Student Loan Debt Relief Tax Credit for Tax Year 2021
This application and the related instructions are for Maryland residents who wish to claim the Student Loan Debt Relief Tax Credit. The Student Loan Debt Relief Tax Credit is a program, created under § 10-740 of the Tax-General Article of the Annotated Code of Maryland, to provide an income tax credit for Maryland resident taxpayers who are making eligible undergraduate and/or graduate education loan payments on loans from an accredited college or university. These may include loans obtained to earn an undergraduate and/or graduate degree, such as an associate, bachelor, masters, professional graduate, doctoral, or post-doctoral degree. Priority is given to individuals who meet the following criteria: (1) they have not received the Maryland tax credit in any prior years; and (2) they incurred their loans in order to pay in-state tuition to an institution located in Maryland. Additional prioritization criteria are set forth in § 10-740 of the Tax-General Article of the Annotated Code of Maryland, and in the implementing regulations.
When to apply: From July 1, 2021 through September 15, 2021.
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Review the steps - read carefully
Please read carefully. Applications containing errors or omissions will be rejected and will lose priority in the review process.
I. When setting up your online account, do not enter a temporary email address such as a workplace or college email. Permanent email addresses are required for issuing tax credit awards and for all future correspondence from us.
II. If you already have an existing OneStop account from a previous year, you are advised to use it again this year.
III. Entering more than one application in the same application year puts your application at risk of being eliminated. Do not abandon an application that you already started. You can save it and return to it later.
The following documents are required to be included with your Student Loan Debt Relief Tax Credit Application. Fillable/changeable documents such as Word or Excel are not acceptable. Please submit all documents in PDF format.
I. Documentation from your lenders showing the educational loans that qualify for the credit. Documentation must include: -lender’s name, address, and phone number; and
-borrower’s name, account numbers, original loan balances, and current outstanding loan balances.
The college loan debt information and documents must be in the name of the applicant, not a parent or other person. Failure to provide proper lender documents could disqualify your application. Please do not get disqualified due to incorrect lender documents. Click here to see examples of lender document “Do’s and Don’ts”.
II. A copy of your Maryland income tax return for the most recent prior tax year. Do NOT include entire TurboTax packet, entire H&R Block packet, IRS form 1040, form W-2, form 1099, form 1098-E, etc. Attaching anything other than your Maryland income tax return pages will DISQUALIFY the application.
III. Transcripts from each undergraduate and/or graduate institution that you attended. Include only those that correspond to your college loan debt documentation. Unofficial transcripts are acceptable.
Undergraduate and/or Graduate Student Loan Information
I. Total Student Loan Amount. Provide the TOTAL amount of all loans incurred for your undergraduate and/or graduate postsecondary education only, regardless of where you attended the courses or programs.
II. Eligible Undergraduate and/or Graduate Student Loan Balance. Enter the total remaining balance on all undergraduate and/or graduate student loan debt which is still due as of the submission of this application.
Maryland Adjusted Gross Income. Enter the Maryland Adjusted Gross Income reported on your Maryland State Income Tax return form 502 (line 16) for the most recent prior tax year. Do not prorate your Adjusted Gross Income amount for any reason even if married filing jointly.
I. Provide information on the colleges or universities you attended that correspond to the undergraduate and/or graduate student loan debt documents you intend to include in this application. Also provide the city and state where each college or university is located, dates of attendance, the types of degrees you received and the college or university that awarded the degree.
II. Indicate if you were charged any in-state (Maryland) tuition by your undergraduate and/or graduate colleges or universities.
Tax Credit Information
I. Previously Applied for Tax Credit. Indicate if you have applied for a Maryland Student Loan Debt Relief Tax Credit in any previous tax years.
II. Previously Received a Tax Credit Award. Even if you did not take advantage of the tax credit on your tax return, you must indicate if you have ever received a Maryland Student Loan Debt Relief Tax Credit award in the past.
III. Year of Tax Credit. Enter the tax year(s) of the tax credit(s) that was/were awarded to you.
IV. Use of Proceeds from a Prior Tax Credit. If you answered “Yes” to the question, "Did you RECEIVE a Maryland Student Loan Debt Relief Tax Credit award in ANY prior tax years?” indicate whether you have provided the Commission with the required information on the use of the proceeds of the Student Loan Debt Relief Tax Credit award.
Sign the Application
By signing the application, you are affirming under penalty of perjury that the information in the application, including attachments, is true and correct. You also are agreeing that any credit will be used solely for the repayment of eligible student loans, and that the failure to abide by this requirement, including the failure to provide to the Commission documentation showing that you have abided by this requirement, may result in the revocation and recapture of your credit. In addition, you are agreeing to the release of certain information by your educational and financial institutions. Please review the requirements and conditions carefully before signing and submitting the application.
If you receive a tax credit, then you must, within two years of the taxable year in which the credit is claimed, submit to the Maryland Higher Education Commission, documentation evidencing that you used the full amount of the tax credit for the repayment of eligible student loans. The failure to provide this documentation will result in the revocation and recapture of your credit.
If you prefer to complete a hard copy application instead of applying online, you may mail it to:
Maryland Higher Education Commission, Attn: Student Loan Debt Relief Tax Credit, 6 North Liberty Street, 10th floor, Baltimore, Maryland 21201.
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What Happens After Submission
Applicant submits application
MHEC reviews application
MHEC makes an award decision and notifies applicants via email
Applicants that have been awarded provide proof of college loan payments
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