Maryland Renters’ Tax Credit

Quick Facts

• Benefit type: Direct payment from the State of Maryland that refunds part of the property tax passed through rent to low-income renters.
• Target audience: Seniors, adults with disabilities, and surviving spouses who rent their primary residence in Maryland.
• Payment amount: Awards range from $100 to $1,000 based on income and rent burden; many recipients receive between $400 and $700.
• Application deadline: October 1 each year. Apply early to receive payment before the end of the calendar year.
• How it’s paid: The state issues checks or direct deposit payments typically in late summer and fall once applications are approved.

Program Overview

The Maryland Renters’ Tax Credit (RTC) recognizes that renters shoulder property taxes indirectly through monthly rent. Established in 1981, the program provides relief by treating a portion of rent as tax and calculating a credit based on income. Unlike the Homeowners’ Property Tax Credit, which appears on a tax bill, the renters’ program issues a direct payment—essentially a cash rebate—to eligible tenants. Funds are appropriated annually by the Maryland General Assembly and administered by the Department of Assessments and Taxation (SDAT).

Eligibility focuses on age and disability status, with income limits designed to capture renters most affected by housing cost burdens. The state calculates the credit by estimating the property tax component of rent (15%) and comparing it to a percentage of the renter’s income. If the rent-derived property tax exceeds the income-based limit, the state pays the difference up to $1,000. Renters in high-cost areas like Montgomery County, Baltimore City, and Prince George’s County often receive the maximum benefit.

Eligibility Requirements

You must meet all of the following criteria:

1. Residency: You must have rented and occupied a property in Maryland for at least six months of the year. The residence must be your primary home. Rooming houses, public housing where rent is based on income, and institutions where property tax is not levied generally do not qualify.
2. Age/disability status: Applicants must be age 60 or older, disabled adults age 18 or older who are recognized as permanently disabled, or surviving spouses age 50 or older of deceased individuals who were eligible when they died.
3. Income limit: Combined gross household income must be $60,000 or less. Include income of all occupants who contribute to household expenses. Count wages, Social Security, pensions, VA benefits, unemployment, workers’ compensation, and other payments.
4. Rent threshold: You must have paid at least $100 per month in rent, and total rent must be reasonable for the market. SDAT may request leases or receipts if rent appears unusually high or low.
5. Application: File Form RTC by October 1 with documentation of rent and income.

Additional Considerations

• Roommates: Only one application per dwelling is allowed. Decide which eligible renter will file; list other household members and their income on the application.
• Subsidized housing: Tenants in Section 8 or other subsidized housing may qualify based on their share of rent, but you must show that a portion of rent goes toward property taxes. SDAT evaluates these on a case-by-case basis.
• Assisted living: Residents of assisted living or nursing facilities may qualify if the facility pays property tax and provides an itemized statement allocating rent vs. services.

Benefit Calculation

• Rent-derived tax: The state estimates that 15% of rent represents property tax. For example, if you pay $1,000 monthly rent, the property tax equivalent is $1,800 annually.
• Income threshold: Maryland expects households to spend a set percentage of income on property tax—ranging from 0% to 9% depending on income. Low-income renters have a threshold near zero, meaning nearly all property tax equivalent may be refunded.
• Maximum credit: The credit cannot exceed $1,000. If calculated credit is higher, you receive $1,000.
• Minimum credit: Credits under $1 are not issued. Most eligible renters receive at least $100.

Application Process

1. Gather documents: Collect proof of age or disability (driver’s license, birth certificate, SSA disability award letter), Social Security numbers, income documentation (W-2s, SSA-1099, pension statements), and rent receipts or canceled checks. Landlords should provide a signed lease or statement showing monthly rent.
2. Obtain the application: Download Form RTC from the SDAT website or request a mailed copy by calling 410-767-4433. Many local senior centers and libraries also stock forms.
3. Complete the form: Provide personal information, household composition, total annual rent paid, and total income. If rent changed during the year, list each amount separately with the months it applied.
4. Attach documentation: Include copies of leases, rent receipts, or a landlord letter verifying total rent. Provide income statements for all household members. If disabled, include proof of disability benefits.
5. Submit by October 1: Mail the completed application to SDAT, Renters’ Tax Credit Program, P.O. Box 49006, Baltimore, MD 21297, or submit via the state’s OneStop portal if available. Retain copies for your records.
6. Track status: Call SDAT or check the portal for updates. Processing usually takes 8–10 weeks. Payments begin mailing in late July for early applicants and continue through December.

Required Documentation Checklist

• Identification and Social Security numbers for all household members.
• Proof of age or disability status (birth certificate, SSA award letter, Medicare card).
• Annual rent summary, lease, or landlord statement.
• Receipts, canceled checks, or bank statements showing rent payments.
• Income documentation for all occupants contributing to rent: W-2s, 1099s, benefit statements.
• If applying as a surviving spouse, include the spouse’s death certificate and proof of prior eligibility.

Deadlines and Timing

• Annual deadline: October 1 is the firm cutoff. Applications received after the deadline are denied unless you demonstrate good cause, such as hospitalization.
• Payment schedule: Approved credits are paid in waves starting in late July. Those filing by May often receive payment by September. Late applicants may wait until December or January.
• Renewal: Applications are not automatic. Even if nothing changes, you must reapply annually.
• Corrections: If you discover an error, submit a revised application or a written request for correction. SDAT may adjust the payment before it is issued.

Interaction with Other Programs

• SNAP and medical assistance: The credit is a refund and does not count as income for Supplemental Nutrition Assistance Program (SNAP) or Medicaid eligibility.
• Energy assistance: Many households apply their credit to winter heating bills. State agencies do not count the payment as income but may ask about lump-sum resources for budgeting.
• Local rent relief: Some counties offer additional rent rebates or emergency rental assistance. The state credit can be combined with local aid; keep documentation for auditors.
• Federal taxes: The credit is not taxable income and does not need to be reported on federal returns.

Maximizing Your Credit

1. Apply early: Filing in spring ensures you are in the first payment batch. Late filers wait longer and risk missing the deadline.
2. Maintain rent records: Keep a rent ledger or bank statements showing monthly payments. This documentation is critical if SDAT requests verification.
3. Report income accurately: Include all household income. Underreporting triggers delays, while overreporting can reduce your credit. Review Social Security statements carefully because some benefits may be deducted for Medicare premiums—report the gross amount before deductions.
4. Coordinate with roommates: Only one eligible renter can claim the credit. Choose the person with the lowest income to maximize the award.
5. Note changes promptly: If your rent increases midyear, document the effective date and new amount. Higher rent often raises the credit, but only if properly documented.

Common Mistakes to Avoid

• Missing signatures: All applicants must sign and date the form. Unsigned applications are returned.
• Incorrect rent totals: Double-check your calculations, especially if rent varied. Sum monthly payments accurately.
• Omitting household members: SDAT requires information about everyone in the home. Failure to list occupants can be treated as misrepresentation.
• Failing to prove disability: If applying under disability status, include official documentation. A doctor’s note alone may not suffice; SSA or state disability determinations are preferred.
• Assuming ineligibility due to subsidies: Even if you receive Housing Choice Voucher assistance, apply. SDAT will evaluate your share of rent, and many subsidized tenants still receive partial credits.

Example Scenarios

• Senior couple in Prince George’s County: Alice and Robert, both 72, pay $1,400 per month in rent and have combined income of $32,000. Their property tax equivalent is $2,520. Based on their income, they qualify for a $900 credit, which arrives in September and helps cover prescription costs.
• Disabled veteran in Hagerstown: Marcus receives VA disability benefits and pays $850 monthly rent. His income is $22,000. The RTC pays $600, which he applies toward utility arrears.
• Surviving spouse in Baltimore City: Linda, age 58, lost her husband who previously filed for the credit. She continues renting the same apartment at $1,100 per month with $28,000 income. She receives an $700 payment after submitting his death certificate and proof of her income.

Frequently Asked Questions

• Can I receive both the renters’ and homeowners’ credits? No. The renters’ credit is for tenants. If you purchase a home, switch to the Homeowners’ Tax Credit.
• Do I need a landlord signature? While not required on the application, providing a signed landlord statement or lease strengthens your proof of rent. SDAT may contact the landlord for verification.
• Is direct deposit available? Yes. Include bank routing and account numbers on the application to receive funds faster.
• What if I move midyear? You can still qualify if you rented for at least six months. Report rent for each address separately.
• Will the credit affect housing vouchers? Generally no, but notify your housing authority because the payment may be considered a reimbursed expense for budgeting.

Additional Resources

• Maryland Renters’ Tax Credit information
• Application forms and instructions
• SDAT customer service
• Maryland Access Point (MAP) offices for in-person assistance
• Free tax preparation help via CASH Campaign of Maryland