The Earned Income Tax Credit (EITC) plays an important role in keeping working families out of poverty. Along with the federal credit, the state of Maryland offers taxpayers their own version of the credit. Modeled after the federal credit, Maryland’s EITC follows the same eligibility rules. Basically, any taxpayer in the state that was able to claim the federal credit will most likely qualify for the state EITC as well. This is great news to lower income families who are trying to stretch their dollars, especially at tax time.

While it is currently offered at 25.5% of the federal credit, by tax year 2018, Maryland’s EITC will reach 28%. Also, the credit is fully refundable, which means that any excess amount of the credit after the resident’s tax liability is accounted for, will be returned to them via a refund. A family will no income tax liability to the state will receive the full amount of the credit. This concept is at the core of the EITC’s mission to keep taxpayers above the poverty line and encourage families to continue to work.

Additionally, Maryland offers a non-refundable version of the EITC, which is set at 50% of the federal credit. Taxpayers can claim either the refundable credit or the non-refundable credit, depending on their needs, but are not able to claim both.