Marylanders hoping to pay part of their student loan with a tax credit need to hurry up as the deadline is approaching fast. The deadline to apply for the student loan debt relief tax credit is September 15. About $18 million in tax credits are available to student loan borrowers filing their 2023 tax returns.
Student Loan Debt Relief Tax Credit: Who Will Get It?
The application process for the student loan debt relief tax credit opened on July 1, while the last date to apply for this credit is September 15.
To qualify for credit, applicants must have incurred a minimum of $20,000 in undergraduate or graduate student loan debt. Also, applicants must have at least $5,000 in outstanding student loan debt at the time of applying for the credit.
Apart from this, an applicant must claim Maryland residency for the 2023 tax year and file 2023 state income taxes to qualify for the credit.
If you meet these requirements, you can apply for the credit at the Maryland Higher Education Commission’s website. The application is free, and it takes about 10-30 minutes to complete the process. It must be noted that applicants need to provide their permanent email addresses in the application.
When applying for the credit make sure the application contains no errors or omissions. The Maryland Higher Education Commission (MHEC) notes that the “applications containing errors or omissions will be rejected and may or may not come up for review again in the examination process.”
Along with the application, applicants need to provide documentation from lenders showing that their education loan qualifies for the tax credit. The document must include lender’s name, address, contact number, current loan balance and details of the borrower.
It must be noted that the current college loan relief laws will not impact the Student Loan Debt Relief Tax Credit program.
What do applicants need to know?
It is mandatory for the recipient of the Student Loan Debt Relief Tax Credit to use the credit toward their college loan debt. Also, recipients need to provide proof of the same to the Maryland Higher Education Commission within three years from the end of the year in which the credit is applied.
If a recipient fails to provide payment proof, they will have to return the credit amount to the state through a process called “recapture.”
Applicants must not file more than one application as duplicate applications will be rejected. MHEC says that filing more than one application per year “puts all of your applications at risk of being eliminated.” If you file more than one application, only your first application will be reviewed.