Maryland’s chief tax collector said she is focused on returning tax dollars to the tens of thousands of low-income families who are failing to claim tax credits for which they are eligible.
Earlier this year, the legislature set aside $1.2 million over four years to pay for efforts to reduce the number of eligible taxpayers who do not apply for the state Child Tax Credit or for the Earned Income Tax Credit.
“As the state’s chief revenue administrator, otherwise known as the tax collector, I believe that our responsibility extends far beyond simply collecting revenue,” Comptroller Brooke Lierman said Thursday. “We must ensure that eligible families understand and can access programs like the EITC and the child tax credit.
“Our goal isn’t just to help people to get by, it’s to provide the resources they need to get ahead and help their communities prosper,” she said.
Last year, more than 444,000 taxpayers claimed $519 million in credits. But as many as 99,000 taxpayers who are eligible did not apply, officials said.
“For these families, an extra $1,100 — which is the average Maryland EITC refund last year — can be truly life-changing,” Lierman said.
The Child Tax Credit aims to help low-income families pay for the cost of raising a child by granting a $500 credit per kid to families with a federal adjusted gross income of $15,000 or less. The EITC is a sliding scale tax break, depending on filing status and number of children — a married couple with three children earning up to $66,819 could be eligible, according to a state fact sheet.
Preliminary results of a study conducted for Lierman’s office found a number of reasons why those credits go unclaimed.
Families of color, residents of rural areas, people with disabilities, the self-employed and nontraditional caretakers, such as grandparents, aunts, uncles, foster parents, single parents, make up the majority of those who fail to claim the credit, according to researchers with the Urban Institute who are doing the study.
Four counties top the list for the largest percentages of eligible taxpayers — Howard, Kent, Montgomery, and Prince George’s counties.
Baltimore City and County also had significant numbers of eligible households that failed to claim the credit, according to preliminary data.
Many taxpayers surveyed said they knew about federal tax credits, but did not know about corresponding state benefits. For others there were language barriers, concerns about immigration status or tax preparation service fraud, according to the Urban Institute’s preliminary results released Thursday.
A final report is expected at the end of the year.
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