Homeowner tax credit program has three basic requirements


May 18, 2003

Maryland's Homeowners' Property Tax Credit program sets a limit on the amount of property taxes a homeowner must pay based on his or her income. The tax credits are available to all homeowners who meet the income and eligibility requirements, regardless of their age.

Before eligibility according to income is considered, a homeowner must meet three basic requirements:

The homeowner must own or have a legal interest in the property.

The dwelling for which the tax credit is claimed must be the homeowner's principal residence for more than six months, including July 1 of the tax year (July 1 through June 30).

The homeowner's net worth, excluding the value of the property for which the tax credit is sought, must be less than $200,000.

The property tax credit is based on the amount by which property taxes exceed a percentage of the homeowner's income.

Applicants must disclose total income, which means the combined income from all sources, before any deductions, for the homeowner and spouse and all other occupants of the household. Exceptions are made for dependents or those who are paying rent or room and board. The intent of the tax credit program is for the homeowner to report all monies received by the applicant's household in a given year.

The state publishes a chart showing the tax limits applicable to specific amounts of household income.

For example, according to the chart, if your combined household income is $25,000, the real property tax limit is $1,290. If your actual property tax bill were $1,500, you would receive a tax credit in the amount of $210, being the difference between the actual tax bill and the tax limit. The actual property tax bill includes state, county and local taxes, but does not cover charges for water and sewer service that may be shown on a tax bill.

There's a Sept. 1 deadline to apply for a credit for taxes assessed July 1.

Forms to apply for the Homeowners' Tax Credit are available at most public libraries or by calling the Tax Credits Telephone Service at 410-767-4433 or 800-944-7403.

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