Maryland Homestead, Homeowners', and Renters' Tax Credit Information
It’s tax season and there are several resources that Takoma Park residents may find beneficial when filing their taxes: The Maryland Homestead Tax Credit, Homeowners’ Property Tax Credit, and Renters’ Tax Credit.
The Maryland Homestead Tax Credit was designed to help homeowners deal with large assessment increases on their principal residence. The Homestead Credit limits the increase in taxable assessments each year to a fixed percentage. Every county and municipality in Maryland is required to limit taxable assessment increases to 10% or less each year. Click here to view a listing of homestead caps.
The State of Maryland has developed a Homeowners’ Property Tax Credit Program which allows credits against the homeowner’s property tax bill if the property taxes exceed a fixed percentage of the person’s gross income. In other words, it sets a limit on the amount of property taxes any homeowner must pay based upon his or her income.
The Renters’ Tax Credit Program provides property tax credits for renters who meet certain requirements. The plan was modeled after and designed to be similar in principle to the Homeowners’ Tax Credit Program, which is known to many as the Circuit Breaker Program. The concept rests on the reasoning that renters indirectly pay property taxes as part of their rent and thus should have some protection, as do homeowners.
The plan is based upon the relationship between rent and income. If the portion of rent attributable to the assumed property taxes exceeds a fixed amount in relation to income, the renter can, under specified conditions, receive a credit of as much as $1,000. The credit is paid as a direct check from the State of Maryland.
Montgomery County also offers specialized tax credits for individuals over 65 and military retirees. To learn more about this credit please visit their website.
For questions and to learn more about Maryland tax credits, please visit the Maryland Department of Assessments and Taxation.
