- Homeowners Property Tax Credit
- Homestead Tax Credit
- Tax Deferral
- Emergency Worker Tax Credit
- Arts and Entertainment Credit
Homeowner's Property Tax Credit Program
The State of Maryland has developed a program which allows credits against the homeowner's property tax bill if the property taxes exceed a fixed percentage of the person's gross income. In other words, it sets a limit on the amount of property taxes any homeowner must pay based upon his or her income. The Maryland General Assembly has improved the plan through the years so that now this program is available to all homeowners regardless of their age, and the credits are given where needed, based upon the person's income.
Before your eligibility according to income can be considered, you must meet 4 basic requirements:
- You must own or have a legal interest in the property.
- The dwelling on which you are seeking the tax credit must be your principal residence where you live at least 6 months of the year, including July 1, unless you are a recent home purchaser or unless you are unable to do so because of your health or need of special care.
- Your net worth, not including the value of the property on which you are seeking the credit or any qualified retirement savings or Individual Retirement Accounts, must be less than $200,000.
- Your combined gross household income cannot exceed $60,000.
For more information and to download an application, please visit the Maryland Dept of Assessments and Taxation website.
Homestead Tax Credit Program
To help homeowners deal with large assessment increases on their principal residence, state law has established the Homestead Property Tax Credit. The Homestead Credit limits the increase in taxable assessments each year to a fixed percentage. Every county and municipality in Maryland is required to limit taxable assessment increases to 10% or less each year. View a listing of homestead caps for each local government.
Technically, the Homestead Tax Credit does not limit the market value of the property as determined by the Department of Assessments and Taxation. Instead, it is actually a credit calculated on any assessment increase exceeding 10% (or the lower cap enacted by the local governments) from 1 year to the next. The credit is calculated based on the 10% limit for purposes of the State property tax, and 10% or less (as determined by local governments) for purposes of local taxation. In other words, the homeowner pays no property tax on the market value increase which is above the limit.
The tax credit will be granted if the following conditions are met during the previous tax year:
- The property was not transferred to new ownership.
- There was no change in the zoning classification requested by the homeowner resulting in an increase value of the property.
- A substantial change did not occur in the use of the property.
- The previous assessment was not clearly erroneous.
A further condition is that the dwelling must be the owner's principal residence and the owner must have lived in it for at least 6 months of the year, including July one of the year for which the credit is applicable, unless the owner was temporarily unable to do so by reason of illness or need of special care. An owner can receive a credit only on 1 property-the principal residence.
For more information and to make sure your property is in the program, please visit the Maryland State Department of Assessments and Taxation website.
Tax Deferral Program
This is a county program that is available to people over 65 years of age who have lived in the dwelling for at least 5 years. The program defers any county tax increase for payment at a later date with interest. Please refer to the application for full details. The application is due by June 1.
Fallen or Disabled Emergency Worker Property Tax Credit Program
This is another county program that provides property tax credit to fallen or disabled emergency workers.
Fallen Emergency Worker Credit
To qualify for the fallen emergency worker credit, the surviving spouse must complete:
- Application for Dwelling Owned by Spouse of a Fallen Emergency Worker (PDF) (Law Enforcement Officer or Rescue Worker)
- Eligibility Certification for Fallen Emergency Worker (PDF)
- Certificate of Service (PDF) completed by the Chief of the Law Enforcement, Fire, Rescue or Emergency Medical Service for the jurisdiction that employed the Fallen Emergency Worker
- A copy of the Death Certificate prior to September 1 of the taxable year for which the credit is requested to begin.
Disabled Emergency Worker Credit
To qualify for the disabled emergency worker credit, the property owner must complete:
- Application for Dwelling Owned by a Disabled Emergency Worker (PDF) (Law Enforcement Officer or Rescue Worker)
- Eligibility Certification for Disabled Emergency Worker (PDF)
- Certificate of Service (PDF) completed by the Chief of the Law Enforcement, Fire, Rescue or Emergency Medical Service for the jurisdiction that employed the disabled emergency worker
- A copy of the disabled emergency worker's Retirement Statement, Notice of Retirement Allowance or Letter From the State Retirement Agency which certifies the permanently and totally disabled in the line of duty prior to September 1 of the taxable year for which the credit is requested to begin.
Arts & Entertainment Tax Credit - County
Eligible businesses and commercial entities may qualify for a county real property tax credit. For criteria and application instructions please see County Resolution 13-04 (PDF).