Poverty Level Credit

If your income is below the poverty level, you may be entitled to an income tax credit that can be applied against your state income tax and your local income tax.

Qualifications

To qualify for the credit, your earned income and federal adjusted gross income (plus any Maryland additions) must be less than the income level shown in the chart below, depending on the number of exemptions you claimed on your federal tax return.

Claiming the credit

The tax credit can be claimed on Maryland forms 503, 502, 505 or 515. If you checked filing status 6 (Dependent) on your Maryland return, you are not eligible for this credit.

To claim the credit:

• Complete your Maryland return up to the line on the form labeled "Maryland tax."
• Complete the State Poverty Level Credit Worksheet included in Instruction 18 of the tax booklet and the Local Poverty Level Credit Worksheet in Instruction 19.
• Enter the state and local credit amounts on the appropriate lines of your Maryland return.

If you are a nonresident or a part-year resident, you must prorate the credits based on the ratio of your Maryland adjusted gross income to your federal adjusted gross income.

If the credit is exceeds your tax liability, the unused credit may not be carried forward to any other tax year.