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The state may owe you money: Bill refunding homeowners shortchanged on property tax credits approved by General Assembly

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Posted at 6:00 AM, May 04, 2021

BALTIMORE — Homeowners could receive hundreds of dollars in refunds from the state.

Legislation requiring Maryland to reimburse taxpayers shortchanged on property tax credits is a step closer to becoming law.

The bill (HB158) received unanimous support in the General Assembly and is awaiting the governor’s signature.

The refunds stem from a miscalculation outlined in an October 2020 audit report.

Auditors found the State Department of Assessments and Taxation had incorrectly subtracted other tax credits before calculating the Homeowners Property Tax Credit (HTC).

The HTC helps homeowners by setting a limit on the amount of property taxes someone must pay based on their income.

RELATED: MD lawmakers considering bill refunding homeowners shortchanged on tax credits

However, not everyone has been receiving the full credit.

According to auditors, the miscalculation reduced credits by $4.4 million in fiscal year 2019. The error dates back to at least 2005.

RELATED: Audit shows Maryland homeowners were overtaxed millions of dollars

In a legislative hearing in December, SDAT Director Michael Higgs disagreed with auditor’s findings.

“What SDAT was doing, as far as we were concerned, was not in violation of state law but that it was disparate treatment that was unintentional and needed to be resolved with new policies,” said Higgs.

Following the report, the state changed its policies but didn’t agreed to refunds. Legislation is now forcing their hand. If the bill becomes law, SDAT will be required to identify any homeowners who were shortchanged in the last four years.

“The refunds are going to be available as soon as SDAT makes the calculations and sends them back,” said Delegate Al Carr (D-Montgomery County).

The law is set to take effect June 1, 2021, however, refunds could come much later.

“We want them to do the calculations correctly and I understand that does take time. As long as they’re being thorough and making sure everyone who’s owed a credit gets a tax credit, it might take months or it might take to the end of the year, which is a little slower than I would like, but we really want them to do this correctly,” said Carr.

SDAT officials informed legislators they were holding an internal meeting to discuss the process for issuing refunds, but their priority is processing the 2021 HTC applications before July 1.

“With all the stress of the pandemic and people who lost income, it’s really important that people get every penny that they’re owed so I think it was particularly important this year,” Carr said.

WMAR-2 News requested an interview with SDAT. No one was available.

While the state works to identify impacted homeowners, it’s important anyone eligible for the HTC submit an application. Homeowners need to apply for the credit every year.

Applicants may qualify if:

  • Household income is $60,000 or less
  • The property is their principal residence
  • Net worth (not including the property) doesn’t exceed $200,000

Seniors over 70 can apply for the credit going back three years.

Click here to apply for the Homeowners Property Tax Credit.