The Student Loan Debt Relief Tax Credit Program for Tax Year 2021 is CLOSED
STUDENT LOAN DEBT RELIEF TAX CREDIT
Who
may apply: Maryland
taxpayers who maintain Maryland residency for the 2021 tax year.
How
to apply: Complete
the Student Loan Debt Relief Tax Credit application.
When
to apply: From
July 1, 2021 through September 15, 2021.
Eligible
applicants: 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 at
the time of applying for the tax credit.
How does MHEC decide who receives
the Tax Credit?
The
Commission shall prioritize tax credit recipients and dollar amounts based on
qualified taxpayers who:
·
did
not receive a tax credit in a prior year;
·
were
eligible for in-state tuition;
·
graduated
from an institution of higher education located in Maryland; or
·
have
higher debt burden to income ratios.
The criteria
for selecting who receives the tax credit each year are set out in Section
10-740(D) of the Tax General Article of the Annotated Code of Maryland and in 13B.08.17.05
of the Code of Maryland Regulations (COMAR).
Don’t
get disqualified due to incorrect lender documents. See examples of lender document “Do’s
and Don’ts”
Frequently Asked Questions for Tax Year 2021
Proof of Payment to Lender:
Recipients
of the Student Loan Debt Relief Tax Credit must, within two years from the
close of the taxable year for which the credit applies, pay the amount awarded
toward their college loan debt and provide proof of payment to MHEC. Failure
to do so will result in recapture of the tax credit back to the State.
Payments
to lenders may consist of principal and interest and may be paid in a lump sum
or installments.
Please note: The college loan relief laws in effect have no impact on the Student Loan Debt Relief Tax Credit program. Regardless of whether individuals are provided with loan relief, the Student Loan Debt Relief Tax Credit program still requires that, if taxpayers claim the credit on their tax returns, they must pay the tax credit award amount toward their loan balances within 2 years. Any loan deferment, forbearance, or forgiveness programs will not change this nor have any effect on the terms.
For 2019, 2020, and 2021 tax credit awards, log onto your OneStop account and attach your
Proof of Payment information and documents there.
For tax credit awards that precede
tax year 2019, email your Proof of Payment to:
studentdebttaxcredit.mhec@maryland.gov or mail to:
Maryland Higher Education
Commission
Student Loan Debt Relief Tax
Credit
6 N. Liberty Street, 10th floor
Baltimore, MD 21201
Having problems with your student loan servicer?
If you have a
complaint about your student loan servicer and need information on what steps
you can take to resolve your concerns, you can contact the Maryland Student
Loan Ombudsman at https://www.dllr.state.md.us/finance/consumers/frslombud.shtml
Student loan servicer
problems with which the Ombudsman can assist include: failure by the servicer
to communicate with a borrower, errors in crediting principal and interest
payments, misapplied payments, inaccurate interest rate calculations, billing
errors, loan consolidations or modifications errors, and/or inappropriate collection
activity or tactics.
