Financial Affairs

Maine tax credit program saves graduates money because they pay off student loans

The Educational Opportunities Tax Credit is an incentive program designed to encourage graduates to live and work in Maine.

MAINE, United States – The Mainers have about a month left to file their taxes this year, as the coronavirus pandemic has delayed Tax Day until July 15. As the deadline approaches, there is a program for some people who live, work and pay taxes in our state. should be aware, especially if they are still paying off their student loans.

The Education Opportunity Tax Credit is a unique incentive program designed to encourage people who have graduated to live and work here in Maine. Most people know they can deduct student loan interest when they pay their taxes, but this tax credit program essentially reimburses Mainers for payments they have made on their student loans.

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This credit (also known as the Opportunity Maine tax credit) is available to people who have received:

  • an associate or bachelor’s degree after 2007 from an accredited college, college, or university in Maine
  • an associate’s degree or bachelor’s degree after 2015 from an unaccredited community college, college, or university in Maine
  • a post-2015 graduate degree from an accredited college or university in Maine

For 2019 graduates, up to $ 77 / month is available for an associate degree; up to $ 367 / month is available for a bachelor’s degree; and up to $ 338 / month is available for a graduate degree. This means that a bachelor’s degree holder in 2019 could get a maximum credit of $ 4,404.

The credit can be used dollar for dollar against tax payable, usually resulting in a larger tax refund. Credit that you cannot use can be held and carried forward for up to 10 years. For STEM majors, this extra credit is actually refundable, meaning you pay the tax owed and get the rest back.

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Right now, there is no time or income limit – so even if you have a high income and don’t get a student loan deduction, you can still claim this credit. If you weren’t aware of the credit in years past and want to apply for it, Anne Powelson, senior tax advisor at H&R Block in Bangor, says you can amend tax returns until 2016.

Powelson recommends that anyone who can claim this credit give it a try.

“Some people think it’s too much work to get it, and it really isn’t,” Powelson said. “It can be difficult that first year to put all the information together, but it’s a great payback to have – and once you have the information in the first year, it’s usually easier the following years. that you I always pay, so that’s great. “

To apply, you must send a transcript (official or not) and show what student loans you have, when they were dispersed, what payments you need to make, and proof that you are paying. Credit is not available for some technical fields, but residents of Maine in the military or working on ships can still apply.

The following resources contain additional useful information:

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