As Mainers begin preparing to file their state income tax returns, many may not realize that they qualify for thousands in tax credit savings.
Signed into law in 2007, the Educational Opportunity Tax Credit (EOTC) can provide significant tax benefits to Maine residents who have earned a college degree in Maine and continue to live and work in the state.
“The potential savings are substantial,” said Rob Brown, executive director of Opportunity Maine, the grassroots organization that spearheaded efforts to create the tax credit. “The EOTC can provide individuals who earned an associate’s degree from a Maine college or university nearly $800 in yearly state income tax credits and over $4,000 for a bachelor’s degree. Savings of that magnitude can remove a major financial barrier for those who thought going to college was out of their reach.”
The program provides an incentive for individuals to not only complete their degrees, but also to stay, work and live in Maine.
“While many residents qualify for this valuable tax relief, many are not aware of the program and have not applied,” state Sen. Justin Alfond, treasurer and founding member of Opportunity Maine, said in a press release. “We want to change that. This generous initiative is unique in that it funnels the benefits of the program, increased investments in higher education, directly to Maine workers. And those savings can assist Maine residents in better preparing themselves for jobs of the future.”
The program also includes a business level component as well, allowing companies that pay their employee’s student loans as an employee benefit to claim credit for those payments on their business taxes. This provides an attractive employee and business benefit, which may spur more organizations to support their employees in pursuing higher education.
To help increase understanding and awareness of the program, Opportunity Maine recently revamped its website with updated program details, answers to frequently asked questions, and helpful resource links. The site is also equipped with an online tax credit calculator that provides an estimate of the amount of tax credit individuals may qualify for based on their year of graduation, type of degree and the amount of student loan payments made.
For more information on the Educational Opportunity Tax Credit, visit www.opportunitymaine.org, email firstname.lastname@example.org, or call 800-922-6352. Information on filing Maine state income taxes can be found at www.maine.gov/revenue.