![]() ![]() Each spouse on a joint return who is the sole account holder of a first-time homebuyer savings account may claim up to the full amount of the subtraction. §§101-1330, does not subject the account holder to the tax and penalty associated with use of funds for purposes other than eligible costs.Ī use of the account funds to pay a financial institution’s administrative costs is not considered a withdrawal from the account subject to tax and penalty if the administrative costs are disclosed by the financial institution, in writing, to the account holder at the time the account is opened and do not inure to the benefit of the account holder.Īn account holder claiming a subtraction must file a list of transactions for the account during the taxable year with the income tax return on which the subtraction is claimed, and each subsequent year, whether or not the subtraction is claimed in each subsequent year, until the funds are used for eligible costs. (For information on how to report this addition and penalty, refer to Instructions 12 and 22 in the Maryland Resident tax booklet.) There are three exceptions to this: rollover, bankruptcy, and administrative costs charged by the financial institution.Īn account holder who withdraws money from the account and, within 60 days, deposits the money in a new first-time homebuyer savings account held by a different financial institution or the same financial institution is not subject to the tax and penalty.Ī disbursement of any assets of a first-time homebuyer savings account under a filing by an account holder for protection under the United States Bankruptcy Code, 11 U.S.C. If the account holder withdraws any funds from the account for which a subtraction has been claimed for a purpose other than eligible costs for the purchase of a home, the funds are considered taxable ordinary income for the tax year in which they were withdrawn and the account holder must pay a penalty equal to 10% of the amount withdrawn. ![]() An account holder may not be the account holder of more than one account. Eligible costs are the down payment and allowable closing costs for the purchase of a home in the State by an account holder.Īny account established with a financial institution can qualify as a "first-time homebuyer savings account" so long as the account is established for the sole purpose of paying or reimbursing eligible costs for the purchase of a home by the account holder in the state of Maryland. Any funds in the account for which a subtraction was claimed and not expended on eligible costs by December 31 of the last year following the 15-year period is subject to taxation as ordinary income. Funds must be used within 15 years following the date the account was established. ![]() The First-Time Homebuyer Savings Account Subtraction may be claimed on Form 502SU by a Maryland resident who has not owned or purchased, either individually or jointly, a home in the State in the last 7 years and who has contributed money to a first-time homebuyer savings account.įor a period not to exceed 10 years, an account holder may claim a subtraction for up to $5,000 of the amount contributed by the account holder to their account during the taxable year for which the subtraction is claimed plus earnings for the taxable year, up to $50,000 of earnings accrued over the 10-year period. The IRS has the EITC Assistant in English and a Versión en Español. The Assistant is available in English or en Español. To determine if you are eligible for the state Earned Income Tax Credit. Determine if your child or children meet the tests for a qualifying child and.By answering questions and providing basic income information, taxpayers can use the IRS EITC Assistant to: If you are not certain if you qualify, both the Comptroller of Maryland and the Internal Revenue Service have electronic assistants that can help. The Maryland earned income tax credit (EITC) will either reduce or eliminate the amount of the state and local income tax that you owe.ĭetailed EITC guidance for Tax Year 2022, including annual income thresholds can be found here. If you qualify for the federal earned income tax credit and claim it on your federal return, you may be entitled to a Maryland earned income tax credit on the state return equal to 50% of the federal tax credit. The Earned Income Tax Credit, also known as Earned Income Credit (EIC), is a benefit for working people with low to moderate income. ![]()
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