Anyone meeting the requirements receives the credit. To calculate the amount of the credit, the state uses a formula based on the amount that the property tax exceeds a percentage of the homeowner's income.
For instance, the tax limit is $420 for a property owner whose combined household income is $16,000. If the actual tax bill was $990, the owner would get a credit of $570.
Last year roughly 51,000 homeowners received an average credit of $1,213.
The state reimburses counties and Baltimore city for the property taxes they do not receive because of the program. Last year, the state reimbursements totaled $62 million.
Homeowners must apply for the credit annually; the state mails applications to anyone who received the credit the previous year.
Renters' tax credit
Although Maryland has lower property taxes compared with many other states, Davis said the program is vital for many older people who want to maintain their lifestyle even though their incomes may have dropped when they retired.
"They would not be in their own homes if it was not for the circuit breaker," he said.
The state also offers assistance to low-income renters who meet certain requirements. Renters can receive a check of up to $750, based on the ratio between rent and income. Last year, nearly 8,200 renters, most of whom were 60 or older, received an average of $300.
David Baumann is a writer living in Annapolis, Md.
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