Tax Credits

Homestead Credit

The Homestead Credit is designed to limit the tax liability for homeowners that experience rapidly rising assessments.  Increases to County taxable assessment are limited to 8% and the credit is issued automatically to those that are eligible.  The State limits the taxable assessment increase to 10% for their portion of the tax bill.  Starting in 2008, the State will require you to apply for the credit.  Please visit the State website at www.dat.state.md.us for more information on this.
 
Homeowners' Property Tax Credit
 
The Homeowner's Tax Credit was created by the State of Maryland in 1975 to provide assistance for the elderly and was previously known as the "circuit breaker" credit.  In recent years it has become available to people of all ages based on certain income requirements.
 
Requirements to qualify:

• Eligibility based on income and net worth
• Considers gross income before deductions
• All income for all members of the household is included
• Income from all sources including Social Security, pensions, etc. is included
• Must provide copy of federal tax return, Social Security statement, etc.
• Must own or have legal interest in the property
• Dwelling must be the principal residence where you live at least 6 months of  the year, unless you are unable due to health reasons or if you are a new home purchaser
• Net worth (excluding principal residence and certain retirement savings) must be less than $200,000.
• Sliding scale based on income
• Scale sets maximum amount of property tax for that income level
• Credit is the difference between the actual tax bill and maximum tax per scale
  

Household income $10,000; tax limit $80
Household income $20,000; tax limit $780
Household income $30,000; tax limit $1680
After household income of $30,000, tax limit increases $90 per each $1000 of income
 
Other Limitations:

• Only taxes from the first $300,000 of assessed value are eligible
• Only applies to property tax of state, county and town
• Not applicable against benefit assessments or utility bills
• Only applied to the lot where dwelling is situated; not to large tracts of land.
• If property is also used for business, only the residential portion is eligible 

How to apply:

• Apply annually to State Department of Assessments and Taxation
• Must get the first application from the Assessment Office or Treasurer's Office
• Once you have been approved, you will receive an application through the mail annually thereafter
• File by May 1 of each tax year to have credit shown on tax bill
• Approved credits for applications received after May 1 will be refunded by the Treasurer's Office

Click here to download the State of Maryland 2010 Homeowners' Property Tax Credit Application

Once you apply, you will receive a response from the State whether you are approved or not. If you are not approved, you will have the opportunity to appeal.  All information is kept confidential.  Additional questions should be directed to the State Department of Assessments and Taxation (800-944-7403).  Office hours are 8 AM to 4:30 PM daily.

Other Tax Credits and/or Exemptions

Please click here for a listing and explanation of other tax credits and/or exemptions.