in Baltimore City, Anne Arundel, Baltimore, Calvert, Caroline, Carroll, Charles, Frederick, Garrett, Harford, Howard, Kent, Montgomery, and Washington counties, and the cities of, Gaithersburg, Rockville, Bowie, College Park, Greenbelt, and Hyattsville. The state does not fund the locally adopted credits. The credit applies to state, county and municipal property taxes, but not any water and sewer charges or fees that may appear on the tax bill. In addition, a number of counties and localities offer supplementary tax credits. Income is defined as combined gross income before any deductions are taken. Income from all sources must be reported whether or not the monies received are included as income for federal and state income tax purposes. Nontaxable retirement benefits such as Social Security and Railroad Retirement must be reported as income for the tax credit program.

Sources

Md. Code, Tax-Property § 9-104 ~ 9-105;
Md. Code, Tax Property §9-215 ~ 9-215.1 (in effect for 2018)
Maryland Department of Assessments and Taxation, 2019 Homeowners’ Property Tax Credit Application (based on 2018 income) [https://dat.maryland.gov/SDAT%20Forms/HTC-1.pdf Accessed on 04/03/2019]
View Archived Source

Maryland Department of Assessments and Taxation, 2018 Homeowners’ Property Tax Credit Application (based on 2017 income) [http://dat.maryland.gov/SDAT%20Forms/HTC-60.pdf Accessed on 10/30/2018]
View Archived Source
Maryland Department of Assessments and Taxation: Homeowners' Property Tax Credit Program Website (2019) [https://dat.maryland.gov/realproperty/Pages/Homeowners%27-Property-Tax-Credit-Program.aspx Accessed 02/11/2019 ] View Archived Source

Maryland Department of Assessments and Taxation: Homeowners' Property Tax Credit Program Website (2018) [https://dat.maryland.gov/realproperty/Pages/Homeowners'-Property-Tax-Credit-Program.aspx accessed 10/30/2018] View Archived Source
2017 Md. Laws ch. 62 (SB 494)

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