Last week, an elderly person asked me in the church fellowship hall. They mentioned that they had filed their taxes themselves last year and just heard about the credit available for those over 65.

It turns out that many people are unaware of this program. So today, I will carefully explain the Maryland Senior Tax Credit.

This credit was established by the state legislature in 2022. It directly reduces a certain amount from Maryland state income tax.

Deductions and credits are different. A deduction reduces taxable income, while a credit reduces the tax amount after calculations are complete. Even with the same $1,000, the impact of a credit is much greater.

The first requirement is age. You must be at least 65 years old as of the last day of the tax year, which is December 31.

The second requirement is residency. You must be a Maryland resident, and part-year residents who moved in during the year are also eligible.

The third requirement is an income limit. If you are single or filing separately as a married couple, your federal adjusted gross income (AGI) must be $100,000 or less.

For married couples filing jointly, heads of household, and qualifying surviving spouses, the limit is $150,000 or less.

Now, regarding the amounts. If you meet the conditions as a single filer, you will receive $1,000.

If both spouses are over 65 and filing jointly, the amount is $1,750. The same applies to heads of household and qualifying surviving spouses.

However, if only one spouse is over 65, the amount decreases to $1,000. Remember that the maximum of $1,750 applies only when both meet the age requirement.

There is a common pitfall that many overlook. This credit is nonrefundable, meaning it cannot be refunded.

For example, if you qualify for $1,000 but your state income tax is $600, the credit will only reduce your tax to $0, and you will not receive the remaining $400 back. It only reduces your tax liability.

Therefore, those whose income primarily comes from Social Security may feel a smaller impact. Maryland does not tax Social Security benefits, so there may be less tax to reduce in the first place.

There was also a bill to change this. In the 2026 session, HB 745 was introduced to make this credit refundable, and the state legislature's financial analysis estimated a revenue decrease of $191.4 million in the first year.

However, I could not find any records indicating that it passed after the committee hearing. So for now, it is best to plan as if it is nonrefundable.

There is one more condition to be aware of. If the state general fund revenue estimate released in September is more than 3.75% lower than the estimate from March of the same year, some taxpayers' credits will be cut by 50%.

This applies to singles with an AGI over $50,000 and married couples filing jointly with an AGI over $100,000. It is a mechanism to reduce benefits when state finances worsen.

Honestly, this part was a bit disheartening. Last year, the state legislature raised tax rates for high-income brackets, and now they are targeting senior benefits when financial conditions deteriorate.

The application process is relatively simple. When filing the Maryland state tax return Form 502, you need to fill out Part M of Form 502CR.

The calculated credit will then transfer to Form 502 and reduce your tax. There is no separate application; it is just a matter of whether you fill out this section when reporting.

If you are doing it yourself with software, make sure your date of birth is entered correctly. If the age information is incorrect, Part M may not even appear.

If you missed this last year, consider filing an amended return. Maryland allows corrections with Form 502X, so check the deadline for that tax year.

Additionally, there are other senior benefits from the state government. Items like pension exclusion for retirement income should also be reviewed.

My conclusion is this: if you qualify but do not apply, it is simply a loss.

I prefer that the government collects less money to begin with rather than taking more and redistributing it. I see this credit as one of the few welcome programs in that direction.

However, the results can vary significantly depending on income composition and filing status. Since it differs by individual circumstances, be sure to confirm with a tax professional or the Comptroller's office.

If you know someone over 65, please show them this article. $1,750 can cover several grocery trips in a year.