Maryland Will Refund Millions In Property Tax Credit For Errors Dating Back Years

  • Charles County,St Mary's County,Calvert County,Prince George's County,Anne Arundel County
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ANNAPOLIS, Md. -- The Maryland General Assembly recently passed a new law requiring the State Department of Assessments and Taxation (SDAT) to identify homeowners who are owed a refund after an audit revealed there were incorrectly reduced property tax credits.

The General Assembly unanimously approved this law. Although Governor Larry Hogan[R] did not sign the bill, it still took effect without his signature on June 1.

As a result, Maryland will have to issue millions of dollars in property tax credit refunds dating back to 2017, even though these errors date back to at least 2005.

Homeowners’ Tax Credits(HTC) are tax benefits available to those who own a home. These credits allow a person to reduce their income tax rate, deduct specific home-related expenses or receive a tax credit through a tax credit program.

Maryland has developed a tax credit program that allows credits against the homeowner’s property tax bill if the property taxes exceed a certain percentage of the person’s gross income.

In this audit, SDAT had incorrectly subtracted other tax credits before calculating the Homeowners Property Tax Credit, and everyone has not received their full credit.

Homeowners who qualified for the HTC had their credit reduced because the state was deducting the Income Tax Offset Credit before calculating the homeowner’s tax liability.

Although they claimed this was part of their procedure, the state’s Assistant Attorney General, in a memo written in 1996, suggested the department not deduct those local credits.

If this situation applies to you, you should get your money back from the state before the end of the year. If SDAT can not locate the homeowner, then the funds will be transferred to the comptroller’s lost property fund and can be collected later.

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