The Earned Income Credit, or EIC, is a credit that is income based and is initiated by filing Maryland income taxes by April 15th of every year. There is a regular State EIC and a Refundable EIC component.
Who qualifies for the Maryland Earned Income Tax Credit?
If the taxpayer qualifies for the Refundable EIC from the State of Maryland then they will receive an additional payment from Montgomery County. Recipients will get an additional 95% of the State Refundable EIC amount from the County for the tax year 2014. For example, if the State refunds $100 the County will add an additional $95. Both refund checks are mailed separately by the State of Maryland. Starting in tax year 2015, the County match will be 100%.
Maryland Form MW507
Legally married same-sex couples must file as married filing jointly or married filing separately for tax year 2015. Employees wishing to adjust their withholding to reflect married status should complete a new Maryland Form MW507, as well as federal Form W-4.
How to Claim 2016 Maryland Earned Income Tax Credit
Maryland’s EITC is a credit for certain taxpayers who have income and have worked. The state EITC reduces the amount of Maryland tax you owe. The local EITC reduces the amount of county tax you owe. Some taxpayers may even qualify for a refundable Maryland EITC. Most taxpayers who are eligible and file for a federal EITC can receive the Maryland state and local EITC. The allowable Maryland credit is up to one-half of the federal credit.
Requirements for 2016 Maryland EITC
To be eligible for the federal and Maryland EITC, your federal adjusted gross income and your earned income must be less than the following: • $47,747 ($53,267 married filing jointly) with three or more qualifying children • $44,454 ($49,974 married filing jointly) with two qualifying children • $39,131 ($44,651 married filing jointly) with one qualifying child • $14,820 ($20,330 married filing jointly) with no qualifying children
Montgomery County Earned Income Tax Credit
Montgomery County was the first local jurisdiction in the country to establish a local Earned Income Credit Program. The County will match a taxpayer’s State Refundable EIC dollar for dollar. The County Treasurer is in charge of the program, and the Maryland Office of the Comptroller sends out checks at the end of July for those who file their tax returns before July. If you file July – September, the check will be sent out at the end of October. If you file October – December, the check will be sent out at the end of January. The checks are separate from the Maryland tax refund checks.
Special EITC in Maryland
To be eligible, you must:
- have earned income;
- be eligible for the federal EIC;
- claim the Maryland EIC and be eligible to receive it;
- have filed, as a Montgomery County Resident;
- have one or more dependents and
- file a MD tax return, even if you are not required (otherwise) to do so.
Claiming Maryland EITC in 2016
To receive the Maryland EITC, you must be eligible for the federal credit. If your income is less than the amounts shown in this notice, visit the Internal Revenue Service Web site at www.irs.gov, or contact your tax advisor, to learn if you meet the other requirements. You also may be entitled to a refundable Maryland EITC and to a local EITC. If you are a part-year resident, you may be entitled to a prorated share of the credit, if you have Maryland income. As of 2015, nonresidents are no longer eligible for the Maryland credit. For more information about the Maryland EITC, visit our Web site at www.marylandtaxes.com or call 1-800-MDTAXES (1-800-638-2937) or from Central Maryland 410-260-7980. You must have a valid Social Security Number and file a tax return to claim this credit