# COMAR Title 18 — Department of Assessments and Taxation

## Subtitle 07 — Property Tax Credits

### Chapter 02 — Renters' Tax Credit Program

**Authority:** Tax-Property Article, §§2-201, 2-202, and 9-102, Annotated Code of Maryland

**Administrative History:** Effective date: January 7, 1982 (8:26 Md. R. 2106)

**Administrative History:** Regulations .01—.03 amended effective March 11, 1996 (23:5 Md. R. 384)

#### Regulation .01 Definitions.

*COMAR 18.07.02.01*

A. In this chapter, the following terms have the meanings indicated.

B. Terms Defined.

  (1) “Affidavit” means a sworn statement in writing on a standard form furnished by the Department.

  (2) “All persons who are actual occupants of the dwelling” means household residents during the calendar year for which a credit is sought.

  (3) “Applicant” means a person filing for a property tax credit.

  (4) “Combined gross income of all persons” means the monies received in the prior year by the applicant renter, the spouse, unless separated, divorced, or widowed, or the resident co-tenant, or all of these, and the monies received by other nondependent occupants of the household unless they are paying reasonable fixed charges to the applicant renter.

  (5) “Combined net worth” means the net worth of the applicant, spouse or co-tenant, or all of these, residing in the dwelling unit.

  (6) “Dependent” means a person who satisfies the federal Internal Revenue Service standard for a dependent.

  (7) “Dwelling unit” means the principal residence of a renter and may be any type of apartment, an individual house, a duplex, a co-op or condominium, or a house trailer or trailer pad.

  (8) “Principal residence of the renter” is the one dwelling unit where the renter regularly resides and is the location designated by the renter for the legal purpose of voting, obtaining a driver's license, and filing income tax returns.

  (9) “Leasehold interest” means a tenancy in the dwelling unit held under a written lease.

  (10) “Persons 60 years old or older” means a person who reached that age as of December 31 of the year for which a credit is sought.

  (11) “Reasonable fixed charges” means the amount of room and board, rent, or expenses paid which are sufficient to defray the cost of a person residing on the premises.

  (12) “Reasonable value of utilities” means the cost of providing heat, gas, or electricity for the dwelling unit.

  (13) “Total income” means all monies received by a person in a calendar year, whether taxable for federal or State income tax purposes or not.

#### Regulation .02 Criteria Adopted.

*COMAR 18.07.02.02*

The following criteria have been adopted by the Department in the processing of applications for the Renters' Tax Credit Program:

A. Eligibility.

  (1) A Renters' Tax Credit shall be available to all persons who meet the following requirements:

    (a) The individual meets the requirements of Tax-Property Article, §9-102(a)(9), Annotated Code of Maryland, or is the surviving spouse of an individual satisfying the qualification;

    (b) The individual has a bona fide leasehold interest in the dwelling unit, which may not be owned by a public housing authority or an organization exempt from the payment of property taxes;

    (c) The individual has resided in the dwelling unit in Maryland for at least 6 months during the calendar year for which the credit is sought;

    (d) The individual, spouse or resident co-tenant, or all of these, have a combined net worth of less than $200,000, as defined in Tax-Property Article, §9-102(i)(2), Annotated Code of Maryland;

    (e) The person qualifies on the basis of the formula established in Tax-Property Article, §9-102(h), Annotated Code of Maryland, for comparing the combined gross income reported to the assumed real property taxes included in the occupancy rent, as those terms are defined in Tax-Property Article, §9-102(g), Annotated Code of Maryland, and the regulations;

    (f) The person submits a complete application furnishing all information required under Tax-Property Article, §9-102(f), Annotated Code of Maryland, and the regulations.

  (2) A person failing to meet the requirements under §A(1) of this regulation shall be notified in writing of the reason by the Department.

B. Reasonable Value of Utilities.

  (1) The amount of tax credit shall be calculated on 15 percent of the total rent paid to occupy the dwelling unit in the calendar year reduced by the reasonable value of any utilities included in the rent.

  (2) The reasonable value of utilities shall be determined according to the following criteria:

    (a) If the cost of heat and electricity or gas all have been included in the monthly rent charge, the total rent for the calendar year eligible for credit consideration shall be reduced by 18 percent.

    (b) If only the cost of heat has been included in the monthly rent charge, the total rent for the calendar year eligible for credit consideration shall be reduced by 12 percent.

    (c) If only the cost of electricity or gas has been included in the monthly rent charge, the total rent for the calendar year eligible for credit consideration shall be reduced by 6 percent.

C. Combined Gross Income of All Occupants.

  (1) An applicant shall report on the application the combined gross income of all persons who are actual occupants of the dwelling unit, if the persons are not dependents, or not paying reasonable fixed charges.

  (2) An applicant who refuses to submit the information required under §C(1) of this regulation shall be denied a property tax credit.

D. Dependent. An applicant who claims a person is a dependent, but who does not file a federal income tax return, shall submit verification of the dependency status to the Department in the form of a sworn affidavit.

E. Reasonable Fixed Charges.

  (1) A fixed charge reported by an applicant is considered reasonable if it equals one of the following amounts:

    (a) A minimum weekly standard established by the Department;

    (b) Ten percent of the nondependent occupant's gross income;

    (c) Ten percent of the applicant's combined gross income;

    (d) The aggregate of all individual expenses paid by the occupant to assist in the maintenance of the dwelling unit;

    (e) An amount the local supervisor of assessments or tax credit administrator finds sufficient in cases of extreme hardship.

  (2) An applicant who does not state initially on the application form the amount of a reasonable fixed charge received from a person shall execute a sworn affidavit.

F. Total Income.

  (1) Total income, whether taxable for federal or State income tax purposes or not, shall be reported on the tax credit application and requires:

    (a) The counting of 100 percent of capital gains and dividends;

    (b) The disallowance of capital losses in excess of capital gains;

    (c) The disallowance of depreciation as a business deductions;

    (d) The disallowance of all federal adjustments to personal income except the penalty for early withdrawal of savings.

  (2) Total income does not include lump-sum life insurance payments, research grants, and Veterans Administration educational benefits.

G. Timeliness of Application. The Department shall consider an application as timely under Tax-Property Article, §9-102(f), Annotated Code of Maryland, if the application is received or postmarked on or before the applicable date.

#### Regulation .03 Application Procedures Established.

*COMAR 18.07.02.03*

A. The Department of Assessments and Taxation has established specific procedures for applicants to complete the Renters' Tax Credit application.

B. Application Procedures Listed.

  (1) An applicant shall submit with the application form copies of his federal income tax return and accompanying schedules and forms.

  (2) An applicant may be requested to complete an affidavit to substantiate any information reported on the application.

  (3) An applicant seeking to exclude the income of a spouse on the basis of a marital separation shall complete an affidavit setting forth the date separation occurred and stating the unlikelihood of the spouse returning to the dwelling unit.

  (4) An applicant may be required to submit proof of the leasehold interest.

  (5) An applicant who refuses to submit any information required under Tax-Property Article, §9-102, Annotated Code of Maryland, and the regulations, shall be denied a tax credit for failure to substantiate the application.

  (6) An applicant who provides false or misleading information to the Department may be denied a tax credit.

C. The Department may establish additional application procedures which do not appear here, if considered necessary and if not inconsistent with the promulgated regulations.