Who may apply: Maryland taxpayers who maintain Maryland residency for the 2023 tax year.
How to apply: Complete the Student Loan Debt Relief Tax Credit Application.
The application process will open again July 1, 2023 through September 15, 2023.
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 criteria for selecting who receives the tax credit 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). Maryland Higher Education Commission (MHEC) shall prioritize tax credit recipients and dollar amounts based on qualified taxpayers in the following order:
(1) For any taxable year, the total amount of credits approved by MHEC may not exceed $18,000,000. Except as provided in (4) below, MHEC shall reserve $9,000,000 of the tax credits for the following individuals in the following order of priority:
(2) State employees who graduated from institutions of higher education in the state where at least 40% of the attendees are eligible to receive federal Pell Grants; and
(3) All other State employees not described in (2), above
(4) If the total amount of tax credits applied for by individuals described in (2) above is less than $9,000,000 for a taxable year, MHEC may make available the unused amount of credits for use by other qualified taxpayers.
(5) Subject to the above, MHEC shall prioritize tax credit recipients and amounts based on whether the qualified taxpayers are graduates from institutions of higher education in the State where at least 40% of the attendees are eligible to receive federal Pell grants and in an order of priority determined by MHEC, whether the qualified taxpayers:
- Have higher debt burden to income ratios
- Graduated from an institution of higher education located in the state
- Did not receive a tax credit in a prior year
- Were eligible for in–state tuition