Governor Hogan announces $9 million in additional tax credits for student loan debt

Property Tax Credit Extention

ANNAPOLIS, Md. – Governor Larry Hogan announced on Tuesday nearly $9 million in tax credits to more than 9,000 Maryland residents with student loan debt, awarded by the Maryland Higher Education Commission.

To date, nearly $41 million in tax credits has been awarded to Maryland residents. 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 9,155 Maryland residents who were awarded the 2021 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 residents who attended an out-of-state institution. We’re told there were 5,145 applicants who 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.

Last year, MHEC awarded the Student Loan Debt Relief Tax Credit to 7,962 Maryland residents.

Officials say 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 State 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.

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Categories: Education, Local News, Maryland, Money