Outreach 101: Talking Up Low-Income Tax Credits in Maryland

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If you provide a low-income property tax credit and nobody claims it, is it really there? In a legislative hearing yesterday, Maryland lawmakers and legislative staff discussed options for expanding the state's Homeowner Property Tax Credit. This is a laudable goal: like other states' circuit breaker-style property tax credits, the PTC is designed to provide the greatest possible "bang for the buck" by targeting property tax relief to those low-income homeowners for whom tax bills are especially large. But there is one bad thing you can say about this type of tax credit: you have to apply for it. Low-income homeowners who don't know about the credit are out of luck.

As it turns out, Maryland tax administrators take some steps to promote this credit. Gas and electric bills sometimes contain reminders that "you may be eligible for a tax credit," and the income tax forms that get mailed out to every wage earner in the state contain this full-page announcement (although to find it you have to read all the way through to the very back of your income tax instructions, behind the tax tables).
This is smart. But is it smart enough? No one knows, because no one knows how many eligible low-income Marylanders fail to claim the credit.

Most states offer a similar tax credit to their low-income homeowners (and, in some states, renters). Good-government advocates across the nation seeking to improve the fairness of these low-income credits could start by asking their lawmakers and state tax administrators the same question that came up in yesterday's Maryland hearing: what are you doing to ensure that eligible people claim this credit?

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